General Advice.

Discussion in 'Share Investing Strategies, Theories & Education' started by shouldisell, 22nd May, 2007.

Join Australia's most dynamic and respected property investment community
  1. perky

    perky Well-Known Member

    Joined:
    1st Jul, 2015
    Posts:
    248
    Location:
    Sydney

    This is the site that is being referred to - Navra Financial Services
    Unfortunately it doesn't look like there are any Melbourne courses on the horizon.
    I attended the course several years ago , and found it to be the best value for money course I have ever done.
    Steve is quite charismatic , and he has a lot of clients on this website here at invested.
    Steve will basically talk about shares , property and recognising when their value is at its best (in a nutshell) . Naturally he will talk about his managed fund - but it does have the runs on the board over the last 4 years with returns of around 20% each year - which is quite good for a conservative managed fund.
    When I was 21, I bought my first Investment property - so defintely you should aim to get one in Melbourne at some point. Just make sure you do your research thoroughly before you do so.
    Also try to attend a Melbourne investor meeting through the Somersoft website - such as this. You can meet some people who reside on this forum over at that forum as well - next meeting is here. If you lived in Sydney I would say come to one of ours , I am planning the next one probably early July...anyway good luck and well done for having the foresight to be here on this board !!
     
  2. bundy1964

    bundy1964 Well-Known Member

    Joined:
    1st Jul, 2015
    Posts:
    345
    Location:
    Adelaide, SA
    Managed funds are a simple start to get a foot in the door.

    Super is great if your going to work till your 65, I semi retired at 32 so I am not a super fan boy.

    Cash should be avilable with a week or two notice, recomended time frame is 3-5 years.

    I think some will let you add $200 via Bpay most common is $500 or $1000 minimum.

    I find it is a 2 way street you ask and we think and find some things that help ourselves too or confirm we are on the right path. Just wish we had the tools and products we have now 20 odd years ago.
     
  3. shouldisell

    shouldisell Well-Known Member

    Joined:
    16th Jun, 2019
    Posts:
    348
    Location:
    melbourne
    Thanks guys, I'm learning alot just from your replies.

    Let's say, hypothetically, that I decided to invest into a managed fund.
    What would be the typical process, step by step, I would have to go through?

    With $10,000, would it be wise to put it all into one fund? Or 'diversify'?


    Also, if super is just like putting money into a managed fund (except that I can't get to it), what would be the difference if I just put it into a fund which I had more control over?


    :D - Cheers.
     
  4. bundy1964

    bundy1964 Well-Known Member

    Joined:
    1st Jul, 2015
    Posts:
    345
    Location:
    Adelaide, SA
    Find a discount broker and sign up with them. Investsmart is my choice.

    Find a fund they deal in that suits what you want and request/download a prospectus.

    Read and fill in the form and send it in with your cheque/direct deposit. Decide if you want to reinvest the income or get paid in cash.

    Wait for your statement.

    One fund I would think unless you go into a margin loan, you can choose a multi sector fund but their returns from a quick look arn't worth it compaired to your other options in single sector funds.

    Similar but the tax position is a lot differant. Super is low taxed and doesn't add to your taxable income and you get tax breaks for your contributions. Managed funds add the income to your taxable income each year, you do get tax credits from most Australian based share funds, you can borrow against most of them and if you decide it's time to finish work you can withdraw the funds when you want to.
     
  5. Simon

    Simon Well-Known Member

    Joined:
    23rd Jun, 2015
    Posts:
    507
    Location:
    Newcastle
    If you decide to choose a fund based on historical performance then choose the longest term possible - 5yrs plus.

    Searching for the last 12 month's best earners is almost guaranteed to get a substandard result!

    Some even theorise that choosing the worst earners will give a better result in the last years best earners but I haven't researched that - NOT ADVICE!!!
     
  6. spider

    spider Well-Known Member

    Joined:
    22nd Jun, 2015
    Posts:
    115
    Location:
    sydney
    Margins

    Me too. Can someone explain what happens with a Margin Loan if I pay interest in advance. Obviously it has to be a fixed rate for 12 months but what happens if I place some funds into the account and want the margin loan lender to met those funds for further investing. Does that part of the loan then become capitalised/paid each month or do I have to set up a new loan?

    Thanks in advance...
     
  7. bundy1964

    bundy1964 Well-Known Member

    Joined:
    1st Jul, 2015
    Posts:
    345
    Location:
    Adelaide, SA
    I would think the quick and easy way would be to capitalise the interest on any further borrowing until your fixed interest period ends then roll the total amount over if you still like fixed interest. No need to set up a new loan.
     
  8. Simon

    Simon Well-Known Member

    Joined:
    23rd Jun, 2015
    Posts:
    507
    Location:
    Newcastle
    Yes it just raises the loan size and you either pay it or let it add up in the loan - assuming you have sufficient security!
     
  9. shouldisell

    shouldisell Well-Known Member

    Joined:
    16th Jun, 2019
    Posts:
    348
    Location:
    melbourne
    Can someone give a brief outline of how margin loans work?
     
  10. Simon

    Simon Well-Known Member

    Joined:
    23rd Jun, 2015
    Posts:
    507
    Location:
    Newcastle
    A margin loan is like a credit card. You get a limit which is based upon the value of the shares you hold - the margin lender takes them as security (like a mortgage) and lends you 0-75% of the value. Some shares are too volatile and the safer ones get the higher value. BHP, ANZ etc are the safe sorts!

    eg You have $25 000 worth of quality shares. The margin lender takes security over them and gives you a loan with a set limit depending upon the strength of the underlying shares you started with.

    You can then purchase more shares with this money.

    If the price of the shares drops too much so that you now have a loan greater than 75% of the portfolio value the lender will ask for some more cash or will sell some of the shares to adjust the loan size - this is called a margin call.

    I personally keep my loan to 50% of my share portfolio. This means I have space if the share price drops. Many of my investing friends do the same. ie if you start with $20K and borrow $20K you will have a 50% loan.

    So if you went in with your $20000 worth of shares and open a margin loan you will pay no interest until you actually draw funds (like a credit card). As you draw the funds your account will start accruing interest. Some people pay the interest early, some pay it monthly and some don't pay it but let it add up.

    This is a very basic explanation and I am sure you will find better info online. try Australian Securities Exchange - Stock Market Information, Stock Quotes - ASX

    Cheers,
     
  11. spider

    spider Well-Known Member

    Joined:
    22nd Jun, 2015
    Posts:
    115
    Location:
    sydney
    apportioning a home loan

    Thanks Simon & Bundy1964. While I am on a roll, I am endeavouring to pay off my PPOR asap and am about to put my share dividends onto my home loan with St George. Can anyone tell me how I can apportion the loan, for eg if I receive $20K in distributions, put that on the loan and then redraw the amount for the share fund, how can I for tax purposes apportion the loan. Obviously, I will have a trail. Do I just take my paperwork to my accountant and say "this part should be tax deductible"? I live in Sydney and my loan is in the $$$$$ as you can't buy a tent here under $250K, so it will be a slow old process.

    Thanks
     
  12. bundy1964

    bundy1964 Well-Known Member

    Joined:
    1st Jul, 2015
    Posts:
    345
    Location:
    Adelaide, SA
    I think with SGB you would be looking at a Portfolio Loan which will give you sub accounts to use for investment purposes. Gives you a clear paper trail.

    If you do a standard redraw it gets messy working out how much to claim.
     
  13. spider

    spider Well-Known Member

    Joined:
    22nd Jun, 2015
    Posts:
    115
    Location:
    sydney
    Loans

    Thanks, Bundy1964. I suppose I can contact SGB and ask them for a split . I'll also google SGB and look into a portfolio loan

    Cheers and beers
     
  14. bundy1964

    bundy1964 Well-Known Member

    Joined:
    1st Jul, 2015
    Posts:
    345
    Location:
    Adelaide, SA
  15. learning

    learning Member

    Joined:
    1st Jul, 2015
    Posts:
    20
    Location:
    WA
    So if you capitalise and preypay a years worth of interest in advance, would the interest you pay on the capitalised interest be tax deductable?
     
  16. spider

    spider Well-Known Member

    Joined:
    22nd Jun, 2015
    Posts:
    115
    Location:
    sydney
    Interest in advance

    My understanding is yes. That year's interest plus the interest in advance would be tax deductible. Watch the slap in the face at the end though, when the merry go round stops there will be no tax deduction for that year.