Author Topic: Australian Case Study: Newbies to MMM - where to start?  (Read 18251 times)

tinyfrankie

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Australian Case Study: Newbies to MMM - where to start?
« on: April 12, 2015, 04:28:19 AM »
Hi all,

I stumbled across MMM this past weekend and have barely stopped reading since. After a fair bit of reading of the website and this forum I've become a tad overwhelmed by my lack of knowledge and basically need a bit of direction.

Here is a breakdown of where my partner and I are currently at:

Just us two - no kids yet, mid 20's.
Currently renting for $400 a week
After tax income: Me - $55822, Partner - $58708
Currently my partner has $80,000 in military super and I have about $10,000 as I have not long finished study
No debt - including no study loan (thank goodness)
We have no income producing assets currently but have a combined total of $132000 in high interest savings accounts
My partner has a car (paid with cash) worth $22,000 that should last us for many years
Expenses are currently $50,000 but this is quite a comfortable number and can definitely be reduced - this includes some room for travel which we feel is important to experience while we are young.


What would an experienced Mustachian do in our situation? I've started reading bits an pieces about stocks but at this point have no clue. As my partner is currently in the military we won't know where we will be living in Australia in the next year or two so we aren't too sure about real estate currently.

From what I've read so far it looks as though our money sitting in the bank really isn't doing all that much for us.

Any suggestions are much appreciated!

Cheers.







« Last Edit: April 15, 2015, 03:57:39 PM by tinyfrankie »

JLR

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Re: Australian Case Study: Newbies to MMM - where to start?
« Reply #1 on: April 12, 2015, 04:50:32 AM »
I'm not going to give out any advice, as I'm such a beginner myself, but I just wanted to welcome you to the forums. :)

marty998

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Re: Australian Case Study: Newbies to MMM - where to start?
« Reply #2 on: April 12, 2015, 04:53:17 AM »
Hi tinyfrankie,

Welcome to the forums. What part of the country are you in?

It's fine to have $132k in cash if you are saving for a house deposit...but it doesn't seem like this is the case for you.

If you're comfortable renting I would suggest to look for a place anyway, buy something nice that you'd like to move into down the track and rent it out in the meantime.

With your incomes + the assumed rental income you could have more buying power than you realise.


tinyfrankie

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Re: Australian Case Study: Newbies to MMM - where to start?
« Reply #3 on: April 12, 2015, 05:04:56 AM »
Thanks JLR! Very happy to be here :)

Hi Marty998 - thanks for your reply! We are currently living in NSW where house prices are through the roof. We were considering buying a property we would eventually like to move in to in Southeast Queensland- to eventually be near my partner's family / the lifestyle is pretty awesome. We had toiled with the idea of renting it out in the meantime whilst we are getting posted around the country. My partner would need to get out of the military (and if not retired yet) find other means of income to be able to stay on track.

I think we are just a bit nervous / unsure if buying a property is a good first move and how stocks should come into the equation.
« Last Edit: April 15, 2015, 03:58:18 PM by tinyfrankie »

marty998

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Re: Australian Case Study: Newbies to MMM - where to start?
« Reply #4 on: April 12, 2015, 05:39:36 AM »
We were considering buying a property we would eventually like to move in to on the Sunshine Coast - to eventually be near my partner's family / the lifestyle is pretty awesome. We had toiled with the idea of renting it out in the meantime whilst we are getting posted around the country. My partner would need to get out of the Air Force (and if not retired yet) find other means of income to be able to stay on track.

I think we are just a bit nervous / unsure if buying a property is a good first move and how stocks should come into the equation.

Of course it's a good first move...do you want to pay half a million now or a million in 10 years time? By then you could have paid off the mortgage and probably acquired a couple more.

You have have so many advantages - relatively high, dual incomes, large capacity to save (>$1,000 a week), your partner has a high super balance for his age too (will compound to $1m or more by the time he's eligible to access it). If you're happy with the place on the Sunshine Coast you should go for it...(assuming you've done your due diligence).

If you do buy, get a depreciation schedule and get a good accountant too. Have a think about ownership...if you take time out of work to have kids then it may be a good idea to have the property in his name*, alternatively, if the property is going to be positively geared, put it in your name if your income in future will be lower. But that depends on how long it will be till you move in (if at all).

I was a bag of nervous beans when I bought my first place. The second one was meh. Turned up to the bank branch in a singlet, boardies and thongs to sign the mortgage docs. After a while you stop thinking of how much (good investment) debt you have and start thinking about just how well your assets are doing.

*sorry, I'm assuming you're the lady. Can tell by the writing style and an inappropriately sexist guess from your Partner's occupation. But been known to get it wrong sometimes :)


tinyfrankie

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Re: Australian Case Study: Newbies to MMM - where to start?
« Reply #5 on: April 13, 2015, 02:40:37 AM »
Thanks again Marty998,

You were spot on I am the female portion of this partnership! :)

Sorry I may have implied (completely understandable after rereading my previous post) that we had already found a house in South East Queensland. We haven't looked all that hard yet however, we know which suburb we would like to buy in if possible and we will definitely do our research before purchasing. I completely understand where you are coming from in terms of pay half a million now or a million in ten years time... I think it is mainly fear that is holding us back. Additionally, my partner will never get posted there which means he has to have a career change and at this stage we have no clue as to what that would be.

Whats more,  after having a chat last night there are some conditions I was unaware of around military super where he will lose a large proportion of that if he gets out of Defence. He would need to retire in Defence to get the full amount (sigh).

In terms of planning for the future we are in a state of ifs and buts and maybes and seem to be going around in circles a bit.

I think the house is a good idea however, am not sure how to catapult from there. I've looked at the idea of borrowing on one house to get the next and to continue exponentially with essentially good debt and living off rental income / a line of credit at less than the net worth is increasing. This does not seem to be the MMM style I assume as it could be very risking with all eggs in one basket.

If we were to buy (this might be a stupid question) would we be better off with a lower deposit and the rest in an offset rather than a bigger deposit? I'm fairly sure offset is better?

It frustrates me how young adults are not taught any of these things that can help them. Unless you have a good mentor (which we don't) it really is self taught. The internet and books help however, there is so much conflicting advice!

Do you have any advice / places to seek information regarding the Stock market? The MMM posts intrigue me but I'm unsure how this applies in Australia.

Thanks again. 

« Last Edit: April 15, 2015, 03:59:10 PM by tinyfrankie »

marty998

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Re: Australian Case Study: Newbies to MMM - where to start?
« Reply #6 on: April 13, 2015, 05:46:42 AM »

If we were to buy (this might be a stupid question) would we be better off with a lower deposit and the rest in an offset rather than a bigger deposit? I'm fairly sure offset is better?

It frustrates me how young adults are not taught any of these things that can help them. Unless you have a good mentor (which we don't) it really is self taught. The internet and books help however, there is so much conflicting advice!


Have a 20% deposit to avoid LMI, borrow 80% and dump whatever is leftover in an offset account. Set your loan up as interest only and keep dumping more and more into the offset account.

Buy yourself some time then to figure out what to do next :)


Do you have any advice / places to seek information regarding the Stock market? The MMM posts intrigue me but I'm unsure how this applies in Australia.


Open a Commsec account. Then you've got a variety of options...

The MMM route would be to buy the index, which you can do buy buying into the Vanguard ASX 300 fund (code "VAS"). Or you can buy the State Street version of the fund (STW).

If you don't want exposure to mining, then my favourite is the Vanguard high yield fund (VHY).

If you don't want to go down the path of index funds, there's a somewhat semi-famous stockbroker Marcus Padley who is a regular commentator in the mainstream press. He rails against the "moron portfolio", which is popular with so called "mum & dad" retail investors. The idea is if you don't know what you're doing, then buy the top 10-20 and you'll do as well as anyone. Such a portfolio consists of the usual suspects:

- Commonwealth Bank (CBA)
- Westpac (WBC)
- ANZ Bank (ANZ)
- Telstra (TLS)
- Woolworths (WOW)
- Wesfarmers (WES)
- AMP (AMP)
- Insurance Australia Group (IAG)
- Medibank Private (MPL)

Apart from AMP, if you held a portfolio of these over the very long term then you've done very well indeed. I stay away from NAB if I can, there seems to be something fundamentally wrong with that bank, every few years they seem to just blow up billions.

ShoulderThingThatGoesUp

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Re: Australian Case Study: Newbies to MMM - where to start?
« Reply #7 on: April 13, 2015, 06:00:19 AM »
- Commonwealth Bank (CBA)
- Westpac (WBC)
- ANZ Bank (ANZ)
- Telstra (TLS)
- Woolworths (WOW)
- Wesfarmers (WES)
- AMP (AMP)
- Insurance Australia Group (IAG)
- Medibank Private (MPL)

Are there not index funds in Australia that will basically buy into the total stock market at a very low "maintenance fee"? In the US everybody here recommends those because you're not tracking individual companies at all.

marty998

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Re: Australian Case Study: Newbies to MMM - where to start?
« Reply #8 on: April 13, 2015, 06:11:56 AM »
- Commonwealth Bank (CBA)
- Westpac (WBC)
- ANZ Bank (ANZ)
- Telstra (TLS)
- Woolworths (WOW)
- Wesfarmers (WES)
- AMP (AMP)
- Insurance Australia Group (IAG)
- Medibank Private (MPL)

Are there not index funds in Australia that will basically buy into the total stock market at a very low "maintenance fee"? In the US everybody here recommends those because you're not tracking individual companies at all.

You didn't read my post ....  STW and VAS are the 2 main popular ones, though the fees are not as low as the US 0.05%

okonomiyaki

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Re: Australian Case Study: Newbies to MMM - where to start?
« Reply #9 on: April 13, 2015, 06:52:23 AM »
Quote
The MMM route would be to buy the index, which you can do buy buying into the Vanguard ASX 300 fund (code "VAS"). Or you can buy the State Street version of the fund (STW).

If you don't want exposure to mining, then my favourite is the Vanguard high yield fund (VHY).

Stupid newbie question /sorry if it makes very little sense/: I know there is Vanguard - and the funds that are part of that I can find out at the https://www.vanguardinvestments.com.au/ website. Is there a way to invest in the equivalent of the Nasdaq? S&P500? in Australia??? What is their equivalent?

ShoulderThingThatGoesUp

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Re: Australian Case Study: Newbies to MMM - where to start?
« Reply #10 on: April 13, 2015, 06:54:04 AM »
- Commonwealth Bank (CBA)
- Westpac (WBC)
- ANZ Bank (ANZ)
- Telstra (TLS)
- Woolworths (WOW)
- Wesfarmers (WES)
- AMP (AMP)
- Insurance Australia Group (IAG)
- Medibank Private (MPL)

Are there not index funds in Australia that will basically buy into the total stock market at a very low "maintenance fee"? In the US everybody here recommends those because you're not tracking individual companies at all.

You didn't read my post ....  STW and VAS are the 2 main popular ones, though the fees are not as low as the US 0.05%

Yep, just saw a list of individual stocks and thought "wait a minute"

tinyfrankie

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Re: Australian Case Study: Newbies to MMM - where to start?
« Reply #11 on: April 13, 2015, 03:31:26 PM »
Thanks Marty998 this is extremely helpful! So glad I wrote. It motivates us to learn more.

Good I was on the right track with the offset. Probably another silly question but bear with me... what happens when you effectively have the offset account holding what you owe on the loan?

Regarding the stocks I think I'll do some reading now that you have given me some direction (before I would be questioning if what I was reading was relevant). I was aware that mining might not be the best option anymore so thanks for pointing that out as well.

If we were to get the house with offset, there wouldn't be much left over for stocks though. Would it be best to deal with the mortgage first or diversify by going in to the stock game as well? This would probably mean sacrificying some money out of the offset which I'm not sure is the best idea....

If the idea is to get enough passive income to support your lifestyle, then I assume stocks are a must unless we do down the real estate route further which scares me a bit after seeing how some tenants treat their rental near us. Although, I must admit the owners are partially to blame for repeating poor tenant choice.


tinyfrankie

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Re: Australian Case Study: Newbies to MMM - where to start?
« Reply #12 on: April 13, 2015, 03:34:58 PM »
Just an additional query - Is there a few sentence simple explanation of franking laying around anywhere?

marty998

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Re: Australian Case Study: Newbies to MMM - where to start?
« Reply #13 on: April 13, 2015, 04:02:12 PM »
Franking (dividend imputation) exists so as to stop double taxation of company profits.

Simple example:

If a company earns a profit before tax of $100, it will pay tax at 30% ($30 tax).

If the Company then pays out the net profit as a dividend to a shareholder (you), it will pay $70 cash dividend + $30 franking credit.

You declare $100 of income in your tax return and are taxed at your marginal rate e.g. if your marginal tax rate is 32.5%, you will owe $32.50 gross tax on the dividend.

The $30 franking credit is then used to offset your tax liability, so you only actually pay tax of $2.50.

Therefore you end up with $67.50 cash at the end of the day. If your tax rate is zero, you get the $30 back as a refund.

The whole point is that for companies owned by Australian shareholders, earnings eventually are taxed at individuals marginal tax rates.

marty998

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Re: Australian Case Study: Newbies to MMM - where to start?
« Reply #14 on: April 13, 2015, 04:06:30 PM »
Thanks Marty998 this is extremely helpful! So glad I wrote. It motivates us to learn more.

Good I was on the right track with the offset. Probably another silly question but bear with me... what happens when you effectively have the offset account holding what you owe on the loan? Nothing happens...you pay no interest if your loan is interest only

Regarding the stocks I think I'll do some reading now that you have given me some direction (before I would be questioning if what I was reading was relevant). I was aware that mining might not be the best option anymore so thanks for pointing that out as well.

If we were to get the house with offset, there wouldn't be much left over for stocks though. Would it be best to deal with the mortgage first or diversify by going in to the stock game as well? This would probably mean sacrificying some money out of the offset which I'm not sure is the best idea.... Comes down to personal preference. Mine was the mortgage. We all have to make our own choices on this one :)

If the idea is to get enough passive income to support your lifestyle, then I assume stocks are a must unless we do down the real estate route further which scares me a bit after seeing how some tenants treat their rental near us. Although, I must admit the owners are partially to blame for repeating poor tenant choice. Yes...Property is great for leveraged capital growth, not so much for income

vagon

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Re: Australian Case Study: Newbies to MMM - where to start?
« Reply #15 on: April 13, 2015, 08:20:49 PM »
Welcome!

Here's what I would do in your situation:

Figure out a goal
Have a chat about your ideal life and figure out how much it would cost to fund that life. Look at it again and ask yourself if whats "ideal" actually makes you happy, or if its just something you think would be cool and could probably do as a once of anyhow, like owning a Swiss ski chalet or Hawaiian beach house. Once you have that goal you can apply the 25 times rule that people use here to figure out how much you'll need to save. Track your remaining decisions against this target and dont forget to check in every now and then to see how your goals change.

Housing
Do not purchase specific house, aside from the facts the markets at records highs right now, you will be less diversified than if you spread your investment.
Given the likelihood of a fluctuating post, you wont get much utility out of the house, I would take advantage of military subsidised rent.

Expense
You should be reducing your expenses. Suggest you review your expenditure and post here for a couple of Aussie mustachians to review areas for reduction. You might also be able to get some travelling done on the military's dime if thats a major cost.

Investing
Get the money out of that ING account as soon as possible. You should be maximising your super by salary sacrificing as much as possible. When you hit your salary sacrifice cap, you should invest in a diversified, low fee fund. You've already found Vanguard and its one of the lowest going around, nothing in australia actually compares to the US's expense ratios.
People typically in your age group would look to get a large portion of there investments in stocks as opposed to property or bonds. You should make your mind up here, but if I was looking to invest in property it wouldnt be in a single house, it would be in a REIT. You might want to consider getting leverage (i.e. a loan) to take advantage of the historically low interest rates, but you'll have to consider how it impacts your finances/cash flow.

Happy to get into more detail as you continue to post. Well done on finding the site!

deborah

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Re: Australian Case Study: Newbies to MMM - where to start?
« Reply #16 on: April 13, 2015, 08:59:51 PM »
The military have a number of lurks and perks around housing. I assume you would be renting a Defence house? You may want to check what the perks are and work out what to do with them to make them work for you.

tinyfrankie

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Re: Australian Case Study: Newbies to MMM - where to start?
« Reply #17 on: April 14, 2015, 03:45:02 AM »
Wow thanks everyone for such informative replies. Each time I read the thread I feel grateful for stumbling across MMM on the weekend.

Thank you Marty998 for the run down on franking - that was most helpful and easy to understand!


If the idea is to get enough passive income to support your lifestyle, then I assume stocks are a must unless we do down the real estate route further which scares me a bit after seeing how some tenants treat their rental near us. Although, I must admit the owners are partially to blame for repeating poor tenant choice. Yes...Property is great for leveraged capital growth, not so much for income

I think this is something we need to sit down and consider and work out a goal / strategy as passive income is the goal I assume in order to retire early whether it be from rental income, stocks or a mix of both.

Welcome!

Here's what I would do in your situation:

Figure out a goal
Have a chat about your ideal life and figure out how much it would cost to fund that life. Look at it again and ask yourself if whats "ideal" actually makes you happy, or if its just something you think would be cool and could probably do as a once of anyhow, like owning a Swiss ski chalet or Hawaiian beach house. Once you have that goal you can apply the 25 times rule that people use here to figure out how much you'll need to save. Track your remaining decisions against this target and dont forget to check in every now and then to see how your goals change. I think this is definitely something that needs to happen before we make a move! Thanks :)

Housing
Do not purchase specific house, aside from the facts the markets at records highs right now, you will be less diversified than if you spread your investment.
Given the likelihood of a fluctuating post, you wont get much utility out of the house, I would take advantage of military subsidised rent. Interesting - the market is fairly ridiculous especially where we are. Yes, we do receive subsidised rent which is handy.

Expense
You should be reducing your expenses. Suggest you review your expenditure and post here for a couple of Aussie mustachians to review areas for reduction. You might also be able to get some travelling done on the military's dime if thats a major cost. Noted and will be looking at our expense figure a bit more closely this weekend. The original figure of $50,000 is likely to be slightly inflated in my hast to make a post after excitedly reading MMM. It does include travel which we may not spend as much on each and every year. Although we still would like to do a bit before kids etc.

Investing
Get the money out of that ING account as soon as possible. You should be maximising your super by salary sacrificing as much as possible. When you hit your salary sacrifice cap, you should invest in a diversified, low fee fund. You've already found Vanguard and its one of the lowest going around, nothing in australia actually compares to the US's expense ratios.
People typically in your age group would look to get a large portion of there investments in stocks as opposed to property or bonds. You should make your mind up here, but if I was looking to invest in property it wouldnt be in a single house, it would be in a REIT. You might want to consider getting leverage (i.e. a loan) to take advantage of the historically low interest rates, but you'll have to consider how it impacts your finances/cash flow. Had a brief look at REIT will read about that as well (my list is getting long).

In regards to super my understanding of military super needs some work however, my partner briefly explained that if you hit your salary sacrifice cap early by making large contributions yourself then the military will stop putting in their share. This also may need some further reading.

Interestingly that you say people our age look to get in to stocks. I personally feel like there is a lot of pressure at our age to make the first property purchase. Maybe that's because you never hear about the (smart?) ones investing in stocks instead / as well.


Happy to get into more detail as you continue to post. Well done on finding the site! Thanks! We appreciate all the help. I must say knowing what we spend and that we can still cut some it makes me cringe at what others our age are doing.

The military have a number of lurks and perks around housing. I assume you would be renting a Defence house? You may want to check what the perks are and work out what to do with them to make them work for you. Thanks deborah, We are currently in a private rental as Defence houses are hard to come by close to my work and a reasonable distance from my partner's. We do get rental assistance though. We are aware of the perks surrounding housing in Defence however, as we don't want to buy here (the market is through the roof) we would forgo those perks unless we were to post somewhere else and buy in that location.

Once again thanks everyone! (Worked out the quote / colour thing too - handy!)




JLR

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Re: Australian Case Study: Newbies to MMM - where to start?
« Reply #18 on: April 14, 2015, 04:24:47 PM »
$400 a week for rent sounds like a lot for the two of you if you are getting some sort of deal through Defence. Do your figures include that?

I have an account through ANZ called E*Trade. I'm planning on putting some money into an index fund via that.

We, also, have some money in an ING Maximiser. We are looking at buying our next house at some point (currently renting). Our plan is to do what was mentioned above - 20% deposit, and the rest in an offset.

tinyfrankie

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Re: Australian Case Study: Newbies to MMM - where to start?
« Reply #19 on: April 14, 2015, 07:16:04 PM »
$400 a week for rent sounds like a lot for the two of you if you are getting some sort of deal through Defence. Do your figures include that?

My partner gets rental assistance paid in to his pay so that is included as part of his gross income. Rent does take up a huge proportion of our expenses ($20,800) annually.

I have an account through ANZ called E*Trade. I'm planning on putting some money into an index fund via that.

We, also, have some money in an ING Maximiser. We are looking at buying our next house at some point (currently renting). Our plan is to do what was mentioned above - 20% deposit, and the rest in an offset.

I'll add looking at the ANZ account on my to do list (it is getting quite long now after all the helpful information).

I like the idea of the house but we need to figure out if that is best for us longterm considering if all our money is in offset how do we create passive income without also investing in stocks.

I was reading a few of the other posts on the forum last night and saw that it has been a long discussion as to whether buying the dream house and paying it off is the best option vs. investing in stocks. I think someone said somewhere that those investing in stocks tend to come off better. Any thoughts?

deborah

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Re: Australian Case Study: Newbies to MMM - where to start?
« Reply #20 on: April 14, 2015, 09:52:51 PM »
Check out the deal about buying a house when you are in (or maybe it is leaving) Defence.

vagon

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Re: Australian Case Study: Newbies to MMM - where to start?
« Reply #21 on: April 14, 2015, 11:02:15 PM »
I have an account through ANZ called E*Trade. I'm planning on putting some money into an index fund via that.

I'm a fan of dollar cost averaging (DCA), as any other strategy essentially involves you trying to time the market. The problem with using etrade or any other broker for that matter is that the brokerage fees generally make DCA unfeasible unless you have a regular, large amount of money to invest. Buying directly into one of Vanguards low fee index fund enables regular payments (as low as $100) without brokerage fees. Vanguard does have a spread, but you'll find the ETFs have a spread anyway so you can ignore that. Instead you want to compare whether the 0.75% Vanguard charges is more or less than the amount of brokerage your discount broker would charge.


I was reading a few of the other posts on the forum last night and saw that it has been a long discussion as to whether buying the dream house and paying it off is the best option vs. investing in stocks. I think someone said somewhere that those investing in stocks tend to come off better. Any thoughts?

Over the long term the stock market has historically performed better than the housing market. Why not get exposure to both? Vanguard (no I dont work for them) has several low cost funds that combine local shares, international shares, property and bonds. They charge about 0.9% for the first $50,000 invested and then it gets cheaper from there.


EDIT: In the interest of balance here are some positives for home ownership:
-Utility, you get to live in it and cant be kicked out if your landlord decides to sell.
-Cheaper leverage, loans are at all time lows and the lowest rates and highest LVRs are in home loans.
-Principle places of residence (i.e. the house you live in) have a capital gains tax advantage over shares.

Even with the above considered I would still take advantage of defense rental subsidies and go in a low cost index fund.
« Last Edit: April 14, 2015, 11:23:47 PM by vagon »

Dodge

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Re: Australian Case Study: Newbies to MMM - where to start?
« Reply #22 on: April 15, 2015, 12:43:21 AM »
I recommend reading through this thread in the Investor Alley forum on the differences between Australia and USA investing:

http://forum.mrmoneymustache.com/investor-alley/australiausa-mustachian-philosophy-differences/

Long story short, I believe investing in Australian Real Estate is one of the worst ideas ever. I argue for a global stock/bond portfolio. Especially when you wouldn't move into the house for many years. I've read many horror stories about "retirement homes" bought ahead of time. In one case the neighborhood took a turn for the worse after 10 years. In another case, they no longer wanted to live in that part of the country, and we're stuck taking a massive loss on selling the home. Not fun.

If you don't know where you'll be in a few years time, the last thing you'll want to deal with is a rental home many thousands of miles away...especially when you're still new to owning rentals.

I'd think long and hard before I took such a big move, locking myself into something the current-me wants, with the hope that future-me in 10 years would still want it.  Best case scenario, you end up putting a ton of money into an asset that on average only grows with inflation, forgoing the 9-11% average gains from the stock market. Unless your heart is set on it, and you understand it's an emotional play, I'd stay away from real estate in your situation.

vagon

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Re: Australian Case Study: Newbies to MMM - where to start?
« Reply #23 on: April 15, 2015, 01:05:13 AM »
I recommend reading through this thread in the Investor Alley forum on the differences between Australia and USA investing:

http://forum.mrmoneymustache.com/investor-alley/australiausa-mustachian-philosophy-differences/

Long story short, I believe investing in Australian Real Estate is one of the worst ideas ever. I argue for a global stock/bond portfolio. Especially when you wouldn't move into the house for many years. I've read many horror stories about "retirement homes" bought ahead of time. In one case the neighborhood took a turn for the worse after 10 years. In another case, they no longer wanted to live in that part of the country, and we're stuck taking a massive loss on selling the home. Not fun.

If you don't know where you'll be in a few years time, the last thing you'll want to deal with is a rental home many thousands of miles away...especially when you're still new to owning rentals.

I'd think long and hard before I took such a big move, locking myself into something the current-me wants, with the hope that future-me in 10 years would still want it.  Best case scenario, you end up putting a ton of money into an asset that on average only grows with inflation, forgoing the 9-11% average gains from the stock market. Unless your heart is set on it, and you understand it's an emotional play, I'd stay away from real estate in your situation.

While I agree with your take in general, can you clarify that you mean specific real estate as opposed to say have REITs (or other property trust equivilants) in your portfolio?
Or do you feel the current market is prohibitive for property investment in general?

tinyfrankie

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Re: Australian Case Study: Newbies to MMM - where to start?
« Reply #24 on: April 15, 2015, 01:54:31 AM »
Thanks everyone,

deborah - My partner is about to give me the complete run down on the Defence schemes available so I'll post more about that later.

Some other interesting points to consider from vagon and Dodge - thanks guys!

The difference between here and Australia is exactly what I need so I'll be getting into that at some stage (weeks fairly busy will be reading a lot this weekend). Stay tuned for questions.

Dodge - I like how you talk about what the future-us would want. It is definitely something to consider. I think we need to understand the stock market better so we have a balanced overview of our options. That is probably my first thing to do.

Is 9-11% average gains common?

Can anyone explain what happened with the crash? I thought I read something by MMM that said in general stocks like Vanguard returned to their original price? Was this the case in Australia? Sorry if some of these answers are in the link you suggested Dodge.

In terms of REITs is that as though you own Real Estate but it is treated like a stock without all the hard work of owning Real Estate? Are the average gains here less than usual stocks?

And (sorry I literally am super new to all of this) where the heck do bonds come in? I know nothing....

I should give myself a break and try not to get overwhelmed by all there is to learn... I guess the good thing is I'm trying to learn and not wasting my money away!

:)







marty998

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Re: Australian Case Study: Newbies to MMM - where to start?
« Reply #25 on: April 15, 2015, 02:29:44 AM »
I recommend reading through this thread in the Investor Alley forum on the differences between Australia and USA investing:

http://forum.mrmoneymustache.com/investor-alley/australiausa-mustachian-philosophy-differences/

Long story short, I believe investing in Australian Real Estate is one of the worst ideas ever. I argue for a global stock/bond portfolio. Especially when you wouldn't move into the house for many years. I've read many horror stories about "retirement homes" bought ahead of time. In one case the neighborhood took a turn for the worse after 10 years. In another case, they no longer wanted to live in that part of the country, and we're stuck taking a massive loss on selling the home. Not fun.

If you don't know where you'll be in a few years time, the last thing you'll want to deal with is a rental home many thousands of miles away...especially when you're still new to owning rentals.

I'd think long and hard before I took such a big move, locking myself into something the current-me wants, with the hope that future-me in 10 years would still want it.  Best case scenario, you end up putting a ton of money into an asset that on average only grows with inflation, forgoing the 9-11% average gains from the stock market. Unless your heart is set on it, and you understand it's an emotional play, I'd stay away from real estate in your situation.

While I agree with your take in general, can you clarify that you mean specific real estate as opposed to say have REITs (or other property trust equivilants) in your portfolio?
Or do you feel the current market is prohibitive for property investment in general?

Vagon...put it to you this way. You don't know the ins and out of any pocket of real estate in Dodge's home city in America any better than Dodge knows the ins and outs of Sydney realestate, or any other realestate market in Australia.

It's easy for anyone to compare house prices across countries and say "ooh look its so high in Aus, but in the US the same house would go for $45,000, therefore Australia must crash soon!" It's flawed logic.

Fundamentally, Australia and the US have different tax and investment philosophies which drive decisions to invest in asset classes. You shouldn't listen to them, just as I'm sure they don't listen to me when I tell them there's no such thing as a 1% rule and I'll happily take 0.39% and a cash loss of $2,000 in order to make a capital gain of $70k as I have this year.

Far better use of your time would be to apply your own research and knowledge, to be used for your own situation. It may well be that rentals are not appropriate for you. That is fine. It doesn't mean you throw out and disregard the entire asset class.

Dodge, take your point that you see things the way you do. Would respectfully suggest that it's too simplistic to make broad brush strokes and determinations on entire markets.

/end of 'had to get that of my chest' rant.

thankyou
Marty
« Last Edit: April 15, 2015, 02:32:30 AM by marty998 »

tinyfrankie

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Re: Australian Case Study: Newbies to MMM - where to start?
« Reply #26 on: April 15, 2015, 02:41:15 AM »
Thanks Marty998,

I'll be sure to take a closer look at which perspective people are posting from Australian, American, Other. The forum link Dodge suggested for Australian investing looks useful for learning the difference in philosophies and why.

Then as you said... once researched apply to my own situation here in Australia.

Rant appreciated :)

(Although you lost me on the 1% rule but perhaps one day I'll get to that!)

marty998

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Re: Australian Case Study: Newbies to MMM - where to start?
« Reply #27 on: April 15, 2015, 03:35:33 AM »
It's a rule where you don't invest in anything that doesn't pay rent per month of 1% of the value of the property.

So on a $500,000 residence, you need someone to be paying $5,000 per month rent for it to be considered a worthwhile investment.

It works in the US where you can get houses for under $150k. The rule has its place over there, and I don't necessarily disagree with people who swear by it. But I take issue when you try and apply it here where there's quite obviously different economics at play and using it would suggest nobody should ever buy a property in Australia.

tinyfrankie

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Re: Australian Case Study: Newbies to MMM - where to start?
« Reply #28 on: April 15, 2015, 04:25:09 AM »
Thanks marty998 for the run down. I definitely don't see the 1% rule applying to any property we've ever looked at in Australia. Good to know the differences.

Obviously as I've said I have a lot to learn. :)


Rob_S

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Re: Australian Case Study: Newbies to MMM - where to start?
« Reply #29 on: April 15, 2015, 04:31:03 AM »
I can't say I buy into the salary sacrifice to the concessional cap argument. Given your age your locking away a lot of money for 35+ years. Far better to commit those funds outside of super to win your financial independence. Lets say you work 10 years before hitting FI, that's 10 years of about 9.5% forced savings in Super on top of what you have now. That forced savings alone will snowball into a nice compounded bonus for when you hit 60 years of age, as long as you have it in a low cost super fund with an aggressive strategy.

I understand a salary sacrifice strategy if your 40+ but not if you're in your early 20's.

tinyfrankie

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Re: Australian Case Study: Newbies to MMM - where to start?
« Reply #30 on: April 15, 2015, 04:44:32 AM »
Thanks Rob S,

Your view mimics my partners. He believes at our age we should be investing our money elsewhere and making it work for us as you can't access it any earlier if it is in super.

A friend of his who is younger again was paying extra into super yet was saving barely anything and had a car loan as well. My partner kindly advised to redirect that money and get rid of the car loan ASAP. Now he has no car loan and his savings are growing for future investment. 


Gockie

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Re: Australian Case Study: Newbies to MMM - where to start?
« Reply #31 on: April 15, 2015, 04:48:19 AM »
Hi tinyfrankie,
I invest in realestate. I recommend it as it's something you can control, can do improvements to to increase its value and return (you can't do that with shares!) and for land - they aren't making any more of it. Plus there's a good sleep at night factor. Many people are buying properties to have as investments. I'd recommend buying in a large and growing capital city (Sunshine Coast may be ok - they may start to bring in the granny flat rule, which means for investing purposes, buy a house with good land)
If you want to learn much more about realestate check out the somersoft forum.

I can recommend shares in solid companies... I'll say banking sector. Good yields and growth.
If you're in Sydney I'd be happy to catch up for a coffee to chat about investing in property and the MMM philosophy - this invite is for you too Marty998 and anybody else in Sydney.

tinyfrankie

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Re: Australian Case Study: Newbies to MMM - where to start?
« Reply #32 on: April 15, 2015, 05:08:07 AM »
Hi Gockie,

Thanks I'll check out the somersoft forum. When you say you invest in property do you mean with the intention to never pay a property (except maybe your own) off and use the equity to keep getting more and more to establish passive income from the rent?

Just told my partner about the potential catch up and he's interested. Especially since you threw in the word 'Coffee' one of our weaknesses.

The MMM philosophy chat would also be good. As I doubt until I understand the differences properly between here and the US, would I accurately be able to know when to apply what MMM says to my situation.
« Last Edit: April 15, 2015, 05:13:07 AM by tinyfrankie »

JLR

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Re: Australian Case Study: Newbies to MMM - where to start?
« Reply #33 on: April 15, 2015, 05:28:49 AM »
I have an account through ANZ called E*Trade. I'm planning on putting some money into an index fund via that.

 The problem with using etrade or any other broker for that matter is that the brokerage fees generally make DCA unfeasible unless you have a regular, large amount of money to invest. Buying directly into one of Vanguards low fee index fund enables regular payments (as low as $100) without brokerage fees.

Hope I haven't stuffed up on the quoting above. :)

Vagon, how do we buy Vanguard without "using ETrade or any other broker"?

Dodge

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Re: Australian Case Study: Newbies to MMM - where to start?
« Reply #34 on: April 15, 2015, 07:17:36 AM »

Vagon...put it to you this way. You don't know the ins and out of any pocket of real estate in Dodge's home city in America any better than Dodge knows the ins and outs of Sydney realestate, or any other realestate market in Australia.

It's easy for anyone to compare house prices across countries and say "ooh look its so high in Aus, but in the US the same house would go for $45,000, therefore Australia must crash soon!" It's flawed logic.

How presumptuous and oddly confident you are, to both assume to know my personal background, and assume to understand the thought process behind my recommendation.

Your argument would be much more persuasive if you avoid the ad hominem logical fallacy (a fallacy in which a claim or argument is dismissed on the basis of some irrelevant supposition about the author), and focused instead on the content of my claim.

Dodge

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Re: Australian Case Study: Newbies to MMM - where to start?
« Reply #35 on: April 15, 2015, 07:32:42 AM »
Thanks everyone,

deborah - My partner is about to give me the complete run down on the Defence schemes available so I'll post more about that later.

Some other interesting points to consider from vagon and Dodge - thanks guys!

The difference between here and Australia is exactly what I need so I'll be getting into that at some stage (weeks fairly busy will be reading a lot this weekend). Stay tuned for questions.

Dodge - I like how you talk about what the future-us would want. It is definitely something to consider. I think we need to understand the stock market better so we have a balanced overview of our options. That is probably my first thing to do.

Is 9-11% average gains common?

Can anyone explain what happened with the crash? I thought I read something by MMM that said in general stocks like Vanguard returned to their original price? Was this the case in Australia? Sorry if some of these answers are in the link you suggested Dodge.

In terms of REITs is that as though you own Real Estate but it is treated like a stock without all the hard work of owning Real Estate? Are the average gains here less than usual stocks?

And (sorry I literally am super new to all of this) where the heck do bonds come in? I know nothing....

I should give myself a break and try not to get overwhelmed by all there is to learn... I guess the good thing is I'm trying to learn and not wasting my money away!

:)

You're getting lots of bad advice in this thread.  To learn more about stocks, bonds, and investing, I'd start by dedicating about 30 minutes to watching this short video series:

http://www.bogleheads.org/wiki/Video:Bogleheads®_investment_philosophy

Yes the guy is over-the-top silly, but the information is gold, he explains it in a way that anyone can understand, and it's definitely applicable to Australia.  I'd strongly recommend against putting 100% of your stock/bonds investments into the Australian economy, I review the logic behind that in the thread I linked to earlier.

Dodge

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Re: Australian Case Study: Newbies to MMM - where to start?
« Reply #36 on: April 15, 2015, 09:10:55 AM »
Here is a breakdown of where my partner and I are currently at:

Just us two - no kids yet, aged 25 & 26.
After tax income: Me - $55822, Partner - $58708
Expenses are currently $50,000

As my partner is currently in the military we won't know where we will be living in Australia in the next year or two so we aren't too sure about real estate currently.

I'll try to give a more targeted recommendation.  You're in an amazing situation here!

Total income: $114,530
Expenses: $50,000

Savings Rate: 56%
Amount added each year to savings: $64,530
Monthly savings: $5,377.5

From the year you were born until today, the world stock market has grown 8.12% each year.  This includes two major crashes, where stock prices were cut in half:



Note, the United States is half of the world's stock market, so 50/50 USA/International is considered a world portfolio.  For you to mimic this, you would need 2/98 Australia/International (the Australian market is 2% of the world's market).

So let's take this 8.12% and see what would have happened if your parents saved $5,377.50 a month, from the year you were born, until today:



Final balance: $6,875,510.33

Of course, 26 years is a LONG time, and you'd prefer to not have to work that long, why else would you be on this site :-P  With expenses of $50,000, you'd only need to save up $1,250,000.  Once you've saved up this amount, you can live off your investments.  You can literally schedule an automatic monthly withdraw from your portfolio that equals $50,000 a year, and treat it as your paycheck.  This is what MrMoneyMustache means when he says to make your money work FOR you, instead of you working for your money.

So how long will it take to save up this much money, if you continue to save just as much, and continue to get 8.12% returns from the market?  11 years.

What if you can cut your expenses down to $40,000 a year?    Now it will take 9 years.

$30,000 a year expenses?  6.5 years

Again, you're in an AMAZING position!  The name of the game here should be mitigating your risk.  If you can mitigate your risk, you're almost guaranteed to be a millionaire in very short order.  In fact, it is almost a statistical certainty (assuming the future ends up being like the past) that you will end up even better than the forecasts above.  MrMoneyMustache has a fun article where he shows the best/worst historical investment returns over the last X amount of years, and 8.12% is on the low-end:



Source: http://www.mrmoneymustache.com/2011/06/06/dude-wheres-my-7-investment-return/

The last 26 years just happened to have 2 major crashes, so this is quite literally the historical worst case scenario.  Now for the meat of the conversation...how do you mitigate your risk?  Honestly, you're getting some bad advice in this thread.  You don't mitigate your risk by:

  • Leveraging - "Leverage is the only way a smart guy can go broke." ~Warren Buffet

    When you're already on the path to almost guaranteed millions, leverage is the last thing you want, and a mortgage is one of the most misunderstood forms of leverage.  I personally know people who lost millions this way.  I know others who say they "signed my life away to a mortgage", after prices dropped and they couldn't afford to leave.  Imagine being offered a significantly higher paying job in a city just two hours away, and being unable to take it, because you can't move.  This is a life-altering mistake.
  • Using leverage to buy any asset (a home in this case), subject to the fortunes of one country, one state, one city, one town…No! One neighborhood! Imagine if our investment could somehow tie its owner to the fate of one narrow location. The risk could be enormous! A plant closes. A street gang moves in. An environmental disaster happens nearby. We could have an investment that not only crushes it’s owner’s net worth, but does so even as they are losing their job and income! (quoted from Why your house is a terrible investment)
  • Purchasing individual stocks, or buying an active (non-index) fund - Any individual stock, can drop to 0.  You can lose everything.  Even worse, studies show you will underperform the index (the index is the combination of every stock available in the market).  So not only are you putting yourself at more risk, you're doing it for lower returns.  I personally know someone who lost over $10 million by picking the wrong active fund (a fund which had managers picking individual stocks).  Lost, as in it went down to $0.  Then there's the story of all the people who let Canarsie Capital manage their money a few months ago:

    "Owen Li, the founder of Canarsie Capital in New York, said Tuesday he had lost all but $200,000 of the firm's capital—down from the roughly $100 million it ran as of late March."

    Source: http://www.cnbc.com/id/102356275

    Is this really a game you want to play?
  • Not diversifying internationally - Australia's economy is very heavily weighted towards two sectors, two sectors which command 87% of Australia's economy.  68% of Australia's economy is its Services sector (mostly Finance), while 19% is its Mining sector.  The state of Texas has a bigger economy than all of Australia, I don't think anyone would consider themselves diversified if they only owned Texas stocks.  Does anyone think owning 100% stock, in a retirement portfolio, containing only two sectors, is diversified?  If so, more reading is required.  In short, don't put all your money in the Australian stock index.
  • Falling victim to Survivorship Bias - the single greatest fallacy in investing - Steer clear of all speculative behavior.  Many posts in this thread show a gross misunderstanding of the fundamentals of economics, and Survivorship Bias.  Expecting a commodity bubble to continue simply makes no sense.  The recency bias is evident.  We don't expect stocks and bonds to appreciate because of past returns, we expect them to appreciate, because of things like population growth, productivity, and production.  A house doesn't do any of that.  It does not grow and multiply.  It cannot compound on itself.  Here's the long term Australian housing price chart:



    Let's break-down the years pre-2000:



    I'd caution not to ignore the black line.  This represents at least 80 years where the value of your home would be steadily declining.  Definitely not where you'd want the majority of your net worth to be.

    Now let's look at the green line.  Had you bought in 1950, and held 50 years, you would have seen less than a 1% real return yearly on the value of your home.  Had you bought in 1953, it'd be about a 1.5% real yearly return.  During this span of 50 years, the first two decades would have seen a large drop, then a break even.  0 appreciation.  Starting in 1970, you would have seen 0 appreciation for 18 years.  Starting in 1988, you would have seen 0 appreciation for 10 years.

    This is what we expect from a commodity.  It's easy to fall victim to the Survivorship Bias.  After any process that leaves behind survivors, the non-survivors are often destroyed or muted or removed from your view.  The people who lost money on their homes, certainly aren't broadcasting it to all their friends.  If failures becomes invisible, then naturally you will pay more attention to successes. Not only do you fail to recognize that what is missing might have held important information, you fail to recognize that there is missing information at all.  The only reason anyone here is mentioning housing at all, is because of this part of the graph:



    This is speculation, not investing.

I suspect this will all become clear after a day or two of reading.  Again, you're in an incredible position right now, your focus should be on mitigating risk, and not making any big mistakes.  Let us know if you have any questions! :)

tinyfrankie

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Re: Australian Case Study: Newbies to MMM - where to start?
« Reply #37 on: April 15, 2015, 02:23:59 PM »
Wow Dodge what a post to digest while eating my breakfast!

Firstly, thank you! I really appreciate the effort you have placed into those posts. I do like a good graph!

I believe this forum is extremely useful in that I already have a huge leap in my understanding from these last few days. I like how it provides such varied opinions as if anyone advises anything I will spend the time to understand that comment as best I can myself and hopefully make my own judgement and ask appropriate questions to figure out my concerns.

No one needs to worry as to whether we are being provided with good or bad advice as we won't be making any decisions on where to invest our money in the near future with my understanding at such a low level. However, we definitely appreciate the lively debate and it pointed out if you personally think the advice is good / bad or you agree / disagree as that will keep me questioning and researching rather than taking everything said as gospel.

I do feel like I need some time to read which the week is not really providing me much of (which is extremely frustrating me!). It is actually ironic that work is the thing consuming me and preventing me from reading about how to become FI. It's a trap people!

But - I will make that time and I hope then to respond with a bit more intelligent questions.

I feel if I am not taking the time to post that the forum will dry up you'll all run away thinking that was a waste of time. So if I don't post as regularly it is because I'm trying to figure out what the heck you smarty pants people are all talking about so I can ask a half decent question.

I will be here reading though and taking it all in if others would like to respond to Dodge and keep up the conversation. If you keep posting it will help to keep me accountable.

Cheers,

A motivated tinyfrankie :)




 



vagon

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Re: Australian Case Study: Newbies to MMM - where to start?
« Reply #38 on: April 15, 2015, 05:56:10 PM »
Vagon...put it to you this way. You don't know the ins and out of any pocket of real estate in Dodge's home city in America any better than Dodge knows the ins and outs of Sydney realestate, or any other realestate market in Australia.

Appreciate your perspective here Marty, but I am not taking Dodge's view - I am agreeing with his underlying investment philosophy. No matter what he says I believe property has a place in a portfolio as it diversifies your investments. I simply dont believe that putting so much of your money (also leveraged!) into one property at record highs is a wise investment choice.

Vagon, how do we buy Vanguard without "using ETrade or any other broker"?

Check out: https://www.vanguardinvestments.com.au/retail/ret/investments/managed-funds-retail.jsp#fundstab
You buy directly from Vanguard with a minimum $5000 up front, then you can use BPay to invest regularly and take advantage of DCA. Minimum additional (but not mandatory) investments are $100. So for example you could start with $5000 and add $100 a week to DCA and grow your investment by $5200 a year, plus compounding returns and dividend reinvestment. As you earn more money or get a tax return you 

I can't say I buy into the salary sacrifice to the concessional cap argument. Given your age your locking away a lot of money for 35+ years. Far better to commit those funds outside of super to win your financial independence.

I agree Rob. It has been on my mind that there must be an optimal mix though. because at some stage you will tap super and at that stage it would have made sense to invest there and take advantage of favourable taxation.

If you're in Sydney I'd be happy to catch up for a coffee to chat about investing in property and the MMM philosophy - this invite is for you too Marty998 and anybody else in Sydney.

I'd be keen, let me know!
« Last Edit: April 15, 2015, 06:38:43 PM by vagon »

Flyingkea

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Re: Australian Case Study: Newbies to MMM - where to start?
« Reply #39 on: April 15, 2015, 08:58:22 PM »
I have an account through ANZ called E*Trade. I'm planning on putting some money into an index fund via that.

 The problem with using etrade or any other broker for that matter is that the brokerage fees generally make DCA unfeasible unless you have a regular, large amount of money to invest. Buying directly into one of Vanguards low fee index fund enables regular payments (as low as $100) without brokerage fees.

Hope I haven't stuffed up on the quoting above. :)

Vagon, how do we buy Vanguard without "using ETrade or any other broker"?
You can deal direct with Vanguard, that's what I did. Just go to their website, print out the forms, and send them in. They had it processed with a few days of my posting it, and less than a week later I had a follow up phonecall from their people to see if I had further enquiries, welcome me aboard, and ask how I found out about them. I've just started with them, have 10k in international shares. (Currently an adelaidan here btw)

Gockie

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Re: Australian Case Study: Newbies to MMM - where to start?
« Reply #40 on: April 16, 2015, 07:12:29 AM »
Hi Everybody!
Well, I'd love to catch up. So let me say, I work in Parramatta, live in Epping region. Happy to meetup say in Parramatta, West Ryde, Eastwood, Epping or some place in Strathfield if that's doable?

Re: Coffee, i'm going to say it upfront so I don't disappoint... I don't actually drink it myself.... I love the smell but i'm not too great with caffeine. And to be perfectly honest if I ever go out for a meal I very rarely ever buy drinks of any sort. I'd just usually drink tap water with a meal, or tea at work. Here's a money saving trick... if you are at a pub, ask for tap water with lemon or lime at a pub. ;)

Btw, Pubs or RSL clubs also ok for a catchup.
For meeting up, Thursday evenings work for me in general.

Re: Realestate, that's where my money is. And its done really well for me over the past 10 years. I can tell you my journey in a meetup.
It boom and flatlines.... I just wish I was able to buy more earlier. My bottom line: it is very possible to be wealthy with realestate.
Cheers,
Linda

Johnners

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Re: Australian Case Study: Newbies to MMM - where to start?
« Reply #41 on: April 16, 2015, 04:27:06 PM »
Hi Tinyfrankie,

Thanks for starting the thread, as ever there are greats points being discussed here. Also great to get a Sydney perspective. I’m relatively new to this as well so I don’t think I can give you mush advice, Marty and co. have that covered anyway!  But one or two tips would be;

Don’t be afraid to start investing, even by starting small you are still learning. I got too hung up on trying to read every book and absorb every bit of information out there before I would start.

Keep it simple

marty998

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Re: Australian Case Study: Newbies to MMM - where to start?
« Reply #42 on: April 16, 2015, 05:19:51 PM »
Hi Everybody!
Well, I'd love to catch up. So let me say, I work in Parramatta, live in Epping region. Happy to meetup say in Parramatta, West Ryde, Eastwood, Epping or some place in Strathfield if that's doable?

Re: Coffee, i'm going to say it upfront so I don't disappoint... I don't actually drink it myself.... I love the smell but i'm not too great with caffeine. And to be perfectly honest if I ever go out for a meal I very rarely ever buy drinks of any sort. I'd just usually drink tap water with a meal, or tea at work. Here's a money saving trick... if you are at a pub, ask for tap water with lemon or lime at a pub. ;)

Btw, Pubs or RSL clubs also ok for a catchup.
For meeting up, Thursday evenings work for me in general.

Re: Realestate, that's where my money is. And its done really well for me over the past 10 years. I can tell you my journey in a meetup.
It boom and flatlines.... I just wish I was able to buy more earlier. My bottom line: it is very possible to be wealthy with realestate.
Cheers,
Linda

I could do Parramatta sometime (Albion Hotel perhaps?) Can't say I'm much of a coffee drinker either.


vagon

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Re: Australian Case Study: Newbies to MMM - where to start?
« Reply #43 on: April 16, 2015, 06:42:47 PM »
I dont drink coffee either (I guess we should have predicted this!) and I'm sorry to say I'm based in the city and live in Willoughby so I'll probably have to bow out of a catch up in Parra.

Gockie

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Re: Australian Case Study: Newbies to MMM - where to start?
« Reply #44 on: April 17, 2015, 03:10:17 AM »
Thanks guys and sorry vagon.... Marty998 Albion is cool, close to my work. Can we try for next Thursday night? If you say yes I'll post something in the meet ups section. :)

marty998

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Re: Australian Case Study: Newbies to MMM - where to start?
« Reply #45 on: April 17, 2015, 03:13:34 AM »
Sorry Gockie I'll be working in the city next Thursday and Friday...

Maybe the week after?

tinyfrankie

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Re: Australian Case Study: Newbies to MMM - where to start?
« Reply #46 on: April 17, 2015, 03:21:39 AM »
Hey everyone,

Don't think we'll make it to the meet up. As we are in Newcastle it is a bit of a drive for us.

At this stage happy to keep reading and commenting on here to see what others think :)

We would be interested in hearing about your meetup though if it happens!

tinyfrankie

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Re: Australian Case Study: Newbies to MMM - where to start?
« Reply #47 on: April 17, 2015, 03:25:50 AM »
Hi Tinyfrankie,

Thanks for starting the thread, as ever there are greats points being discussed here. Also great to get a Sydney perspective. I’m relatively new to this as well so I don’t think I can give you mush advice, Marty and co. have that covered anyway!  But one or two tips would be;

Don’t be afraid to start investing, even by starting small you are still learning. I got too hung up on trying to read every book and absorb every bit of information out there before I would start.

Keep it simple

Hey Johnners,

Thanks for the heads up! I could definitely fall into that trap so I will keep it in mind :)

Gockie

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Re: Australian Case Study: Newbies to MMM - where to start?
« Reply #48 on: April 17, 2015, 04:04:50 AM »
Hi tinyfrankie,
I'll be up in Newcastle on May 9-10 if you want a catchup?
Marty998, I'll put something up in the meet ups section now. Thursday 30th April at the Albion Parramatta!

Johnners

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Re: Australian Case Study: Newbies to MMM - where to start?
« Reply #49 on: April 17, 2015, 04:19:59 AM »
Tinyfrankie,

My motivation for FIRE stems from the desire to move back to Newcastle! My wife and I had to move to Sydney for work, hope to be able to move back in the not too distant future. We are regularly up there visiting family so can always catch up?

Gockie,

I'm just around the corner from Parramatta, and can make it on the 30th if the meet up is on.