New Here | Late to Investing | 52 Y F | Input Appreciated

Hi Everyone!

After thinking I was doing the right thing by saving all these years, I became aware of investing when turning 50 & retirement was in the not so distant future. Since then I have met with two financial planners whose main focus was insurance & super.

At the moment my 11 year old son & I are living rent-free at my Mum’s house (which my brother & I will inherit approx. $400K each). Mum has Alzheimer’s & is living nearby in an Aged Care facility.

I currently earn $100K and starting this financial year, have salary sacrificed $25K (minus employer contribution). I have $140K in a Corporate super fund split 50/50 Australian/international shares.

I have $190K in Ubank
$15K in CBA account
$20K in CBA shares

I have no debt, however, pay $15K in school fees each year.

I am leaning towards investing $150K in VDHG and Bpay each fortnight or 50/50 split VAS/VGS making investments of $5K.

I have also looked at the NAB Equity Builder but haven’t decided as yet whether this product would be a good fit for my circumstances (I have been approved for $200K loan).

I am similarly undecided whether to stay living in the house in Western Sydney when Mum passes, and pay my brother $250pw rent or sell, invest the money and rent elsewhere.

Would an independent financial planner or an accountant be best placed to offer advice?

I realise I have left my run very late as I am now turning 52 and still haven’t taken action. I would appreciate anyone’s thoughts on the above or any other options I haven’t considered. Thank you in advance for taking the time to respond. Much appreciated

 

Financial planner. Accountants aren't licenced to offer the advice you seem to be after.
Plenty of crooks amongst the good ones so a free initial consultation or phone discussion to find if they are a good fit might be an idea.

You seem to have decent ideas as to what to do with your money, VDHG or a split of VAS and VGS is fine as long as you can accept a largeish fall could potentially happen at any time. What's the goal and how long do you plan to work?

Maxing your super sounds like a great idea. I would take a close look at the corporate fund, fees, investments etc.

No advice

 

Second the above RE super.

Corp employer sponsored fund sounds like it could be expensive and underperforming.

I am with First State and from what I can tell my expense ratio investing the same as you 50/50 aus index/ world dev ex aus unhedged is 0.09/0.10% (0.095) .

Check your insurance as Its not uncommon to have employer sponsored or subsidized that may make it worthwhile keeping it open with a balance large enough to cover the cost.

 

@Hodor

My decent ideas come from the advice given on these forums...I have spent a good many months reading through the various threads, so thank you for your contributions

In an ideal world, I would like to retire at 60 with $40K pa income. The main spanner in the works, I see, is not owning my own home...luckily I enjoy my job because it looks like I will be working into my sixties.

 

@Froxy

I am with CBA Group Super...thank you for prompting me to look at the fees. I will check out several of the funds mentioned on other threads & make a move

 

How much will you be saving outside of super each year? I agree it will be tough to get that income with your current circumstances by 60. You are at the pointy end of sequence risk too so things can change rapidly.

All you can do is develop your plan and stick with it saving as much money as is reasonable for you.

IMO we are encouraged to be over insured these days, maybe it is just my risk profile and situation.

Good luck

 

First, well done for starting. You should give yourself a pat on the back for even assessing your situation and then taking action to address it. It's always surprising to me the number who do nothing and then suffer for it.

As to what to do from the investing aspect, I don't give advice because it could all be wrong for your circumstances.

One approach which I did suggest to my children, who have long flown the coup, is to get a handle on your current expenses and see what can be done to lessen or contain those. It could free up some funds which may then be available for investing for your future. The other is being aware of current commitments which may be actually finite. One example you have mentioned is your son's school costs. That cost is finite and could, in a few years, also free up cash which you could then invest.

Step by step but keeping at it no matter what is probably the key.

It probably be good if you did obtain sound financial advice. You said you have tried two but it doesn't appear to me you were comfortable with what they proposed. There are many more planers who are out there and likely highly competent. I'd approach more than two but have in the back of my mind what I want to achieve but also what I don't want. And lay that on the line to them. Sort of not listen but not take take any BS as it is (sigh, I'll say it again) all about you - and possibly your son.

 

@SatayKing

Thank you for the encouragement & wise words

The last financial planner said several times that she "could go to jail" if she answered my question. That put me off somewhat as I thought I was asking standard questions. I will start making calls this week. It helps that my goals have been clarified by posting on this thread.

 

You could also have a chat with the advisor a few here use being @Alex Straker. At least he’s known to some here and it gives you someone to compare against others.

 

There are horses for courses, VDHG may be ok and you could probably do a lot worse and it is much better than investing in nothing and it may be very suitable for you. For my style I prefer my capital concentrated in well managed companies with the highest conviction to give outstanding performance. Diversification can lead to worsification diluting returns to give average results. I don't know much about VDHG or the companies it invests in, but I suspect it may be too diversified and have companies that drag back returns, just one point to take into consideration.

 

I see it hasn't been mentioned yet, but you can get into Vanguard wholesale managed funds with $100k. Especially if you intend to make BPAY investments each fortnight as you mention. I know the ETFs can mean slightly lower fees in the long run, but for me it's worth it to have the ability to have weekly BPAY investments into Vanguard managed funds without having to do the paperwork of how much I bought and sold each VGS/VAS ETF parcel for.

 

Thank you @tess_

The wholesale fund looks like it would be a good fit...could you confirm, is the first BPAY investment $5K and a minimum of $100 from then on?

 

Ah - I should have elaborated, you need $100k for your initial investment. but thereafter each BPAY can be as little as $100.

I think it can be split across funds eg. Vanguard high growth, Vanguard International but better to check with them.

One thing that I can confirm though is once I had 100k in Vanguard wholesale, I could invest in a new fund within that for $5k initial.

This thread is good, have a read: Vanguard Retail vs Wholesale - Investing - Finance - Whirlpool Forums

 

Also definitely look at your super. I don't wish to offend but your super balance seems quite low for somebody who has presumably been working many years? Is your balance of 140k before or after your 25k contribution?

If you are a believer in index funds (an assumption based on your interest in Vanguard) then you may wish to look into the same for your super too. The main contenders are Australian Super, HostPlus and SunSuper I believe. I recently changed to SunSuper and I was previously in an industry fund which is not that bad... if you are in a corporate super group I would be definitely looking at your super fees.

 

Could you look at buying your brother out for the house ? As part of an inheritance there are a number of savings compared to buying from the market.

It has to still stack up investment and/or lifestyle wise.

 

Noel Whittaker had an interesting article about this recently. https://www.smh.com.au/money/planni...ying-out-a-family-member-20190225-p5103z.html

 

No offence taken at all...I appreciate your thoughts

I only started salary sacrificing last November & will top up with $10K to reach the cap at the beginning of June. I worked part-time for 15 years when my daughter was younger (she is now 30) & again for several years with my son.

Would you mind if I asked, did you find it fairly straightforward to move to SunSuper?

 

Thank you @Tonibell...this is part of my dilemma. I would like to buy the house so I don't have to rent for the next many years (and it is the family home). However, if I pay my brother $150K I will still need to borrow $250K...I will have a house with debt & no money working for me

 

Your brother might give you a discount given that the selling costs, time and hassle are saved. Particularly in the current market it takes a lot of the risk away for him. He might also have a preference for the house staying in the family.

That discount is a bit part of that approach.

Your PPOR can be money working for you - provided you buy well. It will save you rent and will get the market gains the same as if it was rented out. There is also a good opportunity to value add while living in it.

It depends on your priorities but getting a PPOR was a major priority for me.

 

That makes sense re: your super now. I too have been working part time since my daughter was born and still haven't gone back to full time though she's now 8. I still feel that you should have a good hard look at the fees as my gut feel is that the fees may have eroded some of your balance. Also, were you always invested in 100% growth? Just want to be sure you're not missing any super or have had some in a 2nd fund. I assume you've searched for any lost super.

Yes it has been very smooth transitioning to SunSuper but that would have happened regardless of whether I'd picked Australian Super or HostPlus. They're all pretty well regarded. The most complicated bit was liaising with my employer to not commence the rollover process until the last payment was made to my old fund.