Suggestions and Recommendations on ETF options?

Hi all,

I have read through some of the forums and have found information here to be very valuable and reliable. With the support and advice of members here I purchased and renovated my first house which has been challenging and enjoyable.

We now have one eye on the future and part of that is long term financial stability.
My partner and I (26 & 24) are looking at opening a joint investment account early next year and plan to invest 15-20% of our income. The goal is av. net returns of 8-10% (or more if possible!) over a 30 year period to provide income in retirement and help our future children with housing and post school education.
Can anyone share their experience of first starting out and perhaps how technology can be used to monitor and provide updates along the way?
I have been looking at low fee Robo-advisors as an option and have considered Six Park and others. My opinion is this is somewhat secure and passive, happy to be proved wrong if that is not the case?
Thanks in advance, i appreciate your time and support.

 

Others who are experienced in the space your asking about will reply.

I just wanted to congratulate you on planning at such a young age for your financial future. Very responsible and mature young man you are.

All the best.

 

Can’t give advice – but this is what I would do to get a foundation in place.

Salary Sacrifice to max out your 25K deductable super cap into a large super fund like Australian Super, select the high growth option and then totally forget about it until preservation age.

Invest the remainder in a passive 50/50 split Aus/Global. Ideally go the Vanguard wholesale fund route (VAS/VGS equivalents) where you can Bpay straight from your salary each period. Forget technology for monitoring – the ultimate passive investment management tool is neglect.

 

Appreciate that, thank you!

I left home at 15 and was forced to grow up quickly and it was basically sink or swim. I grew up pretty rough and wanted to learn as much as I could so I could provide for my own family one day. Somehow along the way I became addicted to hard work and growth and the general advice and support on here has been incredibly helpful along with my own DD to achieve goals.

 

for 40 years? Consider whether it might be more flexible outside super with more gearing.

 

Hi, thanks for the response.
I have been with Australian Super for 6 years now and have selected the Balanced Growth option. I was a little hesitant going for the most aggressive option as I didn't really understand what it all meant at the time but I will look into that more deeply.

When you say:

"Invest the remainder in a passive 50/50 split Aus/Global. Ideally go the Vanguard wholesale fund route (VAS/VGS equivalents) where you can Bpay straight from your salary each period"

How does one actually physically go about this? Do I need to engage a stockbroker or is it simply opening an account and selecting the investment option that I wish to invest in?​

 

Direct through Vanguard. need a min starting bal of $100k to qualify for the sig cheaper wholesale option.

Or a broker to buy the equivalent ETF listed on the asx.

However Vanguard are rumoured to have a better and cheaper suite of direct options coming early next year.

 

100k min starting? Oh wow.. we may have to save up for a couple of years first before looking at that as an option.

 

The mathematics says the longer you intend to hold it the higher allocation you should have in equities. High growth being the highest allocation in Australian Super. .

You can create a wholesale account at Vanguard if you have $100k. If you have less up front, internet brokers may suffice such as cmc, netbank etc, although you would need to find an optimal period to wait between purchases to minimise brokerage whilst maximising time in the market.

5 Best Online Brokers Australia for 2019 | StockBrokers.com

Although it sounds too simple, the advice @dunno provided is spot on - very simple and very effective.

 

Stock broking ETF alternative :

1. Save $20k
2. Invest $10k in each of VAS and VGS
3. Go back to 1 unless total share value exceeds $100k, in which case sell all and buy the same allocation in the Vanguard wholesale fund
4. Bpay weekly or as soon as you save the minimum investment amount

 

Whats so special about the bpay option that your willing to pay cgt for it?

 

The fees are not terrible in the retail option, only $5k needed

 

Time in the market over timing the market plus forced saving.

Automatic Bpay of $500 a week is probably better for the majority than purchasing $5000 of shares every 10 weeks. There may be scenarios where it may be better to buy ETFs through a broker such as if you save $5k a week and you are strict enough to enforce a regular purchase plan.

In addition, after a year the CGT halves and there is no guarantee the market has gone up during that period.

This is about overcoming investor psychology and increasing simplicity rather than absolute returns.

 

Nailed it.

I would say one of my biggest failings over the years fiddling. And yet after all this time I still have a tendency to do so. It takes me an effort and a half not to bother with or look at the share market or particular share prices.

Best thing ever for me was to purge all the spare cash I had and the same approach will happen when the next dividend goes into the account.

 

can anyone explain the benefit of the wholesale account? no brokerage fees i'm assuming?