Financial Thread

[earl]

I'd also state the following key principles:-

1. You need to save money.
2. You need to avoid fees.
3. You need to avoid fancy investment advice.

=> Stay away from FP's and anyone who tells you that you need to be smart to invest. The key is to recognize that you aren't smart and no one else is when it comes to investing. In fact the experts are going to under perform the market consistently.

I stated earlier that Buffet rails against the financial industry because they are bad. They aren't there to help you. They are there to rip you off. They also rip you off a lot of money. It's not small money.

I'm lazy and I have no confidence in my ability to pick the right market. I save money and I invest it via the data/statistics/facts.

If you are interested read up on Jack Bogle because the man is a legend whose goal in life has been to provide the general public with the right tools to invest to kill the financial advisers that are out to rip you off.

Very few industries charge you to provide poor performance. The financial services industry specifically investment advisers do this. They charge you and basically guarantee you that you will under perform.

 

[TillLindemann]

In regards to the specifics of what to invest in. Stock indexes are going to drive your wealth over the long term. Bonds & cash are there for sequence of returns risk (SORR). SORR is the risk that your retirement fails in the first 5-10 years. Over time though inflation is what kills your retirement. The way to beat inflation is via stock indexes.

I have a low cost super fund that is all stocks. I have about 75% in international index an 25% in Australia.

For money outside of super if you are really lazy you can buy VDHG.I use VAF (a really small amount), VGS and VAS.

https://www.vanguard.com.au/personal/products/en/overview/etf
https://www.vanguard.com.au/personal/products/en/overview/diversified

I hold 3 ETFs: HACK, ACDC, RBTZ. Because they cover specific sectors I'd find it hard to 'pick a winner' in.
But most of my investing is into specific companies: 18 companies spread across agriculture, mining, tech, health, and finance.

Disclaimer: I only invest small amounts when I can, definitely not trying to paint myself as a wealthy type or boast.

 

[happy_tiger]

My problem is a gambler lives in me .......lol

Ok I can win at 3-1 or possibly @ 5-1 .....

 

[earl]

My problem is a gambler lives in me .......lol

Ok I can win at 3-1 or possibly @ 5-1 .....

Yeah that is hard because it's spending money. Still this is a matter of perspective. My friend managed a big private hedge fund. When I mean big I mean it was Australia's richest man at the times hedge fund.

It was just gambling but the stakes were huge. I'm not talking millions. I'm talking 100 millions and probably even billion dollar positions.

My friend is really wealthy. He made that money out of being really successful in that industry.

To clarify my point about investing though that business went bust. My friend also invested for other people after that business went bust. He lost money there and paid back those people's money out of his own pocket.

So I know a really successful investor and I wouldn't trust him to manage my money. He'd manage my money for free for sure as well.

 

[tony soprano]

In regards to the specifics of what to invest in. Stock indexes are going to drive your wealth over the long term. Bonds & cash are there for sequence of returns risk (SORR). SORR is the risk that your retirement fails in the first 5-10 years. Over time though inflation is what kills your retirement. The way to beat inflation is via stock indexes.

I have a low cost super fund that is all stocks. I have about 75% in international index an 25% in Australia.

For money outside of super if you are really lazy you can buy VDHG.I use VAF (a really small amount), VGS and VAS.

https://www.vanguard.com.au/personal/products/en/overview/etf
https://www.vanguard.com.au/personal/products/en/overview/diversified

Can you put your super in van guard or you need cash?

 

[earl]

In regards to the specifics of what to invest in. Stock indexes are going to drive your wealth over the long term. Bonds & cash are there for sequence of returns risk (SORR). SORR is the risk that your retirement fails in the first 5-10 years. Over time though inflation is what kills your retirement. The way to beat inflation is via stock indexes.

I have a low cost super fund that is all stocks. I have about 75% in international index an 25% in Australia.

For money outside of super if you are really lazy you can buy VDHG.I use VAF (a really small amount), VGS and VAS.

https://www.vanguard.com.au/personal/products/en/overview/etf
https://www.vanguard.com.au/personal/products/en/overview/diversified

Can you put your super in van guard or you need cash?

It's tough.The system needs to change. I think you can go through SunSuper and invest that way but there will be an additional super fee.

There actually needs to be some reform of the Super industry because the fees are too high.

I recommend people check their Super fund. Most super funds should offer generic diversified funds as well as specific options. I take the 100% stock approach which long term I think is safer but some people can't handle ups and downs. I lost heaps this year and it didn't bother me one bit. It's all come raging back. Try and get a cheap fee index option.

 

[earl]

One point I forgot to make is that the fees that FP's or high cost funds charge are even worse than what I've stated.

Just say you have 1 million in your retirement funds. A fair rule is you can withdraw 5% of that per year to live off. The data for a 95% confidence level over 30 years is actually 4%. Dependent on your age etc you can adjust that figure. For this example let's just use 5%.

If you go through a FP and they charge you 1% per year then you aren't actually charging you 1% of 1 million dollars. They are charging you $10,000 out of your $50,000 income per year.. So they are decreasing your retirement spending every year by 10k. They are actually hammering you because your retirement spending is taking a 25% hit year on year.

So they under perform the market and hammer your retirement via their fees.

 

[happy_tiger]

My problem is a gambler lives in me .......lol

Ok I can win at 3-1 or possibly @ 5-1 .....

Yeah that is hard because it's spending money. Still this is a matter of perspective. My friend managed a big private hedge fund. When I mean big I mean it was Australia's richest man at the times hedge fund.

It was just gambling but the stakes were huge. I'm not talking millions. I'm talking 100 millions and probably even billion dollar positions.

My friend is really wealthy. He made that money out of being really successful in that industry.

To clarify my point about investing though that business went bust. My friend also invested for other people after that business went bust. He lost money there and paid back those people's money out of his own pocket.

So I know a really successful investor and I wouldn't trust him to manage my money. He'd manage my money for free for sure as well.

If you lose it all you lose it all ...whether it is $10 or $100 000 000 ...risk is the same

 

[BZN]

This is actually a really serious topic. Put it this way. Investing via FP's and the like can cost you 10's and even 100's of thousands of dollars over the course of your life. Do people on here have enough money to throw away like that ? I don't.

A general plan for most people would be:-

1. Pay off your house.
2. Make sure your super fund invests in low cost indexes. The lower the cost and the broader the index the better.
3. If you pay off your debt and you want to retire prior to 60 or you will end up with too much in Super than invest in index funds outside of super.
4. I like ETF's because they have the lowest fees.
5. I like vanguard. You really cant go too wrong here.

[/QUOTE]

You're :100: % correct...this is "a really serious topic".
I'm sure many many people will find dealing with a financial planner a very 'rewarding' experience financially and personally.
But...Yuh just gotta be careful and sensible and trust Yuh gut instinct eh!, in that if you are being promised the earth, stars and moon it probably means it's just to good to be true, so Yuh vacate the premise as quickly as possible before Yuh get ripped off.
My financial planner was with a big Company called
State Super, and I paid over $1000 per year for his advice.
The All Ords. index was going very well for a while after I retired so I was able to live reasonably comfortably just on my Super.
When the G.F. C. came along it was a different story.
The All Ords was crashing.
My F.P. suggested this and that then asked 'what I wanted to do', so I actually had the final say.
By doing that I.M.O. he was absolving himself of any blame for any loss in my income.
I lost $$$ at a rapid rate, but of course he kept on getting over $1000 per year for his advice.
At my last appt with him his advice was "you have such a small amount in your account the only thing you can do is close the State Super acc. and deposit the $$$ in the bank".
I had lost 50% of my Super $$$ and I felt like I was up Ship Creek without a paddle.
My eldest brother kept on advising me from very soon after the G.F.C. started to close my Super account and put my $$$ in the bank.
He lost nothing by having his $$$ in the bank and didn't need financial advice at over $1000 per year to do that.
I stayed loyal to State Super and lost a comfortable lifestyle, as I know many other people did.
I now have a small amount in a bank savings account and an even smaller amount in a f.d. account to pay for my funeral when I fall of the perch.
So Yes...financial planning Is 'a really serious topic'.

 

[bathursttiger1]

Just as Covid started to have an impact of the share market, we quickly put all of our Super into cash and left it there for 6 months as we were nearing retirement and couldn't afford to leave it in a growth fund and ride out the storm.
We any lost a couple of thousand dollars, we were very luck that we acted so swiftly.

 

[Magpie1969]

Hoping a combination of Superannuation and investment properties can set up my retirement in 9 years time.

 

[earl]

@MAGPIES1963 - that is really tough.

A couple of points:-

1. My opinion is that paying for financial advice to the tune of $1000 per year is better than getting gouged a percentage of your account.
2. Your financial planner to me gave you terrible advice. FP's aren't financial geniuses or anything like that. Investing is exceptionally simple.
3. Your brother offered you terrible advice as well.
4. Investing is simple but the mind-set to do it can be hard. You experienced the worst of that.
5. The problem with cash/bonds etc is that they are basically losing value year on year. Stocks although they are more volatile gain value year on year. Inflation is what kills your portfolio over time.
6. I think investing for yourself is the best option for the majority of people. I personally can handle a 50% drop in my account with no problems at all. I don't lose a minutes sleep over it. I have some cash and bonds but I will eventually go to 100% stocks and I will lose 50% of my portfolio's value and I'll be fine. You probably can't do that. You need to figure out a portfolio that works for you.
7. In Australia we have a fantastic pension so you should be okay. I always recommend owning your own residence because worst case if you get the pension and you own your house and you manage your expenses you will be fine.
8. There are heaps of portfolio options available. You can have as little as 25% of your portfolio in stocks. Personally I think you should have at least 50% in stocks. 50% stocks and 50% cash should enable most people to sleep at night.

You can read this and it may help:- https://jlcollinsnh.com/

FP's are in an industry that really shouldn't exist. They don't help you. You need education and then you just need to do simple easy things that anyone can do assuming you have a job and can save money.

If you ever need to talk or you need help let me know. I can't offer money to you. I need money for my family and my retirement. I'm not rich and I don't lead a wealthy lifestyle.

The richest person I know rides his bike a lot because petrol is too dear. I've seen him and his wife take stuff away from people's junk they have thrown out for council pick-ups. His wealth wouldn't be in the 100's of millions but it is in the 10's of millions.

You can turn your financial situation around assuming you can save money.

Good Luck !

 

[twentyforty]

@MAGPIES1963 - that is really tough.

A couple of points:-

1. My opinion is that paying for financial advice to the tune of $1000 per year is better than getting gouged a percentage of your account.
2. Your financial planner to me gave you terrible advice. FP's aren't financial geniuses or anything like that. Investing is exceptionally simple.
3. Your brother offered you terrible advice as well.
4. Investing is simple but the mind-set to do it can be hard. You experienced the worst of that.
5. The problem with cash/bonds etc is that they are basically losing value year on year. Stocks although they are more volatile gain value year on year. Inflation is what kills your portfolio over time.
6. I think investing for yourself is the best option for the majority of people. I personally can handle a 50% drop in my account with no problems at all. I don't lose a minutes sleep over it. I have some cash and bonds but I will eventually go to 100% stocks and I will lose 50% of my portfolio's value and I'll be fine. You probably can't do that. You need to figure out a portfolio that works for you.
7. In Australia we have a fantastic pension so you should be okay. I always recommend owning your own residence because worst case if you get the pension and you own your house and you manage your expenses you will be fine.
8. There are heaps of portfolio options available. You can have as little as 25% of your portfolio in stocks. Personally I think you should have at least 50% in stocks. 50% stocks and 50% cash should enable most people to sleep at night.

You can read this and it may help:- https://jlcollinsnh.com/

FP's are in an industry that really shouldn't exist. They don't help you. You need education and then you just need to do simple easy things that anyone can do assuming you have a job and can save money.

If you ever need to talk or you need help let me know. I can't offer money to you. I need money for my family and my retirement. I'm not rich and I don't lead a wealthy lifestyle.

The richest person I know rides his bike a lot because petrol is too dear. I've seen him and his wife take stuff away from people's junk they have thrown out for council pick-ups. His wealth wouldn't be in the 100's of millions but it is in the 10's of millions.

You can turn your financial situation around assuming you can save money.

Good Luck !

Earl, it seems we can agree on something lol. To accumulate wealth you don’t need to live like a pauper, but you do need to find a way to hang onto some of your income, whether by social security, return on investment or by labour. Your idol Buffet chooses to live the lifestyle of a proletarian but the reality is that those who save some of their income spend more than those who don’t, it can’t be any other way, because people who have more wealth eventually have more to spend. If that is not the reason for accumulating wealth, then what is?

 

[InBenjiWeTrust]

This is actually a really serious topic. Put it this way. Investing via FP's and the like can cost you 10's and even 100's of thousands of dollars over the course of your life. Do people on here have enough money to throw away like that ? I don't.

A general plan for most people would be:-

1. Pay off your house.
2. Make sure your super fund invests in low cost indexes. The lower the cost and the broader the index the better.
3. If you pay off your debt and you want to retire prior to 60 or you will end up with too much in Super than invest in index funds outside of super.
4. I like ETF's because they have the lowest fees.
5. I like vanguard. You really cant go too wrong here.

I agree, just to add another strategy, an aggressive one, so it is not for everyone, The strategy is to borrow on the equity created by property price increase and paid off mortgage.
The idea is to buy an investment property, with the equity as deposit, (Big) assumptions are: you must have 1) secure income to prosper from negative gearing,. 2) Property price increases. 3) you property is rented and you have a solid tenant. If any on 1-3 goes wrong this strategy is the recipe to how to get bankrupt!
Advantage: this strategy can, because of gearing, help you to pay your mortgage faster, You can than play the same game over and over, as soon as you create enough equity buy another investment property.
However, remember the name of the game is: always protect your money, and adjust your investments accordingly!
Hope this helps😊

 

[BZN]

@MAGPIES1963 - that is really tough.

A couple of points:-

1. My opinion is that paying for financial advice to the tune of $1000 per year is better than getting gouged a percentage of your account.
2. Your financial planner to me gave you terrible advice. FP's aren't financial geniuses or anything like that. Investing is exceptionally simple.
3. Your brother offered you terrible advice as well.
4. Investing is simple but the mind-set to do it can be hard. You experienced the worst of that.
5. The problem with cash/bonds etc is that they are basically losing value year on year. Stocks although they are more volatile gain value year on year. Inflation is what kills your portfolio over time.
6. I think investing for yourself is the best option for the majority of people. I personally can handle a 50% drop in my account with no problems at all. I don't lose a minutes sleep over it. I have some cash and bonds but I will eventually go to 100% stocks and I will lose 50% of my portfolio's value and I'll be fine. You probably can't do that. You need to figure out a portfolio that works for you.
7. In Australia we have a fantastic pension so you should be okay. I always recommend owning your own residence because worst case if you get the pension and you own your house and you manage your expenses you will be fine.
8. There are heaps of portfolio options available. You can have as little as 25% of your portfolio in stocks. Personally I think you should have at least 50% in stocks. 50% stocks and 50% cash should enable most people to sleep at night.

You can read this and it may help:- https://jlcollinsnh.com/

FP's are in an industry that really shouldn't exist. They don't help you. You need education and then you just need to do simple easy things that anyone can do assuming you have a job and can save money.

If you ever need to talk or you need help let me know. I can't offer money to you. I need money for my family and my retirement. I'm not rich and I don't lead a wealthy lifestyle.

The richest person I know rides his bike a lot because petrol is too dear. I've seen him and his wife take stuff away from people's junk they have thrown out for council pick-ups. His wealth wouldn't be in the 100's of millions but it is in the 10's of millions.

You can turn your financial situation around assuming you can save money.

Good Luck !

[/QUOTE]

I my younger years I put as much as I could afford into my super account, and at one stage I was looking forward to a retirement payout of $1,000,000 +.
With that in mind I have to admit I wasn't very careful with my spending and wasted a lot of $$$ on grog, cigarettes and cars. Very pleased to say I haven't had alcohol or cigs for about 30 years, but still wasting tooo much on cars, not totally my fault now though. Some of it has been forced on me for various reasons.
My wife is a Great Housekeeper...she kept the house from her 1st marriage and has now kept our house...we are legally separated and living under the same roof with me paying her rent for the spare bedroom.
I'll soon be selling my 19ft c'van (towed that with an Isuzu Mu-X) that I thought we could travel in but never really did, and purchasing a 14ft c'van to tow with my Subaru Forester, which will be my home.
The $$$ I have in my funeral acc wont pay for a normal type funeral anymore, so I will have to go with a Bare Funeral.
I exist on the pension and a small amount of $$$ in my bank acc, and I certainly dont need a $$$ hand-out from anyone.
The stuff I have to clear before I move into my c'van, I will mostly be giving to the local Op-Shop, to hopefully go to someone that needs it more than I do and for the Church to make a few $$$.
I hope that very rich person you know doesn't live near me...what a Sicko.
My apologies for taking up your time in you reading this Earl, but I have no one else to down-load to atm.

 

[Papacito]

What I've learned from 20+ years of investing:

Paying off your mortgage is a win-win investment. It's like compound interest without tax and you end up with an asset you can sell more or less tax free.

Unless you have insider knowledge, stay out of shares. You're at a major disadvantage over the real players.

Even with some of the generous tax claims, real estate investment is a bit of a joke. Unless you can get a property re-zoned, you're just playing around in the kids pool.

Invest in yourself. Do a course, get a degree, get your skills up. The return on investment is huge.

Have some rainy day money set aside, ideally three months of wages.

Never, ever, ever dip into your super.

 

[TillLindemann]

Unless you have insider knowledge, stay out of shares. You’re at a major disadvantage over the real players.

I disagree with this completely. There is nothing complex about shares, if you're investing for the long term, as opposed to trying to make a quick buck trading.

Shares consistently beat bank interest, so is better than cash (bank interest doesn't even keep up with inflation, so you're actually going backwards).

I also think it's better than property investing, because you don't need to take out a mortgage and hence pay bucket loads of interest. Paying interest is dead money. With shares, you can just invest small amounts when you have cash available, so no need to pay interest.

The share market is also more 'liquid', so if you want to buy or sell you won't be waiting months, and you won't be paying agent's fees.

My tip to beginners, is invest in companies that you actually use regularly. E.g. if you bank with ANZ, invest in ANZ. If you eat bega cheese and drink dairy farmer's, invest in Bega. Not only do you understand what these companies are about, but there's a certain satisfaction knowing that if they rip you off, you'll get some of that back as dividends!

 

[Papacito]

Unless you have insider knowledge, stay out of shares. You’re at a major disadvantage over the real players.

I disagree with this completely. There is nothing complex about shares, if you're investing for the long term, as opposed to trying to make a quick buck trading.

Shares consistently beat bank interest, so is better than cash (bank interest doesn't even keep up with inflation, so you're actually going backwards).

I also think it's better than property investing, because you don't need to take out a mortgage and hence pay bucket loads of interest. Paying interest is dead money. With shares, you can just invest small amounts when you have cash available, so no need to pay interest.

The share market is also more 'liquid', so if you want to buy or sell you won't be waiting months, and you won't be paying agent's fees.

My tip to beginners, is invest in companies that you actually use regularly. E.g. if you bank with ANZ, invest in ANZ. If you eat bega cheese and drink dairy farmer's, invest in Bega. Not only do you understand what these companies are about, but there's a certain satisfaction knowing that if they rip you off, you'll get some of that back as dividends!

I have a degree in the field and worked in finance for a while. My advice is based on what I've seen.

I don't agree with much of the above, but definitely wish you the best of luck with your investing.

 

[TillLindemann]

Unless you have insider knowledge, stay out of shares. You’re at a major disadvantage over the real players.

I disagree with this completely. There is nothing complex about shares, if you're investing for the long term, as opposed to trying to make a quick buck trading.

Shares consistently beat bank interest, so is better than cash (bank interest doesn't even keep up with inflation, so you're actually going backwards).

I also think it's better than property investing, because you don't need to take out a mortgage and hence pay bucket loads of interest. Paying interest is dead money. With shares, you can just invest small amounts when you have cash available, so no need to pay interest.

The share market is also more 'liquid', so if you want to buy or sell you won't be waiting months, and you won't be paying agent's fees.

My tip to beginners, is invest in companies that you actually use regularly. E.g. if you bank with ANZ, invest in ANZ. If you eat bega cheese and drink dairy farmer's, invest in Bega. Not only do you understand what these companies are about, but there's a certain satisfaction knowing that if they rip you off, you'll get some of that back as dividends!

I have a degree in the field and worked in finance for a while. My advice is based on what I've seen.

I don't agree with much of the above, but definitely wish you the best of luck with your investing.

No worries, best of luck to you as well. It is good to hear different views.

 

[Harvey]

Ironic that this add was sitting on the bottom of this thread (Edit: it is which medical marijuana stocks to buy on the ASX)

https://www.googleadservices.com/pagead/aclk?sa=L&ai=Cbg0TRpryX6rtF_eLrtoP1c2V0A6xovqhYMClorCIC7_hHhABIJmUtyRgpYCAgJABoAHJwan-A8gBAakCMsNYtunQqT7gAgCoAwHIAwqqBKoCT9CjMofCfhNqdEYho_eIJUxMcmplvyBCLSzhXVq9eXvlRzUkx79yj2JonNolJ3Ts387wLFm1z6WLVRlQ2ur-i-e_9KhBd94vxJYhfX9p5wwFOrd0rOoG-Jme9xOlhK6Utk8gdp8Xf8oh_s-6QLP1cmAjEil_Svfs3B_BOhrJAeXzoLaDDboCSEigwbB3vsXLr4vcb_THAQgjFR6S51v1nryNtljAbc37QqkqoTB4szfwzW4rcE9Xh7HEVLiwlbtfmdIuK02EHI_zJ7YlLl8L1BHqGndg7p65Aw_wCWsndIIvMdIUULsfN9b4bwGWPon7OnfRtQxx77-EFfzRnkKAt2Cp8cLVJ0LhQ87yZBkb7e9kiCE0Dz1w9609_i9EHGL52_E0V5O7faVfmcAEzuXwzp4B4AQBoAZRgAefvtYBqAfVyRuoB_DZG6gH8tkbqAeUmLECqAel3xuoB47OG6gHk9gbqAe6BqgH7paxAqgHpr4bqAfs1RuoB_PRG6gH7NUbqAeW2BvYBwHSCAkIgOGAQBABGB2xCe7MCsy_kQDpgAoBmAsByAsBuAwB2BMNiBQBmBYB&ae=1&num=1&cid=CAASPeRolDilujSDyhBmV1w8aC8TkQLTwIDSg2RZm9qGBOVyNHgoZk-xF6fVknQsO0fj4mSSO9FxWLdtOMbjkOI&sig=AOD64_1-Q_S9JZHKviGdoBxbu7RE7N-QLg&client=ca-pub-3513571339731292&nb=7&adurl=https://www.australianstockreport.com.au/asx-medical-marijuana-stocks%3Fcampaignid%3D801064784%26adgroupid%3D42578227918%26adid%3D407309733020%26utm_term%3D%26utm_campaign%3DMedical%2BMarijuana%2BStocks%2B-%2BDisplay%2B-%2BContextual%2B%252B%2BInterest%26utm_source%3Dadwords%26utm_medium%3Dppc%26hsa_acc%3D3506495018%26hsa_cam%3D801064784%26hsa_grp%3D42578227918%26hsa_ad%3D407309733020%26hsa_src%3Dd%26hsa_tgt%3D%26hsa_kw%3D%26hsa_mt%3D%26hsa_net%3Dadwords%26hsa_ver%3D3%26gclid%3DEAIaIQobChMIqqiylLmB7gIV94VLBR3VZgXqEAEYASAAEgIWefD_BwE