Peter Thornhill

No. It's not easy but you can't afford to chicken out at the worst possible time. The losses then become permanent. That's why you must have conviction in your investment strategy otherwise fear will take over and result in you doing something stupid.

This old post of mine might be helpful:

Listed Investment Companies (LICs) (my GFC experience)

 

Cheers mate, been reading up on old ss forum most of today with many of your posts and links.

What you expressed below Is extremly difficult. Well done.
I will contact you when I see my wealth halve.


Yeah, cool as a cucumber I was, NOT!

He he, here's me during the GFC (from an earlier post):

1. Firstly there is euphoria over the wonderful buying opportunities.
2. No matter how hard you try to manage gradual averaging down it is highly likely the fall will overshoot your worst expectation.
3. You become peeved off that you've run out of cash / borrowed funds to take advantage of further falls.
4. Your stocks keep plummeting and anxiety sets in despite your knowing what happens historically with recovery after these events. Uuummmm what if it is different this time, Japan scenario?
5. Your stocks plummet even further with anxiety turning into one feeling somewhat miserable.
6. Your conviction to Buy and Hold will be tested BUT YOU DON'T GIVE IN.
7. You continue to monitor your stocks less and less because it increases your misery.
8. Eventually you stop looking and focus on other things in life.
9. Despite occasionally feeling a little down you are thankful you took the dividend investing approach as the lion's share of dividends being paid prior to the crash continue to flow into the bank account (especially with quality LICs). And of course there's the personal cash buffer to smooth dividends if needed.
10. After awhile you dare to occasionally check in on your stock portfolio. Things are looking better. You start feeling more cheerful. Yes I knew it would be alright whilst patting yourself on the back for having the balls to have hung in there.
11. You now start getting a little excited as the cash / borrowed funds are building up again. You know there may be a bear market coming after the initial post crash recovery. Plus there is potential for some juicy capital raisings via SPPs and Rights Issues etc as companies seek to strengthen their balance sheets. Woohoo some more great buying opportunities.
12. Things start returning to some kind of normality. After all the bargain hunting you find it difficult to buy stocks now they are more expensive.
13. You start wishing for another crash to come along reminiscing about all those wonderful income streams purchased dirt cheap during the previous crash / bear market.
14. And so the cycle continues as it always has ...

 

Yep, somewhere in my mind I had thought he did it over 15yrs.

 

agree

 

you're going to have to ask yourself an honest question of if Shares are for you.

If you are someone who is going to be watching the stock price day in day out, then it's prob not the right investment for you. If you think you will panic when the market drops and you'll sell then I'd stay the hell away.

You haven't made a loss until you actually sell. The graph posted previously is very important, it shows how stable dividend returns are despite stock price drops. This strategy is about focussing on a growing income stream and re-investment.

 

As you know guys like this are rare you may enjoy this bloke if you can put up with the sound, but he sells a great message.

 

Update from my motivated money experience:

Great book and great insights especially at the close of the book where he mentioned an old chap who said he would buy shares in 10,000 share parcels! That is good going! In addition he mentioned having around 100k in cash ready to be used!

My partner has also read the book and is hooked in his approach too!

Im stuck at work doing a 12hr shift and she jus messaged me saying she found a few more youtube vids of Peter Switzer "buy and hold v terms deposits" as well as "dividends v term deposits"!

@austing im sure your favourite chart makes an appearance too!

 

Glad you liked the book. Mine is a very early edition so not sure what's in the later editions. Some are disappointed because they miss the main message and are expecting Peter to be telling them what shares to buy.

A brief summary of some of the chapters in his book in video form is found here:
http://www.youtube.com/playlist?list=PLv5GSB-845LG8obG_aV64bhgQ4trs60d_

A search of YouTube and elsewhere will unearth others.

This thread hopefully helps expand on the implementation of the strategy. Probably worth reading multiple times and pay particular attention to his articles especially the "My Say" ones.

I've tried to create the most comprehensive collection around of material relating to Peter's approach in this thread. Due to a crap memory and misunderstandings at times there may have been a few minor errors in some posts. I hope Peter will forgive me if he ever stumbles upon all this. But hopefully most of it is accurate. I personally think his knowledge and experience is priceless hence why I make the effort to draw others attention to it. They can then make up their own mind.

Cheers

 

Perhaps this was one of them.


{Note - thread continues here: Peter Thornhill 2017}

 

Hi @Terry_w I have a trust that was set up for my 101 year old mother where the sole asset is a large investment in an insurance bond. The trust was set up this way to minimise her aged care costs in a nursing home (I think that loophole has now closed). When she passes and the bond gets paid out would it be possible to reuse the trust structure for LIC investing or do you need to start again?

 

How do you access earlier articles of Peter's "My Say"

 

It's not elegant, but chucking this into Google will yield all the results you want:

Code:

site:motivatedmoney.com.au peter thornhill my say

They won't be in any particular order but you'll find most of them.

Or add in the numbers i.e. "my say no 29" is the lowest number I could find. I don't know where 28 and under have disappeared to.

 

I have no idea of the terms of that trust. The trustee will need to seek legal advice.

 

Not “My Say” but a few of Peter’s earlier articles can be found here. Just search using “Thornhill” as keyword. I use to follow this site until Peter left to start his own company “Motivated Money”:

Financial planning Investment and Self Managed Super Fund Article

 

Hi all - what an awesome thread to have read through!
I am doing my own modelling of similar to division recycling scenario Peter Thornhill proposes. What I can’t answer is: what happens if interest rates increase. Meaning the loan interest (after tax) exceeds dividends (after tax). I am cash flow negative each year.
I am looking at 15 years+ so I presume hang in there until rates cycle down again or perhaps high rates = general economic growth so portfolio growth makes up for it?

 

Debt recycling in reverse!

But don't forget to get advice on capitalising the interest and also don't forget the capital gains - which could be harvested for extra debt recycling.

 

Was it just Argo you purchased after reading the book @pippen ?

 

Argo was the first purchase and is the one with with most number of shares, also have whitefield and a small holding of aui. Have old employee shares of bhp so around 1300 of those suckers now put on drp.

Partner has bki which she just leaves on drp and gets around 5k per annum dividends from that.. she had some Milton and now it is sol come to think of it I have some sol only around 1000 shares tho.

She invests in vas and vgs along with cash buffer and all this is outside super so it's just ticking along.

 

Pistol Pete always gets the comments section going...
Follow the market trajectory and stop the usual mistakes

 

@APINDEX had to smile at people asking Peter which ETF he recommends