What to do with $200 000 cash?

May as well throw in VAS & VGS

Vanguard Australian Shares Index

Vanguard MSCI Index International Shares ETF

Note that VGS was listed on the ASX in November 2014 and VAS in May 2009.

 

Yes - if dividends are paid.

And my wide had no other income - so we claimed the imputation credits back and compounded! (i.e The tax previously paid within the company.)

 

Good on you mate!

Have you looked into property development trusts, some companies are paying 10-12% pa for a 2 years term, which might be a good option.

Hope this helps, just my opinion

 

I did something similar back in 2017 as drew equity from offset and parked 6 figure amount in managed funds (50:50 AU:OS split). Made decent 10% annual return until Covid hit. Plan was to double down and had dry powder to deploy. However, it is one thing to have a plan and other to take action when 3 years of gains (& more) evaporate in 3 months, and super takes a sizeable hit too. Long story short, I divested at worst possible time (Mar 20) at small profit but built a smaller unlevered share portfolio. Was able to catch up to $ gain (tracking funds), flipside is portfolio mix is riskier but have no leverage - helps me sleep better at night!

Not trying to discourage you but make sure your mindset and strategy are aligned, plus you are ready for downside risk in case they materialise.

 

Every. Single. Time.

Quoting price index vs total return index should be “Ban-able” offence.

 

Okay so we just signed up for a self wealth account and once that's approved we will start slowly putting some money into VAS and VSG. And if it goes down 20% tomorrow and I have to wait ten years for a return then it is what it is.

Thanks for all the help!

 

Do you understand the point of dollar cost averaging? If you are doing that, you WANT it to fall tomorrow.

 

Refinance PPOR, Pay down with cash & then tap into equity if wanting to reinvest.... but I'm a simpleton.

 

Nah I'm maxed out with what I can borrow with my current serviceability.

 

I think you will do just fine.

Posted these screenshots before, and deserves a re-post. (Not saying you need to keep your money in the stock market for 100+ years, but the general direction is .. up).

 

I was going to suggest buying a HQ Monaro and parking it in your garage.

if it’s value drops 20 % you can take it out and smoke the tyres. Try doing that with an average financial portfolio lol.

 

I think you are asking how to get a better ROE. and need more income to give access to your otherwise useless equity, as well as cover higher interest rates. . You should consider Umax similiar to VGS, but you forfeit some upside for some downside protection because of call options which will give you income instead of all the CG, about 5% currently. Other shares that are giving good dividends are SUL, SIQ ADH, and HVN, 9-10% grossed up. Telstra 5.8 grossed up. AZJ 8%, APA 5.7% ,AX1 4.3 RFF 4% Beware of the yeild trap. Dont price anchor ,biggest and most costly mistake investors make. An investment should take you where you want to go. In 2,5 years by july 2024, you may find with lower LVR's, higher rent and a little extra income from shares, you can pull out way more equity than any fall in share price, and with a bit of luck the share price will have fallen, so you can double or tripple your holdings at prices that give good yeilds and growth, so you can pull out more equity in 2 more years, perhaps buying another house first for cash first.

 

Yep. It is somewhat annoying.

And the only ETF of which I am aware which did not pay a distribution during the GFC period was the SPDR property index and that was only for one distribution if I remember correctly. The A-REITs themselves didn't do so well I understand.

Sure it's possible it could happen again - and probably will.

Cannot be bothered going further on this as it starts to get into the trading v investing argument.

 

mines in the repair shop, seems to be broken....

 

Haha, most only give a distorted image, often lead to wrong predictions... If only someone had told me Covid was coming, and the share market would rise madly despite Trump + Covid and the USA had more Covid deaths than the two world wars added up. I would have invested my shirt and undies and leveraged to the brink.

 

Just wondering how regular are you planning to put money into Vanguard?

I'm in a similar situation but found out that Vanguard charges $9 per transaction for shares.

I'm also eager to not dump all my money into vanguard on one time, and rather regularly invest (eg a couple of hundred a day or week or whatever amount) rather than 50k in one go for eg.

But just cautious about the $9 transaction fee

 

I know the managed funds (?) don't have transaction fees but the costs are more expensive? I was thinking of going for the funds which were cheapest (eg 0.1% fee) but with no one off transaction fees

 

I wouldn't dare nor have the time to buy every week. Here you go, someone posted this before, to get an idea of the balance of how much and transaction costs.

Investment Frequency Calculator

Investing in ETFs and LICs should be boring but consistent.

 

I was thinking of spreading it out over 12 months. $5k in vgs and $5k in vas each month. That would be $120k invested and I can hold onto 80k offsetting the 3.1% variable interest rate on the homeloan and that can be my quick access cash if needed and what I invested in the stock market can just stay there for 10+ years.

 

What do people think of the ethical conscious equivalents that Vanguard offers. VETH and VESG?