My strategy/plan going forward

[rolly1]

If I'm on a 60k salary, the marginal tax rate would be 32.5% right?

Close it's 34.5% so any additional income earned above your salary is taxed at 34.5%. Close to nothing though if it's a fully franked dividend.

 

[Dona Ferentes]

Australian income tax rates for 2024–25 onwards (residents)

Income thresholds	Rate
$18,201 – $45,000	16%
$45,001 – $135,000	30%
$135,001 – $190,000	37%
$190,001 and over	45%

...plus Medicare

 

[rolly1]

Yea my bad soz just copied the top hit on Google search.
"If you make $60,000 a year living in Australia, you will be taxed $11,167. That means that your net pay will be $48,833 per year, or $4,069 per month. Your average tax rate is 18.6% and your marginal tax rate is 34.5%. This marginal tax rate means that your immediate additional income will be taxed at this rate."

 

[RbNEO]

Close it's 34.5% so any additional income earned above your salary is taxed at 34.5%. Close to nothing though if it's a fully franked dividend.

Ah ok, thanks!

 

[ShareSuccess]

I'm still confused, on how I'm going to invest in the s&p 500 if I'm facing FX risk (isn't it unavoidable because I'm trading foreign stocks?) and if I'm keeping 'everything local'

G'day Just Been reading the Beginning of your journey!.....Wise thoughts you are having, just thought i would mention that as stated by others the FX can and will work Both ways depending on Currency Fluctuations, but it's nothing to worry about & has actually worked in my favour on STAKE.....Great little site should you wish to trade/buy in the U.S markets and as mention only $3 per Trade & a Very simple site to use!

Good Luck!

 

[ShareSuccess]

Bit of an update. I did some research and called up my super and read the documents. I noticed I can invest in the IVV but only up to 50% of my portfolio in what's called "choiceplus" where I can manage my own investments but to a certain degree. So that forces me to invest in other products that are available there so I don't just have cash sitting around then deciding how much money I am going to invest outside of super.

I had some questions:

1) If I had one main index fund that I was going to invest in, what am I investing outside of my super besides property in the future? I was ideally looking to invest 80% of my portfolio in the IVV index but I can't do that now.

The idea I had was to invest some outside my super but didn't know if this was a silly idea to invest in the same index fund outside my super when I'm getting tax benefits already by investing inside, but at the same time investing outside means that I have easier access to my money in the future. The only thing I can think of is investing in international stocks outside my super because my super only offers Australian shares to invest in.

2) An extension of question 1, but is there really another point in investing in another index fund like the asx200 if in the future if the market crashes, IVV tracker will crash as well? I get diversity, but isn't one index fund diverse on its own? Or maybe it's worth investing in an international index fund like the VEU tracker? I hate this idea though because now I'm double up in broker fees, not even taking into account shares investing

3) This might be a stupid question (I'm probably overthinking this) but with Hostplus they charge a $15 fee per trade, I guess this doesn't really matter that much right considering every time I invest in the future that money in theory will be worth significantly more + the tax benefits?

4) I was thinking of leaving individual stock picking outside of my portfolio as this gives me some flexibility in the future to easily withdraw my money if needed + can invest in international stocks. (I've attached an image of what it could look like)View attachment 196122

5) In terms of the split, let's say I invest $500 every month into my portfolio, I was thinking of doing a 80/20 split, I'm happy with 80% of the money being in super, and having access to 20% incase I need it before retirement. Any recommendations here or this is purely a personal preference? One downside I see here is that since $500 is a low investment per month, I'm going to spread myself too thin and leave myself open to paying more broker fees. Or I can consolidate for now and once I have $1,500-$2,000 to invest monthly to invest outside super

6) I'm thinking of changing my investing frequency from monthly to quarterly, as if I invest monthly I'll be paying $180 in broker fees every year x 38 years = $6,840 (this is the minimum if I just invest in the ivv index not taking anything else into account), though I keep thinking that it will pay off in the long run but I'm having trouble crunching the numbers in terms if I'll make more money if I invest monthly versus quarterly if the amount of money I invest in is the same amount.

Here are some tables I produced with chatGPT the returns are similar but I save a lot of money on broker fees if I invest quarterly and it seems to be a perfect balance between compounding and making money (please let me know if I'm missing anything)
View attachment 196255
View attachment 196256
View attachment 196257
View attachment 196260

Sorry that was a mouthful, but almost there!

If i could make 1 Small suggestion that would be to NOT make things too Complicated as investing can be very simple & as Hard as the Data we collect in the hope of predicting the future!

A simple, but Very Powerful book Suggestion: One up on wall Street by Peter Lynch

 

[ShareSuccess]

Yep, known about compounding for a while but for some reason I didn't open a high interest savings account earlier, not sure why when I knew about it. I feel a bit silly for that lol. Currently it's earning 5.5% per annum.

DRP is something I'll need to look into a bit more, I keep coming across new things which is sort of paralysing my strategy but will just keep going and adjust as I go. I've been crunching some numbers and I realised the principle is simple. The more you invest and the more frequently you invest, the more money you make regardless of broker fees. So this is what my investment strategy roughly looks like so far:

- Invest $1,500 every 3-4 months as opposed to monthly (as from what I have researched, even over the long-term I don't lose that much in compounding, I just need to figure out if I lose more potential money in that compounding effect versus saving money on broker fees, seems to be almost negligible at first glance)

- Invest that amount in Super strictly for now across 1-2 etf's and the rest in stocks

- Invest in international stocks with an outside broker like IBKR

- Salary sacrifice for my super so I am contributing a bit extra and add a bit more money for my retirement (will do this once my salary increases)

Broker fees will roughly be $6,840 over 38 years assuming I invest quarterly at $15 per trade across 3 different investments ($45 broker fee in total)

DRP is something I'll need to look into a bit more, I keep coming across new things which is sort of paralysing my strategy but will just keep going and adjust as I go. I've been crunching some numbers and I realised the principle is simple. The more you invest and the more frequently you invest, the more money you make regardless of broker fees. So this is what my investment strategy roughly looks like so far:

Each to their own, but Personally i do not use the DRIP as i Prefer to be Patient & wait for Corrections to buy more shares at a Lower price thus increasing my yield on Cost.

 

[divs4ever]

Each to their own, but Personally i do not use the DRIP as i Prefer to be Patient & wait for Corrections to buy more shares at a Lower price thus increasing my yield on Cost.

i use DRP ( DRIP ) selectively not on every share and some stocks don't offer a DRP in addition

in my early investing days i would have participated in the DRP but they didn't introduce one until recently , since now i am retired a BHP DRP is not in my best interests

i suspect in the foreseeable future i will exit some DRPs so i receive extra cash income