What to do? - 15 year time frame

Discussion in 'Share Investing Strategies, Theories & Education' started by Hosko, 20th Jan, 2019.

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  1. Hosko

    Hosko Well-Known Member

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    Morning all, Thought I would sound out the brains trust on here with much more experience than I.
    Situation is that I have $5k for each kid (2 of) to put away for when they turn 20'ish (depends on how the next 15 years go).
    Plan is to put the money somewhere and not touch it, reinvest all the earnings/divi's.
    For simplicity it would be put in the wifes name, pay a bit of tax on the way through and then give the kids a nice little deposit for uni/car/house.

    I read about ETF's and LIC's but can't quite commit either way at the moment. The other scenario that is getting serious consideration is one or two direct shares (banks look juicy around 10% grossed up for example at the moment). I'm yet to be convinced even if the wrong stock is picked, if it is a safe stack and still there in 15 years it will have done OK. Maybe not as well as the top stock which only hindsight can tell us was the right one, but well enough that the initial funds are still there.
    Have had some money in YMAX for 3 years and this hasn't been the greatest decision at the moment.
    Happy to have any feedback and answer any questions.
     
  2. Froxy

    Froxy Well-Known Member

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    I have been looking also. Genlife do investment bonds. 30% max tax rate and no capital gains when investment transfers to your kids. Vanguard high growth fee is 0.69% which is lower the vanguard directly. You maintain control of the asset and transfer at your discretion. Their are some rules that revolve around them but worth researching.
     
  3. SatayKing

    SatayKing Well-Known Member

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  4. Islay

    Islay Well-Known Member

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    I understand where you are coming from here. We got lucky with CBA shares. We bought when they listed the first half of cba in 1991 for $5.40 and again in 1993 when they floated the 2nd half of cba for $9.35. This was the beginning of our share investment journey. We reinvested dividends and added during the gfc but those cba shares have paid for 4 degrees, 2 small cheap cars and contributed to one house deposit so far.
     
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  5. Zenith Chaos

    Zenith Chaos Well-Known Member

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    If you're going to take risk, you need to receive an appropriate reward.

    Assuming you have considered all tax implications......

    You could buy $5k in bonds. Low risk, low reward.

    You could buy $5k in a200. Medium risk over 15 years but you will be rewarded with the market return.

    You could buy $5k in CBA. Higher risk but if dividends can be maintained and there are no drastic changes in the next 15 years then definitely a better return.

    I believe the gurus on this forum may be able to provide better guidance for you on the risk levels over 15 years for these types of investments.
     
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  6. Hosko

    Hosko Well-Known Member

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  7. Hosko

    Hosko Well-Known Member

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    This is what I'm seeking! Which is the next one that will get lucky?
    Seriously, well done.
     
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  8. The Falcon

    The Falcon Well-Known Member

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    @Hosko do you have a family trust, and if not what do you expect your wife’s income to look like in 15 years?
     
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  9. Fargo

    Fargo Well-Known Member

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    Why are you investing for dividends that have a 3 month time frame for returns, when you have a 15 year time frame ? If you want to grow wealth you need growth shares. If you know nothing and want set and forget and exposure to the biggest, most successful and greatest companies in the world run by the smartest people, with easy simple access and administration, it is hard to go past NDQ on the ASX. You may want to take a smaller position with ASIA to get exposure to the " Asian TIger" with Some big Asian tech companies which is balanced with smaller tech companies with high growth potential. Then you shouldnt go far wrong.
     
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  10. Coconutwheels

    Coconutwheels Well-Known Member

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    We did the same thing for our kids with the baby bonus, 2008 about $6k into VAS retail fund, and again in 2012 for our second born. In wife's name, two seperate accounts in trust for each child.

    Dividend reinvestment Set and forgotten....long ago......except when I print the annual statements each year, which might as well be in another language.

    Sometime I might go years without even checking the balances, easy as, and pretty bloody good returns for no thought or work.
     
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  11. Hosko

    Hosko Well-Known Member

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    Wife’s income is anticipated to be somewhere around the national median.
    And no family trust. Why do you ask?
     
  12. Hosko

    Hosko Well-Known Member

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    Why? Ignorance perhaps. A 10% return annually on the basis that the underlying unit price stays similar to buy in couldn’t be a bad thing over 15 years.......
    Hindsight is wonderful.
    Will have a look at NDQ
     
  13. Hosko

    Hosko Well-Known Member

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    Thanks, good to know that it works
     
  14. Islay

    Islay Well-Known Member

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    Thanks but it was pure dumb luck. I guess I was just saying if you invest early enough reinvestment and time works it’s magic. Good luck to you
     
  15. willair

    willair Well-Known Member Premium Member

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    That sounds like a good plan as 15 years goes very quickly..

    We did something like this in the early mid 1990's ,bought into several one of those was CBA ,thinking back I put in the tender forms for 1500 CBA units paid the deposit ,we only got 950 ..I reinvested every div from 1995 and as I always wanted my name in the back section of the yearly report where there is a few pages of who owns what,any stand alone investor that has control over 5000 units their name will be on the list and my name with 2 more DRP instalments my name would have been on the list,but after reading the risk manage team failure the div's 2 times a year now go into the bank account..Plus I bought into again several times from just above $67--$70 over the past six months so the 5000plus dream is complete.

    Cba was a success,the same as the other 5 banks I invest in--now looking at the office wall at several massive failures that I have framed just to remind myself of the margin of safety theory ..Fosters was one and several start-ups then went nowhere all bar CPH that I bought one morning for 13 cents and went to above $1--70 with the way the media and rapid stock market fluctuations work …

    Mistakes I have made was putting our daughters names on those HIN'S ,buts that's all sorted now..

    The only none advice I can give is 15 years goes very quickly ,and over that 15 years you will question your investments many times ,the trick is have a plan and stick to the plan,btw if I was starting over again the first cab off the rank would be CBA as the cut off period is in a few weeks and the divs will show up in the accounts in a few weeks after that..good luck ..
     
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  16. inertia

    inertia Well-Known Member

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    I am looking into this for my kids, and while I need to seek some advice on structure, I like the concept of AFI dividend bonus scheme. It means you dont need to worry about income, just capital gain. I'm trying to figure out if it is worth buying in a trust for the kids (as they are not able to hold in their own name under 18yo).

    cheers,
    Inertia.
     
  17. Hosko

    Hosko Well-Known Member

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    Thanks for all the input so far it's really appreciated
     
  18. KinG3o0o

    KinG3o0o Well-Known Member

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    tax for children is crazy in australia. the threshold is $400 ish.

    if you buy 10k worth of shares thats 5% dividend.. the rate is 68%.
    if you gonna hold in ur name or wife name.. i would just do as normal and hand them what you want 15 years down the road..

    also your investing 10k total.. unless your already a ultra-high income earner, or have things in place for trust etc etc.

    is anything else apart buying simple in your name or wife name worth it ?
    i would keep it simple.
     
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  19. Hosko

    Hosko Well-Known Member

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    Yep, definitely looking for simple for this piece of investing. Set it then don't touch it for a few years.
    Just not sure yet to go onto a single/couple of stocks or down the ETF/LIC path.
     
  20. Hosko

    Hosko Well-Known Member

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    150 units of CBA doesn't sound like much until I open the envelope in 15 year to find that I now own 400 eh?
    The massive failures, were these what might be considered blue chip at the time or were they spec plays?