First time investor - advice needed!

[pokerdub]

I just discovered this forum and i gotta say- its awesome! Lots of good discussion in the stickies for newbies like me.

I've summarized my current info below , i'm basically looking to get into investing and am wondering what percentage of my income i should put into shares and how much to put into my mortgage.

I have started to do a little reading and have been thinking about putting my money into the SPDR S&P/ASX 200 Fund (ETF).

Any advice/questions welcome!

Amount to invest now: 5k (should have 40k by the end of the year)
Risk Tolerance: highish?
Timeframe for investment: Longterm
Debt: 315k mortgage ( paying ~7% interest) for apartment which i am renting out for 1600 per month.

 

[sam76]

Re: First time investor- advice needed!

No one can give you advice, mate.

 

[SmellyTerror]

Re: First time investor- advice needed!

3. Thou shalt not ask for, nor offer, specific financial advice.

This means you are not permitted to ask others how to invest your funds, nor can anyone advise someone else how to invest theirs. You may not refer to a stock as a "buy" or a "sell" nor can you "recommend" a stock in any way.

...so, taking out the numbers from your post, and to give general advice: how much can you expect to make in your chosen investment? History is worth a look, but remember that the next couple of months is probably going to be pretty evil.

Point being: money on your mortgage is effectively earning 6.5% (or whatever your mortgage rate is) - TAX FREE. So you need to earn quite a bit more than that over the long term to justify having the money in another investment, and more again to justify putting your money in something that's riskier than a house.

If you're taxed at 40%, you need to make around 11% just to break even. Can you make 11% on your chosen investment? And how much more do you need to make to justify the risk? Can you make that, too?

Something that might help: Check with a tax advisor, but the ATO phone monkeys tell me that money taken off your home loan to invest is tax deductible - that is, if you use a re-draw facility or extend your mortgage to put money into something that'll earn money, the interest payments on that part of the loan is tax deductible. That'll help the numbers a bit, if you can do that (they told us we just needed to park the money on the loan for a day, then re-draw it off to claim it - but really, check with a tax advisor).

So run the numbers, is my advice. See if it's worth doing.

Then you won't need to ask the forum.

 

[prawn_86]

Re: First time investor- advice needed!

As per what Sam said it is againt the ASIC regulations for unlicensed people to give financial advice.

This thread has been closed, but please use the search function to find out about ETF's and any other questions you may have