Peter Thornhill 2019

Unlikely to consider doing this based on wanting to keep it simple mostly. But I would also be creating a CGT event in personal names.

 

C’mon pay some CGT.

Us whinging Aussies need it to fund our lifestyle .

 

But if you don’t need to sell anything to fund lifestyle why bother?

In the case of Super the only reason I would sell is because the law dictates I do this. So it simply gets forced out of a lower taxation Super environment into own names.

Of course we could just commute the pensions back to accumulation and leave it in Super till we kick the bucket.

However my gut tells me it’s only a matter of time before any accumulation balance above the Super pension limit will be forced out of Super at a given age. This would be easy for any Gov’t to justify as it really is only targeted at better of Superannuants with a combined balance of more than $3.2 Mil. Most voters would love it given they generally have it in for the wealthy.

 

Don’t vote ALP or Greens then .

 

Many consider me stupid but I’m not that stupid.

 

Meant to add that also like you we are currently holding a lot more in Cash than the 10 year living expenses. Eventually however this excess cash will be deployed into the market being mostly international exposure.

 

I wouldn't say I have it in for the wealthy. I want to be wealthy myself and am certainly on the way.

However, I do think that if a couple have over $3.2 million in assets they don't have much to complain about if they are simply expected to pay the same marginal rate of tax as the rest of the working stiffs out there.

 

Something I'm trying to resolve in my own mind @PKFFW.

I'm wrestling with the idea of what is the purpose of having superannuation now if I don't actually need it. I've even gone through wondering if it's better overall simply to close the SMSF and distribute the funds to my brood as it may be a better use for the money. Having money and making more for the mere sake of doing so seems soulless in a way.

I simply don't know right now.

As for the poor stiffs who have to live on a mere $80k tax free each (Gees, butlers, boot boys, and kitchen hands cost sooooo much these days ya know) I guess some lucky sod who is in the workforce and gets around $110k gross (est.80k net) really feels for them, especially after the wage earner probably has forked out for mortgage costs, cost of raising children, etc.

 

After having watched our mothers go through years of hell in high care we want to be in a position to get the best care possible if either of us ever ends up in a high care facility. And this can be very expensive. Hence why we are reluctant to give away too much of our wealth prior to death.

 

Hmmm based on this variable you just mentioned we might have to work for a few more years

 

You’ll be all right. You’re too healthy given the amount of time you spend in the gym and you rarely drink alcohol.

 

Well, I am in serious trouble .

I never go the gym and I am known to have a glass or two of the red vino .

I better send the wife back to work to build up our net worth and cash reserves to handle what’s coming ...

 

Vanguard is finally coming around to the income approach it seems .....

The rewards of dividends

They went off track at the end of the post though lol

 

Agreed, the "eventual portfolio withdrawals ........" kept Vanguard in the diversified portfolio game.

"This approach should help maintain a portfolio’s diversification, allow more control over the size and timing of eventual portfolio withdrawals upon retirement, and increase a portfolio’s longevity."

 

Lies, damn lies I tell you.

Throughout our lives we work for a wage. Eventually with great saving habit and dedication we replace that working wage with a passive one. Viewed as boring, too difficult and old fashioned nowadays but it’s what I still believe in. And when achieved it’s a wonderful thing leading to an even more wonderful retirement.

 

Here here.

You got my vote. There is an election coming up isn’t there?
The dividend party? That’s a catchy name.

 

I love Shares for income. But the idea is passive income regardless of its source. One should barely have to lift a finger to receive it. Whether you get out of bed or not the passive income continues to flow. Anything else is still work, a job so to speak. If you enjoy the work well good. But what if something happens to you? Will your partner enjoy it? What if you get ill, will others be able to do the work!

For me when I say passive I mean PASSIVE! That is, nothing to do. I can read about investing and rabbit on here on forums cause I enjoy it but if I got bored with it tomorrow an quit nothing changes. The income continues to passively flow into our bank accounts whether I’m here or not. No mandatory analysis, portfolio monitoring and mantainence. Others whether machine or human do the work for next to peanuts.

Passive also means not having to be worried about capital and it’s sometimes horrendous volatility. Passive doesn’t require me or more importantly my heirs when I’m gone having to worry about realising capital to survive. The capital value of an asset and its ups and downs is the great cause of stress. Remove that so that you or your heirs can get on with their lives and that same passive income continues to flow into the bank account no matter what. INCOME, the natural yield of the assets, the real cashflow is what I refer to.

In other words understand the true meaning of PASSIVE income. Many mistake what it really is.

PS: Red wine night. Read at your own risk.

 

I hope it wasn’t that cheap Aldi **** that you like so much .

I knocked off a bottle of Squealing Pig SB for a change.

... it went well with the wife’s Seafood Risotto that she put together tonight .

 

Although Bogle in his books is quite adamant that dividends are the life blood of an investment and talks at length about dividend growth over time. I feel he understood dividend growth as a key component to investing obviously in light of his broader indexing message.

 

Eventual portfolio withdrawals are most investors reality, especially for those who have started educating themselves and investing later in life. It is simply impossible for most late starters to amass a large enough portfolio to provide a full passive income without ever having to touch the corpus.

The group of investors who never have to dip into their investment (like several who generously post here) are a rarity. Sometimes we forget that.

My personal scenario is I will probably only scrap in just enough investment-bound savings to live solely off dividends by the time I retire due to not getting my head around investing till I was in my late 40's. (A life time of rampant consumerism until 2010 when the penny dropped)
My late-to-investing scenario is more common, but not the most common.

The most common scenario (next to zero investments) is that of only having enough invested to last a finite amount of time and be at the mercy of sequencing risk - that's the norm from my observations.

Thus Vanguard, as a relevant product provider needs to use the 80/20 rule - where 80% of their customers probably will not be purely living off dividends but rather will have to follow the eventual withdrawal of their portfolio piece by piece to fund their retirement. Not ideal but not wrong.

I see nothing amiss with that article's statement on eventual withdrawals, as this is most peoples stark reality.