Author Topic: Australian Investing Thread  (Read 2108115 times)

Andy R

  • Bristles
  • ***
  • Posts: 336
Re: Australian Investing Thread
« Reply #5000 on: July 15, 2020, 04:39:02 AM »
Andy R, can you expand a bit on your reservations?  I don’t 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 can’t 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

  • 5 O'Clock Shadow
  • *
  • Posts: 13
Re: Australian Investing Thread
« Reply #5001 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 year’s expenses in cash so the defined benefit would only be one portion of our “safe assets”. 

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.  I’m 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

  • Bristles
  • ***
  • Posts: 318
  • Location: Australia
Re: Australian Investing Thread
« Reply #5002 on: July 27, 2020, 03:28:07 PM »
Yeah... Divs are getting slaughtered... I’m 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

  • 5 O'Clock Shadow
  • *
  • Posts: 26
  • Location: Queensland
Re: Australian Investing Thread
« Reply #5003 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

  • 5 O'Clock Shadow
  • *
  • Posts: 15
Re: Australian Investing Thread
« Reply #5004 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

  • Magnum Stache
  • ******
  • Posts: 4637
  • Location: Downunder
Re: Australian Investing Thread
« Reply #5005 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

  • Bristles
  • ***
  • Posts: 336
Re: Australian Investing Thread
« Reply #5006 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

  • Handlebar Stache
  • *****
  • Posts: 2088
Re: Australian Investing Thread
« Reply #5007 on: August 02, 2020, 03:59:08 AM »
I’ve got the High growth  Lifestrategy fund that is .29 after $100k If that helps.

turboslob

  • 5 O'Clock Shadow
  • *
  • Posts: 15
Re: Australian Investing Thread
« Reply #5008 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.

I’ve 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

  • Handlebar Stache
  • *****
  • Posts: 2088
Re: Australian Investing Thread
« Reply #5009 on: August 03, 2020, 02:06:28 AM »
I’m not sure actually. I guess it’s worth it to me because I don’t 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

  • 5 O'Clock Shadow
  • *
  • Posts: 98
  • Age: 31
  • Location: Australia
Re: Australian Investing Thread
« Reply #5010 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

  • 5 O'Clock Shadow
  • *
  • Posts: 13
Re: Australian Investing Thread
« Reply #5011 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

  • Handlebar Stache
  • *****
  • Posts: 2088
Re: Australian Investing Thread
« Reply #5012 on: August 08, 2020, 02:47:55 PM »
Hey, all you occupied owners with offset accounts, I’m wondering what’s 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 I’m assuming that most would keep their emergency money there, but how much more?

I’m trying to work out a strategy and here’s what I’m thinking. After I buy a place, I don’t 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 I’ve 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

  • Stubble
  • **
  • Posts: 182
Re: Australian Investing Thread
« Reply #5013 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

  • Handlebar Stache
  • *****
  • Posts: 2088
Re: Australian Investing Thread
« Reply #5014 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 doesn’t matter to you?

MrThatsDifferent

  • Handlebar Stache
  • *****
  • Posts: 2088
Re: Australian Investing Thread
« Reply #5015 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

  • Stubble
  • **
  • Posts: 182
Re: Australian Investing Thread
« Reply #5016 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

  • Handlebar Stache
  • *****
  • Posts: 2088
Re: Australian Investing Thread
« Reply #5017 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

  • Walrus Stache
  • *******
  • Posts: 7254
  • Location: Sydney, Oz
Re: Australian Investing Thread
« Reply #5018 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 hasn’t 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.

Can’t sit around waiting for life to happen... I’ve lost years of potential investment earning by not doing this sooner.

MrThatsDifferent

  • Handlebar Stache
  • *****
  • Posts: 2088
Re: Australian Investing Thread
« Reply #5019 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 hasn’t 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.

Can’t sit around waiting for life to happen... I’ve lost years of potential investment earning by not doing this sooner.

Thank you @marty998 . I’d like to learn from your hindsight. Is it ok if I PM you for more details, unless you’re ok explaining what you did here? I’m 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 that’s 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 you’re 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 don’t know anyone who is mustachian strategic with money here.

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

marty998

  • Walrus Stache
  • *******
  • Posts: 7254
  • Location: Sydney, Oz
Re: Australian Investing Thread
« Reply #5020 on: August 09, 2020, 03:59:16 PM »
That’s 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 didn’t put it in a redraw account as such. CBA loans don’t 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

  • Walrus Stache
  • *******
  • Posts: 7254
  • Location: Sydney, Oz
Re: Australian Investing Thread
« Reply #5021 on: August 09, 2020, 04:02:09 PM »
Your circumstances are going to be different to mine @MrThatsDifferent.

I wouldn’t feel comfortable telling you what to do without knowing all your circumstances.

Juan Ponce de León

  • Stubble
  • **
  • Posts: 138
Re: Australian Investing Thread
« Reply #5022 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

  • Handlebar Stache
  • *****
  • Posts: 2088
Re: Australian Investing Thread
« Reply #5023 on: August 09, 2020, 09:43:59 PM »
Your circumstances are going to be different to mine @MrThatsDifferent.

I wouldn’t feel comfortable telling you what to do without knowing all your circumstances.

Thank you very much @marty998   I understand, that all makes sense. I’m 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 don’t want to miss out on the market.

turboslob

  • 5 O'Clock Shadow
  • *
  • Posts: 15
Re: Australian Investing Thread
« Reply #5024 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

  • Handlebar Stache
  • *****
  • Posts: 2088
Re: Australian Investing Thread
« Reply #5025 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? I’m 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

  • Bristles
  • ***
  • Posts: 336
Re: Australian Investing Thread
« Reply #5026 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

  • Walrus Stache
  • *******
  • Posts: 7254
  • Location: Sydney, Oz
Re: Australian Investing Thread
« Reply #5027 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? I’m 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 “Drop it like it’s haaaawt”

MrThatsDifferent

  • Handlebar Stache
  • *****
  • Posts: 2088
Re: Australian Investing Thread
« Reply #5028 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

  • Handlebar Stache
  • *****
  • Posts: 1236
Re: Australian Investing Thread
« Reply #5029 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

  • Handlebar Stache
  • *****
  • Posts: 2088
Re: Australian Investing Thread
« Reply #5030 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 you’re who I think about regarding this knowing that you claimed this. I don’t 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.

lazycow

  • Bristles
  • ***
  • Posts: 306
  • Location: Australia
Re: Australian Investing Thread
« Reply #5031 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

  • Walrus Stache
  • *******
  • Posts: 7254
  • Location: Sydney, Oz
Re: Australian Investing Thread
« Reply #5032 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 “bring forward” 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

  • Bristles
  • ***
  • Posts: 306
  • Location: Australia
Re: Australian Investing Thread
« Reply #5033 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 “bring forward” 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

  • Bristles
  • ***
  • Posts: 336
Re: Australian Investing Thread
« Reply #5034 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

  • Senior Mustachian
  • ********
  • Posts: 12069
  • Location: Australia or another awesome area
Re: Australian Investing Thread
« Reply #5035 on: August 22, 2020, 02:42:07 AM »
I’m 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 it’s helped me substantially financially to have it. I’m sure my siblings would be better off if they had it too.

Arapiles

  • 5 O'Clock Shadow
  • *
  • Posts: 13
Re: Australian Investing Thread
« Reply #5036 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

  • Walrus Stache
  • *******
  • Posts: 7254
  • Location: Sydney, Oz
Re: Australian Investing Thread
« Reply #5037 on: August 22, 2020, 10:12:08 PM »
I'm also curious as to his reservations.

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

The current government certainly hasn’t 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 ‘educate’ 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 “need certainty” to invest / contribute to super. Two things wrong with that view. The world doesn’t owe anyone a guaranteed return, and since when has anything in life ever been certain (see 2020 lol).

Juan Ponce de León

  • Stubble
  • **
  • Posts: 138
Re: Australian Investing Thread
« Reply #5038 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'.

chevy1956

  • Stubble
  • **
  • Posts: 167
Re: Australian Investing Thread
« Reply #5039 on: August 23, 2020, 11:39:52 PM »
I'm also curious as to his reservations.

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

The current government certainly hasn’t 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 ‘educate’ 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 “need certainty” to invest / contribute to super. Two things wrong with that view. The world doesn’t 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

  • 5 O'Clock Shadow
  • *
  • Posts: 4
Re: Australian Investing Thread
« Reply #5040 on: August 24, 2020, 04:57:58 AM »
I'm also curious as to his reservations.

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

The current government certainly hasn’t 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 ‘educate’ 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 “need certainty” to invest / contribute to super. Two things wrong with that view. The world doesn’t 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

  • Handlebar Stache
  • *****
  • Posts: 2088
Re: Australian Investing Thread
« Reply #5041 on: August 25, 2020, 02:29:09 PM »
Hey all I’ve asked this in the main board but as an Australian perspective would help, thought I’d post here too:
I’m 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 buyer’s 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

  • Handlebar Stache
  • *****
  • Posts: 1340
  • Location: Stuck in Melbourne still. Dreaming of WA
  • Learning.
Re: Australian Investing Thread
« Reply #5042 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 »

lazycow

  • Bristles
  • ***
  • Posts: 306
  • Location: Australia
Re: Australian Investing Thread
« Reply #5043 on: August 25, 2020, 10:47:39 PM »
I'm also curious as to his reservations.

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

The current government certainly hasn’t 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 ‘educate’ 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 “need certainty” to invest / contribute to super. Two things wrong with that view. The world doesn’t owe anyone a guaranteed return, and since when has anything in life ever been certain (see 2020 lol).
I should have checked with my husband before posting, as he actually does not have anything against Super, just leery of putting every available cent into it. Anyway, interesting replies, thank you. I will continue to educate myself in any case.

@marty998 I would love to be directed to reputable sites where I can get unbiased facts!


marty998

  • Walrus Stache
  • *******
  • Posts: 7254
  • Location: Sydney, Oz
Re: Australian Investing Thread
« Reply #5044 on: August 26, 2020, 02:56:58 PM »
https://moneysmart.gov.au/

This is a good place to start 🙂

annsie

  • 5 O'Clock Shadow
  • *
  • Posts: 14
Re: Australian Investing Thread
« Reply #5045 on: September 20, 2020, 03:11:15 AM »
Hi,
Can I back up a bit please to better understand the thinking of having trauma instead of personal income insurance? I’m a SINK, no debt. Thank you!

mrmoonymartian

  • Bristles
  • ***
  • Posts: 287
  • Age: 39
  • Location: Brisbane
Re: Australian Investing Thread
« Reply #5046 on: September 20, 2020, 04:04:14 PM »
Hi,
Can I back up a bit please to better understand the thinking of having trauma instead of personal income insurance? I’m a SINK, no debt. Thank you!

If you lose your job you can get back on your feet straight away. If you lose a leg that's going to be a lot harder to do.

Andy R

  • Bristles
  • ***
  • Posts: 336
Re: Australian Investing Thread
« Reply #5047 on: September 20, 2020, 10:43:14 PM »
Hi,
Can I back up a bit please to better understand the thinking of having trauma instead of personal income insurance? I’m a SINK, no debt. Thank you!

If you lose your job you can get back on your feet straight away. If you lose a leg that's going to be a lot harder to do.

You're mixing up TPD and IP

Insurance Insights: The difference & overlap between TPD, Trauma and Income Protection cover

Income protection
Temporary income replacement for when you lose your job
Temporary income replacement for when you're unable to work due to partial or total disability.

Total and Permanent Disability
Lump sum (to replace money you are unable to ever earn again)

Trauma insurance
Lump sum, designed to cover out-of-pocket medical expenses above those rebated by Medicare & individuals health insurance. Most often claimed for cancer (highest), stroke, cardiac arrest and bypass surgery.


Term life insurance is the 4th type of life insurance, which people without dependants may not need.
And thankfully we don't have 'whole of life' insurance in Australia.
« Last Edit: September 23, 2020, 01:22:48 AM by Andy R »

MrThatsDifferent

  • Handlebar Stache
  • *****
  • Posts: 2088
Re: Australian Investing Thread
« Reply #5048 on: September 21, 2020, 10:11:31 PM »
Income protection doesn’t generally cover redundancy though or being terminated.

Andy R

  • Bristles
  • ***
  • Posts: 336
Re: Australian Investing Thread
« Reply #5049 on: September 23, 2020, 01:23:29 AM »
Income protection doesn’t generally cover redundancy though or being terminated.

You're right. Edited the above.
Cheers.