Seeking advice on wealth accumulation

Hi Y-man did you include the $2000 monthly deposit we are adding to these stocks in your calculations? Just rechecked figures and it looks more like 3.5 mil.....

However if we use debt recycling and start with 400k and reinvest dividends but make no cash contributions it's more like 4 mil.....

 

You also need to think, do you only want to leave money to your child when you are dead? Or help them with a deposit when you are still alive? That affects whether you use SMSF or not.

 

That's a good point. Initially I had hoped to keep it separate but the tax becomes an issues down the track....perhaps I need to look into several accounts.

 

If you're going to invest $500 per week in index funds, do it via super. This way you get an immediate tax deduction on the $500 per week, tax deductions on the returns and reduced tax when you draw the funds at retirement.

 

I am not sure I understand.

Why is it different if you use a SMSF?

Once you are in pension phase, you can withdraw as much as you like (up to the full balance), can’t you?

 

Say your 30 now with a baby. Baby hits 25. wants help with a house. Not yet pension phase. Its likely that the preservation age will go up in the future.

 

Okay, that makes sense.

We could have helped our two kids with deposits but decided not too. We helped them with our inspiration, our encouragement, our knowledge, our experience, ... but no cash.

Seems to have worked. Both are in their early 30’s and currently own two properties each.

 

That’s awesome!

Being given stuff kills off the need and drive to earn it yourself.

Makes the parent feel good but often robs the children of important life skills and accomplishments.

I’m now very thankful for not having received help.

Must admit, with rich parents I probably would’ve milked it and become an entitled lazy bum lol.

 

When I left home in 1977 (I was 20+) to start my first job, my mother gave me $50 to buy myself a 21st birthday present (an electric shaver).

I spent that money on surviving and it took me 10 years to feel comfortable financially to buy myself that shaver.

Years later, I shared that story with my mother. She was angry and asked why I didn’t ask for money. I told her that I wanted to fund my own life. She told me how she had given money to my younger siblings to help them.

I told her that the greatest thing she has done for me was not to give me money. As proof, I asked her to consider, out of all of her six children, who has done the best with their life.

She looked proudly at me. She had her answer.

 

You must have been hairy!

Did you look like Sadaam when they found him in that hole?

 

Very good points. Perhaps the most important thing is to teach our children the value of money. Give them opportunities to build their confidence and earn money. The children I grew up with that did best had very loving homes and a fair bit of help starting out.....

 

Haha!!!

I am not a very hairy bloke, bit of a cleanskin.

Gotta use a magnifying glass to find any hairs on my chest .

Nah, I am not that good looking .

 

A couple of times, we have “lent” our kids money.

That is, we gave them some cash, had an agreement that they would pay it back and by when and enforced the agreement.

Penalty for breaking the agreement - being crossed out of our Wills .

Never had a problem with repayment .

 

That's a great way to help out....at one point my parents had considered lending money to me to start a business venture. I would pay money back along with the variable interest rate much like a bank loan.....didn't go ahead with the business but was lovely to know they would have helped me