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Hello from an ULTRA newbie :)

Discussion in 'Introductions' started by Holls7, 2nd Apr, 2009.

  1. Holls7

    Holls7 New Member

    Joined:
    25th Feb, 2009
    Posts:
    2
    Location:
    Mildura, Vic
    Hello to all. My name is Holly, or Holl as I'm otherwise known.

    I'd like to say "thank you" in advance for the great forum. Have already started trying to locate information which is helpful to my situation and goals. There is a "wealth" of great information, plus I see many knowledgeable and experienced persons frequenting the boards which is reassuring.

    I live in NW Victoria, am a full-time mother of 2 boys (8 years and 18 months), work part-time as a Registered Nurse (gross about $24000) and my husband works in a Management position in transport (gross is just >$60000). My knowledge of investing is limited, so I am trying everything I can (joined this forum, am doing online education with the ASX website, reading everything I can get my hands on) to build my knowledge base, save money to buy a house, build an emergency fund and an investment portfolio... Generally, I manage ALL the household finances. My husband isn't as interested in the subjest as I am and is happy to help out, but has pretty much left it up to me. :( I have tightened the budget so much, that the internet is our only luxury and we're fine with that because our focus is on finacial growth and not material "stuff". We now live frugally and are enjoying it, for now.

    Due to an unfortuanate and long run of poor health (thankfully no longer an issue) and bad luck (inheritted debt from deceased in-laws and a drug addicted brother-in-law who we thankfully no longer have any obligation to or contact with), our resources are significantly depleated. The time has never been better and I don't ever see it getting any worse than we have already weathered and survived. No, hang on, we are THRIVING!!! ;) The past is being left firmly behind so we can finally build a secure life together as a family. :cool:

    Currenly, we have:
    - no debt :D (wouldn't mind debt for he right things/reasons)
    - saving $350 per week :)
    - have >$6000 in savings so far

    Did have some shares that needed to be sold towards the end of our bad run to pay some large and unexpected bills/expenses. Didn't want to sell them, but we did sell them when they were up ;) which is at least something positive. Some of the money is left (part of the $6000 is what is left from the shares sold). We are VERY ready to move on up!

    My plan is to:
    - reinvest in some quality shares ASAP
    - save enough to buy a house and
    - keep some money aside to start building up another emergency fund.
    - invest in more shares and property once enough equity is gained in my house.

    Property where I live, is amongst the most affordable in the country!! So there is hope. You can buy a decent house for $190,000 - $220,000. Or new 3br for about $220,000 as house and land package. We are not elligible for the first home owners grant as my husband made the mistake of helping his brother buy a house before I met him. Not to worry, we can do it.

    Any suggestions on how I can acheive this quickly, or a better plan are very welcome!
     
  2. Jacque

    Jacque Team InvestEd

    Joined:
    16th Jun, 2005
    Posts:
    1,885
    Location:
    Sydney
    Hi Holl

    Sounds as though you're committed to changing your circumstances, which is a great start- well done!

    I would suggest that you begin with your first PPOR. At low prices and income sufficient to support repayments you're in a great environment to do this, as well as providing long term security for your family- something that home ownership brings vs renting.

    Keep saving, plan to buy and do your research into the current market.

    There are lots of experienced investors besides myself who'll be happy to provide recommendations but mindset is the most important factor when it comes to investing, so welcome to the club! Keep asking questions and welcome to the forum :)
     
  3. Holls7

    Holls7 New Member

    Joined:
    25th Feb, 2009
    Posts:
    2
    Location:
    Mildura, Vic
    Thank you

    We truely believe we will own our home outright, within 10 years be on the way to building an investment portfolio :) This is a very exciting time for us. It's like we are already in our own house and are researching investment properties. We can smell it, just not touch it yet! ;) Only a matter of time.

    We are expecting a conservatively estimated tax return of around $7,000-10,000 (possibly more) this year, based on advice from our accountant (he's been a friend as well as our accountant for nearly 10 years). PLUS, my income will more than double (might treble or more) over the next couple of years when I start working more than 24 hours per ftn again. Should I use the extra money to invest in hares, top up my emergency fund, or help us get into our PPOR faster.

    I know I need a minimum of around $40,000 for a deposit to avoid paying for mortgage insurance, plus legals and that I'm a way off of that. However, my parents did a deal a year or 2 back where they said that they will match our savings 1:1. Now the trick is to get them to honour it ;). In about 11 months, we will have saved about $20,000 so we could be looking to buy then, but...

    If they don't honour their promise, what should I do with the money I am saving in the mean time? Should I leave it in iSaver, or invest in a managed fund or shares? Just not quite sure which is best. What I do know, is that the length of time I intend to invest, will affect the suitablity of certain types of investment method. So, if we have to do it without help, it'll be about 2 years (but less than 3) and with help, only 11 months.
     
    Last edited by a moderator: 2nd Apr, 2009
  4. Simon Hampel

    Simon Hampel Co-founder Staff Member

    Joined:
    9th Jun, 2005
    Posts:
    4,619
    Location:
    Sydney, Australia
    My view is that if you are looking to buy in a couple of years, then cash in the bank is the best place for the money. It's just too risky (and demoralising) in my opinion, to invest that capital in shares and face the prospect of going backwards in your savings.

    The unfortunate side is that you won't earn very good returns on cash right now - but shop around ... there are some good products out there still paying well over the going rate for something like an iSaver.