Peter thornhill 26 August 2018 talk

the cash buffer was linked to the rates of minimum draw downs when you are in the distribution phase of your Superannuation lifecycle and not being put in a postion of being a forced seller. He then takes this 2 year buffer, and levers up outside of Super - and Voila is back to 100% invested

 

I enjoyed the presentation yesterday - for someone who says that he isn't funny I definitely had a good chuckle...

Key take aways for me:--
1) For wealth creation - spend less than you earn and borrow less than you can afford.
2) Investing = the use of money productively so that a regular income is obtained. Most "investors" are actually speculators - ie buyi something and hope to offload it to some jub at a higher price.
3) Inflation is public enemy number 1 - invest to ensure a rising inflation protected income stream.
4) Investing benchmark - Australian Industrials Index. No listed property and no resource stocks - both of these tend to be as drag on performance. The biggest and the best companies ALL get property off their balance sheets and lease.
5) Dividends make up the bulk to the returns of the Australian Industrials Index. Follow income streams NOT share prices.
6) The Yield Trap - focus on growing income streams, not on the absolute yield.
7) Listed Property Trusts pay out 100% of earnings annually. Listed Investment Companies can retain earnings to smooth growth - also, the companies held by LICs are pnly paying out 50-70% of earnings...not quite fair to compare LICs to LPTs as payout rations differ.
8) Choice of LICs - long term (ie 50+years), low management fees (ie Milton), ensure that managers have skin in the game (ie own significant portions of the LICs themselves) and ensure that the LICs have a clear investment philosophy.
9) Do roll small manageable levels of debt into your investment strategy - he suggested starting with borrowing 1 years worth of dividends and over time pushing this to 5 years.

One of his classic quotes - with reference to day trading - "its like having a very ugly partner and nothing else to do with my life" but watch the screens...too funny. Seriously though, he had some wonderful thoughts on giving back and ensuring that we as parents don't ruin our childrens lives by trying to indoctrinate them.

To the fellow PCs that I met, thanks a lot, it was nice to put a face to a handle.

 

While buggerising around doing stuff for some reason I was musing about these comments, which include my own. And the thought struck me. Balance cap of $1.6M. Not sure - actually I haven't a shtick of an idea - how 5% of $1.6M ($80k per person) can turn into $450,000.

One of the wonders of the modern age I suppose.

 

Are you on the Four Pillars again?

Can’t remember in this thread where $450k even came from. I think it was his annual dividend income from SMSF, personal holdings and UK holdings so others assumed that multiplied by 2 was his two year SMSF cash pension payments.

In SMSF $3.2 Mil between Peter and wife as starting maximum Transfer Balance Cap pension account under new rules (ie $1.6 Mil commencement value each). Add a year of growth. But even without growth two years minimum pension payments @ 5% is $320k. This is likely a more realistic amount.

But then Peter leverages a similar amount outside SMSF so the end result is 100% shares. He often proudly mentions he is invested in 100% shares. That is the borrowings outside Super offset any cash set aside for SMSF pension payments.

Time for some home brew now this complexity has distressed my brain or what’s left of it.

Off to Mantra at Sunshine Coast (Mooloolabah) again tomorrow for a couple of days of gluttony and relaxation.

 

Here we go, from Cuffelink’s article. Well worth a read including comments. Gee my memory still works:

Give me the long-term predictability of shares, at any age - Cuffelinks

 

Jober as a Sudge.

It's the fault of @ShireBoy. Mind you it is everybody else who assumed it was in the SMSF which is likely the totally incorrect assumption and I'm guilty as well.

Rip it up at Mooloolanah. It will never be the same when you leave (I hope.)

 

We’re regulars there. They make sure there are no guests in adjoining rooms.

 

Yes Peter Thornhill elaborated on the investment article which I think recommended that investments be changed to 'safer' bonds and then sold down like it was a 'glidepath'.

 

Is that because you pay for those rooms as well with all that Divvy income

Gee you travel a long way for holidays... I guess this way you can load the boot up with home brew

 

Cheeky sod. Show some respect for your elders. Actually us at 58 / 55 seem to be a couple of decades younger than most here. I nearly lost my balance and fell over trying to walk as slow as others in front of us.

Just got back from lunch at the Beach Bar & Grill which has a decent selection of craft beer as well as nice meals. Doing our best to spend a wee bit of our dividends. Out on the balcony now enjoying this view, beautiful day:


Whilst drinking these:


Another tough day in retirement, but hell someone has to do it as a sacrifice to keep the economy ticking along.

Cheers

 

Thanks to everyone who has posted comments about the day. I'm still undecided about whether I will go to one of these, but I've noted the comments about the food being great!

 

Being a Thornhill thread when it comes to many of lifestyle pleasures I meant to add what Peter would say:“don’t buy what you can rent”

Which one, Mantra or Thornhill Seminar?

 

25 years ago they used to give away free drinks water down spirits just for attending on the night..

 

Both!

 

Anyone going to the 23rd September one? Missed out on the August one due to work!

 

Yes, going with my wife. After reading this thread I can't wait!

 

Just realized Peter recommends index investing

Peter Thornhill has been preaching the gospel of Australian industrial shares for more than 30 years, and I’m sure many of you have had the pleasure of listening to him at investment seminars

A feature of his presentations is a graph which tracks both income and capital from a portfolio which matches the Australian Industrials Index. The graph highlights how different the outcome would be for two investors who used different strategies.

One invests $100,000 in a term deposit in December 1979

The other invests $100,000 in an index fund which matches the All Ordinaries Industrials Index

Share in compound effect

 

I knew it, bloody closet Index investor all along. And even worse it’s almost verging on smart beta by eliminating sectors. Shame, shame, shame ...