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Discussion in 'Introductions' started by danno75, 6th Jan, 2008.

  1. danno75

    danno75 New Member

    Joined:
    6th Jan, 2008
    Posts:
    3
    Location:
    Sunshine Coast Qld
    Hi everyone,

    I am here like the rest to try and sort out my financial life. I am involved in international mining and although one would assume I shouldn't have to worry about cash too much 16 years of good times have taken their toll. After all the parties, fun and toys I now look back and think that if I had half the coin I blew I could have been living it up in SE Asia permanently now. There is always two sides to the coin and I have done a lot of things my more conservative friends haven't so it's an even trade off.
    Enough of that and down to business, I have an IP (straight into the abreviations) in Newcastle that I got on to a few years ago and about four grand worth of shares that I grew out of two grand blindly using Etrade and a bit of internet research. I have a very good disposable income as mechanics go and minimal living costs (about 20% of my net income) I know I need to start off by saving which is a given but I'll give you the rest of the plan and see if anyone has anything to add. This is all starting this year as a resolution mind you
    I put 2000 per month into my mortagage which is a few hundered positive geared (I don't think I qualify for tax incentives)
    3000 in to cash saving
    2000 into some form of shares (I want to have a crack myself)
    and about 1500 is for living and saving for good times and travel
    Income for the IP and tax refunds go into the saving fund (approx 15000 p/a)

    Now you would think a financial advisor would jump at this but with out a large start point the interest level is low so I will give it a go on my own for about 12 months until I have a decent wad and then try the 100% paid up advisor type not a commision advisor.

    Any tips on maybe putting the cash in to something other than the bank or even not wasting time on the shares and putting bulk into some thing with decent returns would be appriciated. Instead of beating myself up over what I've done in the past I want to sort out the future.

    Cheers
    Danno:
     
  2. samaka

    samaka Well-Known Member

    Joined:
    30th Sep, 2007
    Posts:
    308
    Location:
    Sydney
    If you your IP is already cash flow positive - so it's already paying down the loan - then I'd suggest you stop putting you money towards that. That $2000 a month can be used to invest in an other IP for example.
     
  3. The Stig

    The Stig Well-Known Member

    Joined:
    3rd Dec, 2007
    Posts:
    190
    Location:
    Central Coast NSW
    I don't see the problem with seeing a fee for service financial adviser now.

    That would mean you are committed. Don't worry about walking into the advisers office with $50,000 cash to invest at the end of 2008.

    You never mentioned super. Super is an excellent vehicle to minimize tax. This would be another area where they can help you a lot. As complicated as super is, and with all the changes that have taken place over the last few years, it is probably the hardest areas to get right and one of the most important I think, when it comes to adding more that the 9%SG from your employer.

    Good luck.

    Cheers
    The Stig
     
  4. danno75

    danno75 New Member

    Joined:
    6th Jan, 2008
    Posts:
    3
    Location:
    Sunshine Coast Qld
    investing outside OZ????

    Thanks for the replies.

    Firstly Samaka, I think I have shown my misunderstanding of terms straight up, the IP isn't cash flow positive it costs me about $1600 a month and I get about $1000 in rent which means it is negative geared I suppose. What I was getting at is that I pay $2000 a month which is paying of some of the principal. My Mum (my chief advisor) says this is the thing to do and as the loan isn't IO I tend to agree, is this the go?

    Stig,

    I won't be back in Oz until the end of the year as I temporarily reside in Indo. are there advisors I can talk to via email or do you know if it is worth seeing someone in Singapore as I travel through there every four weeks or so. Also are there benfits of not having my investments in Australia at all?
    I don't know enough about what is on offer outside Australia and I have done some internet research but all you really get are sales pitches and addresses, the same as in Oz.

    Thanks for the info

    Danno
     
  5. danno75

    danno75 New Member

    Joined:
    6th Jan, 2008
    Posts:
    3
    Location:
    Sunshine Coast Qld
    Forgot the super

    Stig,

    I have about $40,000 in super in Oz but now that I am offshore I don't contribute. My Mum has told me I should be putting something into it and I could possibly either save lump sums or drop $500 a month into the super, I suppose the sooner cash goes in the sooner the interest accrues. With the way the global economy is at the moment are super funds going to continue to deliver??
     
  6. The Stig

    The Stig Well-Known Member

    Joined:
    3rd Dec, 2007
    Posts:
    190
    Location:
    Central Coast NSW
    Sounds like your mum is a smart lady.

    Ask here to enquire about a financial advisor that can help you. You have a situation that is probably more complicated or challenging than I could ever help you with. I mean being Australian and working over seas. You could be in a situation where by you could save a crap load on tax, but I don't know.

    Get you mum to find an advisor that has experience in all these areas.

    That's what I would be doing.

    Or at least starting on the net and picking up the phone yourself to ask a round.

    I have never met the financial advisor I have, because I just tell him what colonial products I want. But he thinks he is the best LOL. Want his number for starters?

    Also. If you are not a self starter, or one who sits on paper work for months, then a fee for service advisor ain't going to be your best business partner after he has collected his fee for the advice. In which case an advisor who sets up up in managed funds may be a better way to go.

    Getting started IS THE HARDEST THING TO DO!!!!!!!!!!!!!

    Cheers
    The Stig
     
  7. AsxBroker

    AsxBroker Well-Known Member

    Joined:
    8th Sep, 2007
    Posts:
    1,448
    Location:
    Sydney, NSW
    Hi Danno,

    I'm guessing that your late 30s early 40s? (I'm probably wrong, but guessing anyway).

    I'd be finding out exactly whether you are classified as a Australian resident for tax purposes first. Then work out what you should be doing from there.

    Rather than investing where the "internet research" is telling you to invest, you could invest in top ASX200 companies. As Buffett says, "If I don't understand a business I won't invest in it". That's made him extremely rich.

    I wouldn't worry too much about a commission based planner vs fee for service (though ffs could get expensive if they start charging you per email). Also some planners may have a flat retainer, though if your only starting out the ffs and retainer style may be more expensive than an adviser who charges the FPA suggested 0.6% to 1% pa. Eg, if you've got $200,000 at 1% your adviser will be paid $2,000 over the year. A FFS may charge you $3,000 or upwards before putting together a plan which you may even like, as well as also charging a minimum of $110 per hour (incl GST), most are around $220 ph. Compared to a commission style planner who won't be charging you extra for asking questions or wanting to know more information.

    Superannuation is for long term savings and if your wanting to be able to access the funds before age 55, you don't want to lock too much of it up in Super.

    Your mum sounds knowledgable, does she use an adviser? If she does you can use him as well. If she doesn't, maybe some of her friends do?

    Like Stig's adviser, I like to think I'm the best as well, I know reality is that there is always someone else out there who has had more experience, more clients, more income, etc. All I know for certain is that I give my client's the best possible service and they are number 1 when they deal with me.

    Cheers,

    Dan

    PS This is general information. Before making an investment decision speak to your FPA registered Financial Planner.