Aussie financial independence plan

[pistolpete]

Hi guys, first post on the site after reading many many threads and posts and articles and am thankful for reading all the knowledgeable replies on these message boards.

Im 32 earning around 100k pre tax
partner earns around 30 -40k pretax

No personal debt
No mortgage and own house of residence worth 350k
Since mortgage is paid off have been salary sacrificing 5.88% pretax with 5% company match.

I have around 65k cash,
super of around 70k
non super portfolio of around 40k

this consists of around 12k in vanguard int share fund, argo investments, telstra among a couple others.

im trying to build up my super balance to fund retirement from 65 to 85 given the lower tax environment and years to compound my returns.
however i am trying to build up my non super portfolio to have enough funds to retire at age 50 so these funds can satisfy my lifestyle from age 50 to 65 or 70 depending when and how the government will change the goal posts for accessing super!

I hope to reach 100k in the vanguard int fund and then close it and open in a wholesale account with lower fees similar to etf ratio's within the next 3 to 5 years.
I see alot of posts about etf's however as i already hold argo wondering if getting into a couple micro cap, and mid cap's alongside argo would be beneficial instead of holding all the market with vas.

im thinking BKI, mirrabooka, cadence etc etc.

also our living expenses come to around 15 to 20k per year so plenty of opportunities to save and invest for the next 5 years before we contemplate starting a family.

sorry for the long post guys! any hints or tips would be greatly appreciated!

[JLR]

I just wanted to welcome you to the forums. I'm sure some knowledgeable people will be along soon with some advice. There's a good number of Aussies around these parts. :)

[FFA]

hi pistolpete, looks like you have it well sussed. for the vanguard international fund, certainly i'd consider etf's if you can do 2-3k parcels or bigger. But since you're already in the retail fund and will switch to wholesale eventually, at least those higher management costs will not be forever. I'm not a huge LIC fan, ARG and AFI are great but I don't like the 5-10% NTA premiums recently. I use VAS and recently started using MVW to supplement it which has been doing well in recent months. Their method is equal weights instead of market cap, so it gives much less concentration in the large caps. Mid and small cap LIC's is another way which I never really looked much into. Whatever you invest in just make sure it's liquid, i.e. reasonable volumes trade each day and the bid/ask spread is not too wide. Anyway just a few suggestions for you to think about, but as I said you seem to be on a good path already.

[urbanista]

Wow, 5% employer match into super, which industry are you in?

Also, congrats on super low living expenses. Very impressive. Do you own a car at all?

[FFA]

MVS is another you might want to look into for a small/mid cap etf. I don't have it myself but considering to add since MVW has worked out well.

[BattlaP]

Wow, 5% employer match into super, which industry are you in?

yeah, holy shit, I've never heard of any employer in Australia doing anything except trying to dodge as much responsibility for super as possible

[pistolpete]

thanks for the replies ppl's, really appreciate it.

I work in the mining industry and yes i do own a car however i car pool to work which really reduces wear and tear on my vehicle!

will definately look into the micro and mid caps mentioned.

Just curious as to why the huge popularity for VAS etf?!

if i buy 3 to 4k parcels in vas every 3months for the next 10 years would that be such a bad decision given i want to build a passive income with distributions and capital growth for me in my 50's?!?

again cheers for the feedback, keep them coming, however im replying on my smartphone so cant highlight text and quote selection!

[stashgrower]

car pool helps!!

VAS - Vanguard fees are relatively low, the ETF MERs are lower than for the retail fund (but hear you are talking about moving to the wholesale fund, which is lower than retail but higher than ETFs). Downside is brokerage. And Mustachians like index funds for reasons you can find in many other posts.

[FFA]

vanguard and mustachianism are like a match made in heaven... I reckon when MMM was dreaming all this up, once he found the bogleheads he must've thought "well that's the investing part done, now I can just focus on saving rate". Most people around here subscribe to the boglehead's investment philosophy, you can google it's worth a read if you haven't already. jack Bogle is the founder of vanguard and the granddaddy of index investing.

STW and IOZ are ASX200 tracker substitutes which are equally valid options. VAS tracks the ASX300 (100 more shares but not actually that much different). VAS has slightly lower management costs. STW probably has the best liquidity, although VAS is quite good these days.

VAS yields around 4.5% which is 80% franked. I don't think it would be a bad decision, especially if you supplement it with the international shares and some exposure to small/mid caps in the ASX.

[pistolpete]

cheers for that, yes im slightly leaning towards vas then adding to it religiously every quarter with 3 to 4k parcels.

in addition i would continue to dollar cost average via bpay into the vanguard retail fund and may allocate a small amount to a spec share.

what sort of balances are you ppl seeking in terms of super balances as well as non super portfolios?!

just curious!