Author Topic: Australian Investing Thread  (Read 1926300 times)

Richmond 2020

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Re: Australian Investing Thread
« Reply #5000 on: July 14, 2020, 08:15:05 PM »
I also have a defined benefit PSS account and can confirm that we treat this kind of like cash. It essentially means all other investments are held in equities (VAS and VGS) Or property with limited cash reserves and no bonds.

When we require additional cash that canít be covered through normal fortnightly pays we either redraw off our home loan, or draw down off our investment loan which is secured against our property if it is for investment purposes.

For those interested, we took out an investment loan for $200k some time ago when we wanted to buy an investment property. We used a small amount to finance the 20% deposit and stamp duty for property and then took out a seperate loan for the other 80% of the purchase price. This allowed us to get into an investment property with no money down. A high risk strategy but has worked out well for us to-date.

It also gives us flexibility to draw down further (technically a redraw) against the $200k investment loan when we need to. We have done this now on 2 subsequent occasions. Once to fund the deposit for another investment property, and more recently to pick up some additional equityís when the market was on sale.

A word of caution though with the $200k loan. If set up as interest only the monthly repayments Are super low as they are based on the outstanding loan balance. But we are now on int and principal and the monthly repayments are based on the whole $200k. This suits us and we are happy to take the lower interest rate offered for this type of loan. It could however create a bit of a cashflow Issue if you are not careful.

We are happy to except the cash flow restriction in return for the flexibility to draw down more funds for future investment opportunities without having to save up cash or go back to the bank each time.
« Last Edit: August 29, 2020, 05:23:51 PM by Richmond 2020 »

Andy R

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Re: Australian Investing Thread
« Reply #5001 on: July 14, 2020, 10:32:45 PM »
Totally agree with Richmond's idea of using pulled equity in an offset account and just having it available as a (potentially very large if possible) emergency fund. Firstly it is generally not callable (from what I understand, banks don't really call in loans unless payments are missed), secondly it costs you nothing to just have it sitting there. Thirdly, you can avoid drawing down on equity for potentially years (if you pull enough), allowing time for the market to recover.

Without this, I don't think I would consider defined benefit a direct 1-to-1 translation with bonds. For example, if I had enough from the defined benefit to make up the 30% of your 70/30 portfolio, I would not think 100% equities is suitable for myself. I do think you can go more aggressive, I just don't think there's necessarily a 1-to-1 translation.

Arapiles

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Re: Australian Investing Thread
« Reply #5002 on: July 15, 2020, 03:20:27 AM »
Thanks Richmond2020.  That is very useful.

Andy R, can you expand a bit on your reservations?  I donít entirely understand why drawing down on an offset account (or not) would impact the risk profile of holding (separate) funds in a defined benefit superannuation account.   There might be a simple reason - I just canít figure out.  Many thanks in advance!

Andy R

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Re: Australian Investing Thread
« Reply #5003 on: July 15, 2020, 04:39:02 AM »
Andy R, can you expand a bit on your reservations?  I donít entirely understand why drawing down on an offset account (or not) would impact the risk profile of holding (separate) funds in a defined benefit superannuation account.   There might be a simple reason - I just canít figure out.  Many thanks in advance!

If you have enough funds in the defined benefit to cover an equivalent to your entire 30% of bonds in a 70/30 portfolio, and then decided based on that to go 100% equities for the rest of your money, then

1. If you have no offset or equity to draw cash from in a stock market crash, you would be drawing down depleting your stocks faster (eg while it was 33% down you would be drawing down and depleting your stocks at 1.5x the rate for example).

2. If you had some cash available in an offset, you could draw on them, not depleting your funds at 1.5x the rate as which you would by drawing down equities. You would owe some more interest, which would compound, but it wouldn't be anything in the same realm as drawing down from a 100% equities portfolio when your stocks were priced low.

3. If you had no offset or other cash available and decided to go with say 80/20 in what is remaining, when stocks were down, your bonds would naturally be overweight to your target allocation and you would be drawing from them.

I suppose if your entire 70% in stocks was discretionary and you could cut most of that spending in down years, you should be fine, but that'd be a lot of discretionary spending.

Arapiles

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Re: Australian Investing Thread
« Reply #5004 on: July 15, 2020, 05:01:41 AM »
Many thanks, Andy.  This is helpful on many fronts.  I now see your point.  We hold at least one yearís expenses in cash so the defined benefit would only be one portion of our ďsafe assetsĒ. 

Thanks to everyone for their considered responses.  This gives us a more accurate baseline to assess our portfolio as we approach early retirement.  We are hoping to retire in the next 6 years, when my wife will turn 55 and is able to access her defined benefit super.  We know there is a higher payout on super if she continues working but our overall holdings are sufficiently large for our needs (over 25x current expenses) that we are comfortable shifting to retirement.  The next task is for us to determine whether the 70/30 asset allocation is the right balance both in the lead-up to retirement and afterwards or whether a more conservative allocation would be more appropriate.  Iím also trying to figure out how sequence of returns risk can best be managed from an Australian perspective.  Any thoughts on strategies to deal with the latter would be greatly appreciated.  Thanks again for the generous and thoughtful replies.

ozbeach

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Re: Australian Investing Thread
« Reply #5005 on: July 27, 2020, 03:28:07 PM »
Yeah... Divs are getting slaughtered... Iím waiting for the LIC industry to start spouting the benefits of their model because many of those older LICs will be able to smooth dividends using prior year earnings.


Announced yesterday: AFI held its dividend at 14c, same as last year.

nofriends

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Re: Australian Investing Thread
« Reply #5006 on: July 27, 2020, 07:08:33 PM »

Announced yesterday: AFI held its dividend at 14c, same as last year.

They are an outlier of the old school LIC's so far, MLT and BKI reduced their dividends.

Will be interesting to see what ARG does when they report in 3 weeks time. I tend to think they pushed out their report date on purpose to get a feel of what the reporting season would be like and would gauge their dividend payment accordingly.

turboslob

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Re: Australian Investing Thread
« Reply #5007 on: August 01, 2020, 06:21:57 PM »
Seeking a bit of advice, if you can spare a few mins.
A while back, I read that VDHG was an easy 'don't overthink it' option for investing. So, I opened a managed fund and starting building it. I have a wholesale account, but I'm not close to the 500k limit where fees drop (currently ~150k, and not likely to grow quickly for next couple of years). So, I'm pondering whether to pull out and re-buy in ETFs to save on the management fee.

From what I can tell, with the managed fund, my buy & sell cost is 0.9% and management is the same.
With ETFs, buy cost is broker dependent and management is only .27%. Selling fees are again just brokerage (I'm not sure on this, if anyone can clarify).

So, every year I'm paying ~150,000*.009=1350. Whereas ETF would be 150,000*.0027 $405.
I guess I'm paying an additional 20 bucks a week for the managed fund, and will get hit with a 1350 bill to sell.

Can anyone help me with what I need to consider before ditching the managed fund for the ETFs? I'm tracking the tax stuff (let an accountant sort that out), but the way I figure it I don't intend on selling anytime soon and my break-even point is somewhere beyond a year.

Any other considerations I'm overlooking?

Thanks, Slob.

mspym

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Re: Australian Investing Thread
« Reply #5008 on: August 01, 2020, 06:31:27 PM »
@turboslob you can also call them and switch to the wholesale fund. I did it when I had about as much as you have now. Unlike America, they don't switch you automatically.

Andy R

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Re: Australian Investing Thread
« Reply #5009 on: August 01, 2020, 09:48:12 PM »
From what I can tell, with the managed fund, my buy & sell cost is 0.9% and management is the same.

So, every year I'm paying ~150,000*.009=1350.

It is 0.9% on the first $X, then it lowers beyond that, so you will not be paying 0.9% on the whole lot.

Having said that, I think the retail fund sux with these higher fees. The only advantage is if you absolutely need the set-and-forget auto BPay feature. Although there is a new platform in beta testing that allows you to setup auto direct credit, and you can even input your target allocation if you have multiple funds, and the auto direct credit will be directed to purchase the fund that is most underweight to your target. The brokerage is the same as SelfWealth. Once this is up and running I don't see a single reason to go for the retail funds. Along with lower cust, it will also be more tax efficient because ETFs are by their structure more tax efficient than the managed funds.

In the mean time, as mentioned by mspym, you could ask them. I expect them to say no since they have stopped allowing wholesale fund buy-ins for 100k per fund which they used to do despite advertising it for 500k, because they want to direct people to their new investor platform (which offers no benefit and also does not even allow auto bpay directly into the fund), but maybe you can say that the only reason you went with the retail funds was that a Vanguard representative told you on the phone that when you get to 100k per fund they would let you in. I would play on that hard and if they say no, take it up with higher management as a complaint. They may let you in to avoid a negative customer experience.

MrThatsDifferent

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Re: Australian Investing Thread
« Reply #5010 on: August 02, 2020, 03:59:08 AM »
Iíve got the High growth  Lifestrategy fund that is .29 after $100k If that helps.

turboslob

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Re: Australian Investing Thread
« Reply #5011 on: August 02, 2020, 04:46:09 PM »
@turboslob you can also call them and switch to the wholesale fund. I did it when I had about as much as you have now. Unlike America, they don't switch you automatically.

Yes, I'm in the wholesale fund, but I thought as I was <500k they'd be charging me the 'sub-500k' management fee of regular managed funds.

Iíve got the High growth  Lifestrategy fund that is .29 after $100k If that helps.

Thanks, do you happen to know if that's the norm across different investments? Ie, up to 100k at 'non wholesale' rates and then you get wholesale rates?

If the case, it doesn't change the figures too much; still looks far cheaper to be in ETFs over the long term (+10 years).

MrThatsDifferent

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Re: Australian Investing Thread
« Reply #5012 on: August 03, 2020, 02:06:28 AM »
Iím not sure actually. I guess itís worth it to me because I donít have the right mind to stay on top of things and re-balance and all of that. I went with the easy as possible way. I just bpay  money to the Lifestrategy account and let it do its thing.

Notch

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Re: Australian Investing Thread
« Reply #5013 on: August 05, 2020, 04:26:53 AM »
@turboslob you can also call them and switch to the wholesale fund. I did it when I had about as much as you have now. Unlike America, they don't switch you automatically.

Yes, I'm in the wholesale fund, but I thought as I was <500k they'd be charging me the 'sub-500k' management fee of regular managed funds.


If you're in the wholesale fund, you are charged the lower wholesale expense ratio, regardless of the balance.  You can check your statements online to verify.

Arapiles

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Re: Australian Investing Thread
« Reply #5014 on: August 05, 2020, 05:42:44 PM »
For what it is worth, I'm also invested in some of the diversified offerings of the Vanguard wholesale fund and have been for some years.  When I started, my balance was over $100,000 but below $500,000.  I'm now well above the higher threshold.  I've always been charged 0.29% management fee.

MrThatsDifferent

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Re: Australian Investing Thread
« Reply #5015 on: August 08, 2020, 02:47:55 PM »
Hey, all you occupied owners with offset accounts, Iím wondering whatís your offset vs investment strategy? How much do you keep in your offset, and what do you put in your non-super investment accounts? I know most have their salaries deposited into their offset and then pay from that. And Iím assuming that most would keep their emergency money there, but how much more?

Iím trying to work out a strategy and hereís what Iím thinking. After I buy a place, I donít invest any money until I get $100k into my offset account. And then, each fortnight, I out 1/3 of my savings into the offset and then 2/3 into my investment account.

The calculators Iíve found suggest using this I might have the mortgage paid off in 6-9 years. That would be around the time I want to retire, and I guess I would have a good stash to draw from until I reach the age to access Super. Does any of this make sense or am I seeing it wrong?

Wadiman

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Re: Australian Investing Thread
« Reply #5016 on: August 08, 2020, 11:25:44 PM »
MrThatsDifferent - I kept things simple when I was in that situation about five years back - not knowing what was going to happen with interest rates or investment returns I decided to do a 50/50 split between the offset and investments.  It gave me peace of mind at the time.

MrThatsDifferent

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Re: Australian Investing Thread
« Reply #5017 on: August 09, 2020, 12:17:39 AM »
Thanks Wadiman.  Did you do that the entire time of your mortgage? Did you complete your mortgage quicker or that doesnít matter to you?

MrThatsDifferent

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Re: Australian Investing Thread
« Reply #5018 on: August 09, 2020, 12:31:19 AM »
Also, do you all use only the offset account and never extra-repayments or in the redraw account?

Wadiman

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Re: Australian Investing Thread
« Reply #5019 on: August 09, 2020, 01:18:41 AM »
Only got an offset about five years ago - started with a LOC.  Never had a redraw.  Now have an amount in the offset equivalent to the Ppor loan debt (about $500k).  As things happened - with career progression and a high savings rate I was effectively able to pay off the mortgage quite a few years ahead of schedule.

MrThatsDifferent

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Re: Australian Investing Thread
« Reply #5020 on: August 09, 2020, 02:55:33 AM »
Thank you Wadiman. So what do you do when the offset equals the remainder of the loan? Did you pay it off completely or do you just keep the money in the offset and keep paying the mortgage?

marty998

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Re: Australian Investing Thread
« Reply #5021 on: August 09, 2020, 05:33:52 AM »
Thank you Wadiman. So what do you do when the offset equals the remainder of the loan? Did you pay it off completely or do you just keep the money in the offset and keep paying the mortgage?

I had a full offset for 5 years against my PPOR while I procrastinated what to do. It was going to be a house deposit for when I get married, have babies yadda yadda, but since that hasnít happened I bit the bullet, paid the loan down to 2c, and am redrawing it to buy shares. Paying it down to a sufficiently small amount and reborrowing it has now changed the purpose So I can claim the interest on tax, without the problem of it being a mixed purpose loan.

Canít sit around waiting for life to happen... Iíve lost years of potential investment earning by not doing this sooner.

MrThatsDifferent

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Re: Australian Investing Thread
« Reply #5022 on: August 09, 2020, 02:47:51 PM »
Thank you Wadiman. So what do you do when the offset equals the remainder of the loan? Did you pay it off completely or do you just keep the money in the offset and keep paying the mortgage?

I had a full offset for 5 years against my PPOR while I procrastinated what to do. It was going to be a house deposit for when I get married, have babies yadda yadda, but since that hasnít happened I bit the bullet, paid the loan down to 2c, and am redrawing it to buy shares. Paying it down to a sufficiently small amount and reborrowing it has now changed the purpose So I can claim the interest on tax, without the problem of it being a mixed purpose loan.

Canít sit around waiting for life to happen... Iíve lost years of potential investment earning by not doing this sooner.

Thank you @marty998 . Iíd like to learn from your hindsight. Is it ok if I PM you for more details, unless youíre ok explaining what you did here? Iím a bit slow with this stuff and need the steps broken down to understand it.

From what I am reading, you:
1. Had an offset account, and put in enough money to equal what you owed
2. You left it like that for an additional 5 years
3. You then paid off the loan entirely except for 2c (not sure if thatís really 2 cents of something else?)
4. But when you paid off, you actually put that money in a redraw account, so you could access it
5. You then pulled money out of your redraw account, used that money to buy shares
6. Because of using the money for shares youíre able to claim the interest (of the PPOR or shares?) on your taxes for a deduction

Happy if you could sort my understanding. If you had to do all again, knowing what you know now, what would be your steps and strategy? I definitely want to learn from people and donít know anyone who is mustachian strategic with money here.

Big thank you in advance for any insights and sharing your experience.

marty998

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Re: Australian Investing Thread
« Reply #5023 on: August 09, 2020, 03:59:16 PM »
Thatís exactly it. The loan was $250,000.02, with an offset of $250,000.02. And there was also about $7,500 extra available (so the loan facility total was ~$257,500).

Paid down $250,000.00. I didnít put it in a redraw account as such. CBA loans donít work that way.... the money is always simply just available to take out of the loan account whenever you want. I guess you could call it redraw by another name.

The bank sent me a note asking if I wanted to close the loan or keep the loan open (now with $257,500 available).

Have pulled $25,000, going to draw more over the coming months.

marty998

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Re: Australian Investing Thread
« Reply #5024 on: August 09, 2020, 04:02:09 PM »
Your circumstances are going to be different to mine @MrThatsDifferent.

I wouldnít feel comfortable telling you what to do without knowing all your circumstances.

Trevor Reznik

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Re: Australian Investing Thread
« Reply #5025 on: August 09, 2020, 05:36:26 PM »
Hi Marty,

So you've drawn the 25K and you're paying interest on it, have you bought the shares yet?

I think what I would do is buy some shares and say the settlement is $10,054.12 and then I would draw $10,054.12 on the loan and ship it straight over to pay the settlement bill.  That way it's pretty concrete paper trail that the money was used to buy shares.

MrThatsDifferent

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Re: Australian Investing Thread
« Reply #5026 on: August 09, 2020, 09:43:59 PM »
Your circumstances are going to be different to mine @MrThatsDifferent.

I wouldnít feel comfortable telling you what to do without knowing all your circumstances.

Thank you very much @marty998   I understand, that all makes sense. Iím a long way from executing any of this, so have plenty of time to discuss when things are more concrete. I just think having an offset account is such a brilliant thing. I want to use it well but donít want to miss out on the market.

turboslob

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Re: Australian Investing Thread
« Reply #5027 on: August 10, 2020, 12:24:54 AM »
Seeking a bit of advice, if you can spare a few mins.
A while back, I read that VDHG was an easy 'don't overthink it' option for investing. So, I opened a managed fund and starting building it. I have a wholesale account, but I'm not close to the 500k limit where fees drop (currently ~150k, and not likely to grow quickly for next couple of years). So, I'm pondering whether to pull out and re-buy in ETFs to save on the management fee.

From what I can tell, with the managed fund, my buy & sell cost is 0.9% and management is the same.
With ETFs, buy cost is broker dependent and management is only .27%. Selling fees are again just brokerage (I'm not sure on this, if anyone can clarify).

So, every year I'm paying ~150,000*.009=1350. Whereas ETF would be 150,000*.0027 $405.
I guess I'm paying an additional 20 bucks a week for the managed fund, and will get hit with a 1350 bill to sell.

Can anyone help me with what I need to consider before ditching the managed fund for the ETFs? I'm tracking the tax stuff (let an accountant sort that out), but the way I figure it I don't intend on selling anytime soon and my break-even point is somewhere beyond a year.

Any other considerations I'm overlooking?

Thanks, Slob.

Just to close the loop on this, my initial assumption was wrong. It seems that once you're in a wholesale fund you're paying the lower rate (.029% at time of writing).

Calcs I did to confirm was:
Looked at old statement, paid about $41 per month fees with value ~166k
41 * 12 ~=500 per annum
So, interest rate should be 166000 * x = 500
x=500/166000 = ~0.03%

To sum up, I won't be moving out of the wholesale fund if I'm almost paying the same as ETFs, and enjoy the ability to put in a small amount every pay or two.

Thanks for the help; I should've just looked at a statement to begin with....
« Last Edit: August 10, 2020, 12:29:13 AM by turboslob »

MrThatsDifferent

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Re: Australian Investing Thread
« Reply #5028 on: August 15, 2020, 04:45:56 PM »
Should I cancel my insurance in my super?

I have $300k for death, $300k for disablement and $3000/month income protection.  I paid $664 for the year for that insurance, $67.07 a month. Is it worth it? Iím a SINK. If I die, my estate will already have enough for anyone that inherits. Income protection is tough to claim. Seems like a waste of money. Am I missing something? Should I drop it?

Andy R

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Re: Australian Investing Thread
« Reply #5029 on: August 15, 2020, 08:53:10 PM »
Curious why a SINK would need term life insurance. I thought that would be for dependants. I suppose if you were looking after your parents or someone else it makes sense. Not sure I would cancel disability though unless you are nearly financially independent.

marty998

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Re: Australian Investing Thread
« Reply #5030 on: August 15, 2020, 09:53:58 PM »
Should I cancel my insurance in my super?

I have $300k for death, $300k for disablement and $3000/month income protection.  I paid $664 for the year for that insurance, $67.07 a month. Is it worth it? Iím a SINK. If I die, my estate will already have enough for anyone that inherits. Income protection is tough to claim. Seems like a waste of money. Am I missing something? Should I drop it?

Death cover is a waste for you. Income protection is also a waste IMO. As Snoop Dogg would say ďDrop it like itís haaaawtĒ

TassieFI

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Re: Australian Investing Thread
« Reply #5031 on: August 16, 2020, 12:04:28 AM »
I'd drop all the insurance as per what others have said given than you are a SINK and look into only getting a trauma/disability policy which I personally think everyone should have unless they are FI (so glad we had ours.....).  I'd suggest getting quotes from a few insurance companies for trauma/disability and check the fine print in your policy that you have with your Super if you decide to keep it long term. 

Also be aware that if you do arrange for trauma/disability coverage from a company separate from your Super that you may have to be with them for a minimum time period before you could collect, so it would be wise to keep the coverage you have with your Super until you have passed the minimum time period with a new company.  Good luck!

MrThatsDifferent

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Re: Australian Investing Thread
« Reply #5032 on: August 16, 2020, 06:26:13 PM »
Thanks all. Yeah, as I was reading about it I was coming to the conclusion that only disability cover makes sense. Will cancel the other two for sure.

bigchrisb

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Re: Australian Investing Thread
« Reply #5033 on: August 17, 2020, 09:24:59 AM »
I've had a trauma claim paid, and was pretty glad to have the coverage. Even then it was traumatic to claim, taking a year to actually get paid. Ok so the pun is bad, but hopefully the point made.

Tpd policies are notoriously harder to claim.

Unless you are FI, YOU are dependent on your future earnings. If you have odorous (edit - positive, teach me to type on the phone!) net worth and no (planned) dependents, then ditch death cover for sure.
« Last Edit: August 19, 2020, 06:32:49 AM by bigchrisb »

MrThatsDifferent

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Re: Australian Investing Thread
« Reply #5034 on: August 18, 2020, 12:58:57 PM »
I've had a trauma claim paid, and was pretty glad to have the coverage. Even then it was traumatic to claim, taking a year to actually get paid. Ok so the pun is bad, but hopefully the point made.

Tpd policies are notoriously harder to claim.

Unless you are FI, YOU are dependent on your future earnings. If you have odorous net worth and no (planned) dependants, then ditch death cover for sure.

Hey @bigchrisb youíre who I think about regarding this knowing that you claimed this. I donít think I even have trauma in my super. Hope to never want to claim this. TPD feels like a waste of money but hate to take that chance during a pandemic.

TassieFI

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Re: Australian Investing Thread
« Reply #5035 on: August 19, 2020, 06:51:38 PM »
We claimed for a completely unexpected trauma as well and boy were we thankful for the cover!  It was a massive relief to not have financial worries while dealing with a serious health issue.  We had an AMAZINGLY good experience with the company we went through (the money was deposited into our account before we even received the letter saying the claim had been paid) which considering how bad it is to claim an insurance payout we were totally shocked by. 

Iím a huge proponent of trauma insurance because I work in healthcare where I see cancer and other serious disease diagnoses all the time.  Sadly it can be a huge financial hit to patients (they usually either temporarily or permanently canít work and may have medical costs) so Iím probably more of a proponent of trauma insurance than most.

lazycow

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Re: Australian Investing Thread
« Reply #5036 on: August 19, 2020, 07:57:12 PM »
OK, I need to start reading from the beginning! Hopefully all my questions have been answered already, but my husband and I are early 50's, mortgage-free with a decent amount of cash ($600K +) and around $200K in super (he is self-employed). Still debating whether we buy a rental property locally and invest in ETFs, or buy 2 properties. Will report back in a few days when I've read all your wise words!

marty998

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Re: Australian Investing Thread
« Reply #5037 on: August 21, 2020, 02:44:46 PM »
OK, I need to start reading from the beginning! Hopefully all my questions have been answered already, but my husband and I are early 50's, mortgage-free with a decent amount of cash ($600K +) and around $200K in super (he is self-employed). Still debating whether we buy a rental property locally and invest in ETFs, or buy 2 properties. Will report back in a few days when I've read all your wise words!

This should be an easy answer. The answer is a third option.

Each of you use the $300k non-concessional ďbring forwardĒ contribution rules and place the money in super.

Let it sit and compound for 10 years.

Withdraw tax free pensions for life, with no admin hassle.
« Last Edit: August 21, 2020, 02:47:35 PM by marty998 »

lazycow

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Re: Australian Investing Thread
« Reply #5038 on: August 22, 2020, 01:35:24 AM »
OK, I need to start reading from the beginning! Hopefully all my questions have been answered already, but my husband and I are early 50's, mortgage-free with a decent amount of cash ($600K +) and around $200K in super (he is self-employed). Still debating whether we buy a rental property locally and invest in ETFs, or buy 2 properties. Will report back in a few days when I've read all your wise words!

This should be an easy answer. The answer is a third option.

Each of you use the $300k non-concessional ďbring forwardĒ contribution rules and place the money in super.

Let it sit and compound for 10 years.

Withdraw tax free pensions for life, with no admin hassle.

Thanks for that Marty998. I hadn't considered that. It would be a great option, however *whispers* my husband doesn't believe in Superannuation. Am I allowed to say that?

Andy R

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Re: Australian Investing Thread
« Reply #5039 on: August 22, 2020, 02:29:48 AM »
It would be a great option, however *whispers* my husband doesn't believe in Superannuation. Am I allowed to say that?

You're husband is an idiot. It's free money ffs.

deborah

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Re: Australian Investing Thread
« Reply #5040 on: August 22, 2020, 02:42:07 AM »
Iím the only person in my family who has superannuation. My siblings had businesses, and my parents were too old to have to have it. My parents would be much better off if they had it, and constantly complain about how much better off their friends are who do have it, but who worked at lower paid jobs. I think that itís helped me substantially financially to have it. Iím sure my siblings would be better off if they had it too.

TassieFI

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Re: Australian Investing Thread
« Reply #5041 on: August 22, 2020, 02:58:45 AM »
Out of curiosity, what about superannuation does your husband not believe in, or have a fear of?  Maybe if we knew what his concerns are, it would be easier to advise as to how to go about showing him that it could potentially be a great option for the two of you.

Arapiles

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Re: Australian Investing Thread
« Reply #5042 on: August 22, 2020, 05:41:00 PM »
I'm also curious as to his reservations.  The only real (current) downside is the absence of control over the funds invested in a superannuation vehicle.  The very significant upside are the generous tax benefits that accrue to funds held within super, particularly (but not only) once you are able to access those funds (at normally on turning 60).   I'm in a roughly similar age bracket to you and your husband.  I'm about to turn 50.  For the last 20 years or so ago, I've been fairly rigorous in keeping my total investments split equally between holdings within and outside super.  The gains in super due to compounding returns have been incredible.  I'm now seriously thinking of shifting a greater proportion of my total investments into super in the run-up to turning 60. 

marty998

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Re: Australian Investing Thread
« Reply #5043 on: August 22, 2020, 10:12:08 PM »
I'm also curious as to his reservations.

Probably believes the nonsense about the government ďraidingĒ super accounts and changing the rules all the time* and blah blah blah.

The current government certainly hasnít done anything to support or promote community understanding of what superannuation is and why it is important.

Even if they have no policies on it, or are ideologically opposed to it, they should not leave it to providers with vested interests to Ďeducateí the public.

Such are the times. Not many places you can go for unbiased facts., and the websites that you can go to are not well known.

*The really ridiculous trope I hate is the belief that people ďneed certaintyĒ to invest / contribute to super. Two things wrong with that view. The world doesnít owe anyone a guaranteed return, and since when has anything in life ever been certain (see 2020 lol).

Trevor Reznik

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Re: Australian Investing Thread
« Reply #5044 on: August 23, 2020, 01:09:53 AM »
I've spoken to people recently who were taking 10k out of their super 'because if they invest it and lose it it's gone, so I should just take it out now while I can'.

TassieFI

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Re: Australian Investing Thread
« Reply #5045 on: August 23, 2020, 01:21:44 AM »
Oh dear...... 😬

chevy1956

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Re: Australian Investing Thread
« Reply #5046 on: August 23, 2020, 11:39:52 PM »
I'm also curious as to his reservations.

Probably believes the nonsense about the government ďraidingĒ super accounts and changing the rules all the time* and blah blah blah.

The current government certainly hasnít done anything to support or promote community understanding of what superannuation is and why it is important.

Even if they have no policies on it, or are ideologically opposed to it, they should not leave it to providers with vested interests to Ďeducateí the public.

Such are the times. Not many places you can go for unbiased facts., and the websites that you can go to are not well known.

*The really ridiculous trope I hate is the belief that people ďneed certaintyĒ to invest / contribute to super. Two things wrong with that view. The world doesnít owe anyone a guaranteed return, and since when has anything in life ever been certain (see 2020 lol).

When it comes to understanding how to invest people are clueless. I work for a big Bank. One of my friends is a general manager earning big dollars. He was telling us how he was joining some investment scheme investing in the property market. We also have our own Super fund with low fees and index options.

It's like free money is over here but because it's too easy they do something else.

jk5954

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Re: Australian Investing Thread
« Reply #5047 on: August 24, 2020, 04:57:58 AM »
I'm also curious as to his reservations.

Probably believes the nonsense about the government ďraidingĒ super accounts and changing the rules all the time* and blah blah blah.

The current government certainly hasnít done anything to support or promote community understanding of what superannuation is and why it is important.

Even if they have no policies on it, or are ideologically opposed to it, they should not leave it to providers with vested interests to Ďeducateí the public.

Such are the times. Not many places you can go for unbiased facts., and the websites that you can go to are not well known.

*The really ridiculous trope I hate is the belief that people ďneed certaintyĒ to invest / contribute to super. Two things wrong with that view. The world doesnít owe anyone a guaranteed return, and since when has anything in life ever been certain (see 2020 lol).

When it comes to understanding how to invest people are clueless. I work for a big Bank. One of my friends is a general manager earning big dollars. He was telling us how he was joining some investment scheme investing in the property market. We also have our own Super fund with low fees and index options.

It's like free money is over here but because it's too easy they do something else.

They really really are! My brother-in-law's (my wife's brother) family is terrible with money. Things like constantly needing to borrow money from his parents whenever the smallest unexpected bill hits, and anything money or budget related is too hard.

I bought them a copy of The Barefoot Investor thinking it might at least teach them a thing or 2 or point them in the right direction. Next thing I hear is that they have gone and seen a financial advisor who has advised them to start a SMSF and buy an investment property through it. Which they did.

At least it allows me to say to my wife, 'This is why we do some things, so that we don't end up like them.'

MrThatsDifferent

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Re: Australian Investing Thread
« Reply #5048 on: August 25, 2020, 02:29:09 PM »
Hey all Iíve asked this in the main board but as an Australian perspective would help, thought Iíd post here too:
Iím curious, as I try to navigate thinking about home ownership:
1. How much deposit did you have for your first home?
2. Did you take advantage of any first home buyerís schemes?
3. How long did that take you to accumulate?
4. Did you put your investments on hold or firehosed your money for the deposit?
5. What, if anything, would you do differently or better now?

Thanks any and all that share any insights.

middo

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Re: Australian Investing Thread
« Reply #5049 on: August 25, 2020, 07:18:08 PM »
1.  We had 17,000 deposit for a $110,000 house (back in 1993).  We actually borrowed 90% rather than wait to have the 20% deposit.  We saved it up as quick as we could, but with a baby on the way, we wanted to no longer be renting.

2.  No first home owners scheme back then. 

3.  It took us about 9 months to accumulate, as we were both working and saved every single cent.

4.  We didn't have any other investments.  I didn't even really know about investing (other then property) until 5 years ago.  :(

5.  Nothing to buy the house.  I would do the same.  But I would watch my lifestyle creep and learn about investing before I turned 45 in hindsight...
« Last Edit: August 25, 2020, 11:33:05 PM by middo »