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

Discussion in 'Share Investing Strategies, Theories & Education' started by Mikity, 1st Mar, 2019.

Join Australia's most dynamic and respected property investment community
  1. Mikity

    Mikity Member

    Joined:
    19th Feb, 2019
    Posts:
    9
    Location:
    Sydney
    No lost super...I only changed over from the balanced option in January this year. I spoke with one of the funds you mentioned today & they were very helpful! Thanks for the tip regarding the rollover process, I will keep it in mind :)
     
  2. tess_

    tess_ Well-Known Member

    Joined:
    21st Jun, 2015
    Posts:
    113
    Location:
    Sydney
    Sounds like you're on track now :) great to hear! Hope you stick around and feel free to ask any more questions that you might have.
     
    Froxy likes this.
  3. sharon

    sharon Well-Known Member

    Joined:
    6th Jul, 2016
    Posts:
    441
    Location:
    Brisbane
    Just another thought on you and the house - have you thought about renting out one or two of the rooms - perhaps to Uni students or the like? That would give you more income. And if you decide to buy it from your brother - it would help with the mortgage OR it would be money you could invest regularly??
     
    skater and Islay like this.
  4. kum yin lau

    kum yin lau Well-Known Member

    Joined:
    24th Jul, 2015
    Posts:
    208
    Location:
    sa
    Hi,
    It might clarify your strategy to look at your overall position. You can probably do this as well as any financial planner before you pay any fees.

    Total equity: approx. 370K + half share of house 400K
    To produce 40K p.a. you need about 800K so your shortfall is roughly 430K

    You have 8 years.

    It's absolutely doable and I think you know it. That's why you've set your target at 40K.

    What is left is for you to choose the way to achieve that.

    Your super sacrifice will net you 200K + growth. Even if you assume a 5% growth, it'll grow by more than 10K p.a. so you'll have a minimum of half a million by the time you're 60.

    The issue here is you've only just started salary sacrificing. Can you maintain that for 8 years?

    What I've done here is walk you through what a financial planner will work out for you.

    You decide if you want a planner.

    Well done and good luck.

    KY
     
    KateSydney and Froxy like this.
  5. Mikity

    Mikity Member

    Joined:
    19th Feb, 2019
    Posts:
    9
    Location:
    Sydney
    Grateful for your contribution @kum yin lau!

    I should be able to maintain the salary sacrifice for 8 years, using my bonus each year will help. I opened an account with Vanguard wholesale fund and invested $150K & hope to continue buying smaller amounts of VDHG via BPay.

    Now all that is needed is to stay the course :)
     
    sharon likes this.
  6. Zenith Chaos

    Zenith Chaos Well-Known Member

    Joined:
    10th Jul, 2015
    Posts:
    1,673
    Location:
    Sydney
    None of us can legally give you advice. That being said, it sounds like you have read some of the content on this forum and applied it to your situation.

    Here are some points:
    1. Given how close you are to retirement maxing out superannuation each year is wise.
    2. You might also consider putting after tax money into super so that when you do reach retirement age it is in a better tax environment as there are limits to how much you can transfer into super - @Nodrog is an expert on this.
    3. To achieve $40k per annum using standard SWR calculations you need $1 million. I would argue you don't need that much, $800k may be sufficient because you can run it down somewhat and have the age pension to fall back on when you are older and spend less money if you do run out. Statistically that is possible but unlikely. That however is a very personal decision for many reasons.
    4. You should reduce portfolio risk as you approach retirement to mitigate a crash / correction scenario that could instantly ruin your plans. My own plan is to increase my allocation to cash so that my maximum cash allocation will be on my retirement day and after that I will very slowly move the cash back into equities.
    5. When you say VDHG do you mean the listed ETF or the unlisted fund. If you go unlisted then use $100k to get into the wholesale fund which has a lower fee and allows small bpay investments. By putting money in weekly you will increase your exposure to the market, which is good. Time in market > Timing market. If you go for 50/50 VAS/VGS you can alternate between VAS and VGS parcels of $10k to slightly reduce brokerage.
    6. Consider a super fund with low cost that can do exactly the same thing as you have now but for which I imagine you pay much more. I've seen articles that show how you can imitate VDHG in Sunsuper with very low fees for example.
    7. Speak to a tax professional to understand the appropriate allocation between super and personal name.
    8. Speak to @Alex Straker
    Not advice.
     
  7. kum yin lau

    kum yin lau Well-Known Member

    Joined:
    24th Jul, 2015
    Posts:
    208
    Location:
    sa
    Hi Mikity, I replied to your post cos like most other people, I've been there and done that. I started a bit earlier at 46 but my income was only half of yours.

    You are considering what to do with the other part of your money, that which isn't in Super. You've identified the crux - you only have half a house.

    I'm not a financial planner and what I say is only what I'd do.
    1) I'd borrow to the max - it's what I did

    2) The borrowings allow me to pay minimum tax. And I'd put all that money into investment.

    But I'm me and you're you. You probably won't have the same level of risk that I take.

    What is most sensible is to buy a 400K house. The rationale is that is your shortfall and that is what you can easily do.

    When property goes up, ALL property goes up. If you don't have a replacement property, in 10 years' time, you may have to pay an extra 200K to continue to live in a currently 800K home.

    If I were in the same situation, I'd look for the most financially sound property in Australia that I could buy for 400K. It needn't be in Sydney, it could be in Woop Woop as long as it currently pays for itself and there's likelihood of cap gain down the road.

    I'd prefer a house on a block of land rather than an apartment because I've had bad issues with BodyCorp and building faults.

    But then, being me, I'd also have a much higher target. Would you be happy to raise your target to 60K?

    Again, good luck and enjoy!

    KY
     
    Ben_j likes this.

Buy Property Interstate WITHOUT Dropping $15k On Buyers Agents Each Time! Helping People Achieve PASSIVE INCOME Using Our Unique Data-Driven System, So You Can Confidently Buy Top 5% Growth & Cashflow Property, Anywhere In Australia