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Seeking a bit of guidance

Discussion in 'Beginner's Lounge' started by Apar83, Feb 15, 2020.

  1. Apar83

    Apar83

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    Hi all,
    First time posting.

    I am looking for a bit of advice regarding what would be the best move regarding my holdings. I want to concentrate on investing for future financial freedom.
    I'm 36 years old Car is paid off, no credit cards or personal loans. Just got married and the wife also works full time. So looking to really budget and allocate some for saving for a house deposit and the rest in shares with a more long term outlook.

    I have 3 single company stocks with the ASX over the years.
    1.) Suncorp Limited (SUN)since 2014. Started with $600 got it around the trading price it currently is (approx $12.40). It always goes up $2-3 or so then drops. I have the dividends reinvested DRP.
    Sold a few of the stocks last year when the price was higher to help me when I needed the last bit of extra cash for wedding stuff. Currently, it's $515 worth.

    2.) Accent Group Limited (AX1) Got this when it was formerly RCG, this has performed well. It used to be about $1 when I got $600 worth around late 2016, this company has no DRP but they pay twice a year dividends into bank account.
    Holding grown to $1432

    3.) Telstra TLS got this about late 2017 $600 worth, I got this because I got reading about dividend stocks at that time and made a bit of impulse buy. I just reinvest the dividends in DRP.
    has grown to $1055 worth

    After doing a bit of reading on different sites and looking at things such as Aussie firebug etc.
    I see a lot of people praising ETFs such as vanguard VAS, beta shares A200 and also the more aggressive one VDGH.

    Would it be wise for me to sell one or 2 of my current holdings,
    reinvest those into the 2 ETF's such as VAS/Betashares and another one like VDGH
    Then just keep topping them up with a portion of our incomes into these every quarter or so?

    I currently signed up with self wealth broker due to the really great brokerage fee.

    Any advice is much appreciated.

    Cheers.
     
    frugal.rock and fergee like this.
  2. fergee

    fergee

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    Welcome to ASF :)

    Firstly well done with your investments so far :xyxthumbs

    Putting spare money at regular intervals into the market over a long time horizon, 5+years, is the key imo. ETFs are a great place to do this as they give you easy diversification when using a small amount of capital.

    I think you already have a good plan formulating there and Im sure other members here will give you further guidance and ideas you can consider.
     
    frugal.rock and Bill M like this.
  3. Value Collector

    Value Collector Have courage, and be kind.

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    Hi Apar83,

    When you are starting from a low capital base, the best thing you can do to increase your wealth if increase your weekly savings.

    Focus on savings, for example if you can live off one income and save 100% (or at least 50%) of either yours of your wife's wage you will be able to grow your savings very rapidly.

    Once you have you have your savings accumulating, then the next step is to put it to work in ways it will be protected from inflation and generate income that can be reinvested and create a compound growth explosion.

    To achieve the inflation protection, and income you can invest it in a range of assets including Real estate and businesses, and there are many ways to do this, but the right choice for you will depend on your skill level and the amount of time you want to spend managing it.

    For most people exposure to a local and global index of shares and ownership of their own home, and will provide decent returns over time with minimal fuss.

    I would avoid any complex investment schemes unless you fully understand it, and can explain to your self how the scheme makes money.
     
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  4. Bill M

    Bill M Self Funded Retiree

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    Welcome to the forum. Good words from the members above so far.

    Also, now that you are married look at taxation issues if you have any. Tax is your enemy to saving. The more tax you pay the less you will save.

    You should always look to minimise your tax legally. By that I mean now it's the time to share your tax burdens with your wife. For example if you are earning $91,000 per then you are paying 37% tax plus medicare. However if your wife is only earning $15,000 then it would make sense to put new investments in her name as there is no tax to pay until you hit $18,201. This is important if you get interest or dividend payments as you will pay less or no tax in some circumstances. Here is the ATO Individual Income Tax Rates for 2020. Try to balance out and reduce your combined income tax. Save on tax and put the money towards your investments.

    I've also heard of some micro investing apps that let you can drip feed low amounts of money into investments. I've seen one that charges only $2.50 per Month. You would need to research these as they weren't around when I started out. More info here that may help you. https://www.canstar.com.au/investor-hub/micro-investing/

    Good luck with your journey!
     
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  5. tech/a

    tech/a No Ordinary Duck

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    Good Advice VC and Bill

    I’d like to add some out of the square
    Ideas
    No time right now.
     
  6. Skate

    Skate

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    @Apar83 welcome to our community. We have some of the smartest traders on this site & help is only a question away. All the advice so far is great but I wanted to condense @Value Collector post in one simple picture, study it.

    wealth Capture.JPG

    The graphic is a representation of a wealth creation plan
    Having a trading plan is about creating an extraordinary quality of life, living life on your terms and the graphic somewhat displays what is required to achieve this aspiration. Happiness is really about creating an extraordinary quality of life. Money and financial independence can have a significant effect on everything from our psychology, to our health, to our relationships.

    Read the 'Dump it here thread'
    The 'Dump it here' thread can be found here: https://www.aussiestockforums.com/posts/1005967/
    It's a blatant plug for you to start reading the thread it will explain most question without you even asking.

    Sample post

    Sample Capture.JPG

    My free eBook
    Trading Fundamentals - Skate's Beginners Version eBook
    https://www.aussiestockforums.com/posts/1014728/

    Skate.
     
  7. frugal.rock

    frugal.rock "Time weight's on man"

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    I had thought there was first home owner saving scheme's?
    State or Federal government?

    Advice?
    See a good accountant or financial planner, because from the sounds of it, you are planning for the next 20 to 30 years of your life.
    F.Rock
     
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  8. Apar83

    Apar83

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    Thanks for all the little bits of guidance everyone!
     
    frugal.rock likes this.
  9. tech/a

    tech/a No Ordinary Duck

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    I have tried to simplify a complex topic---it needs to be simple ---it IS simple

    The following will have examples not that I'm suggesting that the examples used are
    right for you or anyone. But When I was where you are I heard most of what Im about
    to post but didn't know what I should do with it or how to best use it. I found MY WAY

    (1) Capitalization
    (2) Compounding Multiplication
    (3) Leverage
    (4) Opportunity
    (5) Risk.



    Capitalization

    Money makes money

    We've all heard this adage.
    Sad fact of life is the more you have the more you can get
    So as a few have mentioned you need to form a base and to
    do that we "Generally" start with selling our skills for an Hourly rate.
    Educated or uneducated skill.

    The aim is to have surplus and the more we have the quicker we get to
    being able to move forward financially. With this trade off of Time for $s
    the power of one and perhaps 2 with a partner is limited.

    This leads us to (2)

    Compounding (Multiplication).

    As this post progresses you'll see me come back to this very powerful tool.
    Lets start with the basics.
    How do you earn more

    * Get paid more
    * Work more hours --2 jobs etc
    * Duplicate, then Duplicate again your expertise.

    Again generally you'll need to be doing something where your NOT working for
    an employer.
    Lets say Im a masseuse---I can do 6 a day at $90 an hr. 4 Days a week.
    I set up a small practice with Mobile Masseuses and take $30 from each
    massage I book for my team So If I have 5 others I can make $150 an Hour
    on top of my $90/Hr. for every hour I have booked . $30 for just one.

    * Hairdresser similar
    * Lawn mower man
    * pool cleaner
    * Handyman

    List is endless.

    Leverage

    Now that we have surplus we can Multiply with the help of other peoples money
    They give it to us Cheaply and If we use it wisely we can now Buy stuff to COMPOUND or MULTIPLY

    BANKS

    I own Excavators ---a lot of them. I learnt a long time ago that People will pay $150 to $250 an hour
    for these with a cost of around $80 an Hr to Employ someone and run them.
    THEN
    I discovered that If I added an attachment to these machines not only would they be in more demand
    but a $20K attachment bought the Hourly rate up from $150- $250 to $230 to $330/Hr and STILL
    the same costs to run and operate. (Rock Breakers and Drill Pile Rigs).
    So Back to (2) Keep doing more of the same Build the business and they will come/They came!
    which adds to (1) and makes more of (2) available.

    Houses Same Principle.
    Lend at 3% get a capital gain on the property of 5% on 20% down Im getting 10% on my investment
    if its 7% then its 25%
    If I do it 3 times its getting serious if I do it 10-20 times its very serious.

    Here the benefit is using OTHER PEOPLES money they only want the interest and you take the
    CAPITAL gain on THEIR MONEY!


    Opportunity

    You can now actively continue to search out opportunity with the skill needed to take advantage of any
    perceived
    opportunity you may identify.
    What ever that maybe---often its not an opportunity to others.

    EG Back when----

    * Bit coin
    * Gold at $250 an once
    * Stock Market when Trump came into power
    * Amazon
    * Tesla
    * Cochlear
    * The Housing boom
    * The Tech Boom.

    The list again is endless and growing.

    Opportunity in itself is worthless UNLESS
    (1) You can Identify it
    (2) You understand how to take advantage of it.
    (3) You actually DO IT

    Once your here you have a basic grasp of

    RISK

    The fear of loss is the single most prevalent reason people do nothing
    even if they see Opportunity standing in front of them screaming!
    Behind Capitalization. Back when I was buying houses as quick as Banks would
    make funds available pretty well all my friends thought I was Crazy.

    To me if other people paid all my costs and the bank didn't want any of my capital
    gain---I thought the Banks were Nuts.
    My Office manager bought 3 and a builder mate started Building 1 for one.
    1 for a client and at the same time one for him. Still does but more for him.

    The other friend I had did nothing!!---Sorry humor--sad!

    There is much written on Risk.
    With my excavators I looked and look at it this way. $150-200K to buy
    If all turns to crap A direct cost of say $30K in any one year as they are worth
    around $30K less. Thats around 3 weeks of work.
    Low risk in my view plus Ill get a tax deduction so more likely nothing!

    Every opportunity will have a different way of handling its perceived RISK.
    Find it and Apply it.
    If you have to use it--USE IT.

    There is endless opportunity out there
    Start at one and work to 5

    Go and build your empire and only look
    back in reflection NEVER regret.









     
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  10. frugal.rock

    frugal.rock "Time weight's on man"

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    Thanks Tech.
    Your post is really what I needed.

    You have awoken memories of missed opportunities... considered getting a non destructive dig truck/suc vac truck... not as attractive as diggers though.
    Your diggers would probably be on hire for a week minimum? average, suc trucks are usually just a day.

    Time to brush up on some ideas again.
    Thanks again.
    F.Rock
     
  11. MovingAverage

    MovingAverage Smoke me a kipper

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    Call me old fashioned, but before even talking about things like ETFs or any other instruments...one should be very clear about their appetite for risk, time frame and objectives. IMHO until this is clear discussing things like ETFs or any other financial instrument will be misguided.
     
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