Young Investors (<30) Thread

Firstly well done!

Nice to hear about a hard working young Australian that is wanting to **** away all this money and is instead looking to make prudent investments.

I assume you are getting paid super as well...

If so, at 26 years old, I think spreading your investment across a range of different index funds is a very reasonable plan.

I'm not a Financial Planner (aka "financial panther") and you should seek professional advice (from someone that charges a fee, not a commission), but something to be wary of is with $2M worth of property in your portfolio you are currently VERY overweight property (as is most of Australia).

I think Australian shares offer more compelling value than property at the moment.

 

For the time being, property is a good investment since you receive tax deductions from negative gearing. You have a high salary and need to reduce your tax payable as much as you can. Salary sacrifice as much as possible if i was you. Furthermore, I wouldnt invest in the US market until you were heavily exposed to the AUS market. Reasoning: in AUS you receive dividend imputation credits which lowers the tax payable on dividends received. US stocks do not offer this. Furthermore, the US is looking a bit shakey due their monetary policies of quantitative easing. Most stocks are over-inflated/priced. Finally, there is no need to diversify in different managed index funds since most managed funds have the same stocks and weightings. However, if you were to pick specialised managed funds it may be an option but the time/transaction costs probably not worth it.

 

Thanks for the input guys. Its been a while since I posted, I had almost forgotten about this haha.

Quick question regarding Jess91's comment "I wouldnt invest in the US market until you were heavily exposed to the AUS market. Reasoning: in AUS you receive dividend imputation credits which lowers the tax payable on dividends received. US stocks do not offer this."
What if I bought VTS:xasx Vangaurd total US market? Would that be a way around it?
By the way I hadn't heard of dividend imputation credits, but I get the gist of it.

The 20k saving I had when I last posted is gone, I had to use it as a final deposit for one of my properties. I only have about 6k at the moment, so it's going to be a while before I have enough spare to start putting money into shares. I will start with the aus market. I want to have 20k or so sitting in the bank for emergencies or opportunities.... Also so i dont get into a position where I have to sell shares at a bad time. Standard stuff, I like to try and learn from other peoples mistakes haha

 

I think investing in Australia seems like a better idea than investing overseas, especially if you are new to it.

 

I’m more than happy to add my 2c

A little timeline on how I got into ‘investing’

One of my first stock purchases during the mining boom days was in the 2007/2008 mark, I noticed penny stocks would fluctuate by a few cents each day, the difference between their highs and lows were often more than 5% so I figured, what if you could trade this?!

So I purchased a few small parcels <$600 mark, note that I was still in university so didn’t have much capital. GFC came etc so obviously, things don’t go to plan as the transaction costs were high relative to the parcel size and I didn’t have plans in place if things went south etc.

After dabbling here and there, losing a fair bit on stocks like Centro (catching a falling knife), and other mining explorers I lost interest in the markets.

I graduated in 2010 and started a job that paid above average, bank deposit interest rates were about 6% ++ via Ubank at the time. During the first 2 years of work, my strategy was to set up a 6-12-18 month term deposit for every $20k I could accumulate, that way they were able to mature at different times.

In 2012 purchased my first investment property with a 20% deposit, didn’t go too hard with the borrowings as I was quite conservative.

Kept saving more money over time via salary and bonuses, I didn’t really add any shares but I think I started a Vanguard Index fund in 2013. I regularly BPayed about $1000 a month into the Australian / International fund.

In 2014, I purchased a 2nd IP with a 20% deposit. House on a large block of land so the yield was quite pathetic. Holding costs were about $1.1k a month. I later got permits and approvals to build 4 dwellings. After almost 10 months of work, I flipped it in 2016 for a marginal profit after factoring taxes, permit costs, architecture, unexpected costs etc.

During my 2nd property I didn’t realize how much work / stress was involved with collecting rents from crappy tenants who ultimately bailed, the stress from paying a mortgage with no rent coming in as it was empty for a few months during winter, council objections with the town planning, maintenance costs etc. This was on top of my stressful day job.

Only then did I regain my interest in listed ETF’s, LICs and equities as an investment vehicle. I can certainly joke that collecting dividends from shares is a lot more pleasant than smelling curry haha (old tenant of my 2nd property)

Currently, my net loan after offset on the 1st property is about $40k in which I plan to buy a family home in the next year.

Over the last 12 months I’ve built up a dozen or so shares (too many so it needs to be culled down) including a few banks, few individual names, but most importantly I’ve started adding some old LIC’s (ARG, DUI, MLT, BKI, MFF) into the mix, with the intention of adding more via SPP or DRP’s.

Goal is to not overanalyze it and have 6-8 core holdings of etfs/lics + a couple of individual stock names.

Hopefully can build up the income stream and not need to work in my 50s as I’m in my late 20’s this year.

Few tips that I would pass on to younger people that is starting off / entering their first full time jobs


- Don’t think you can time the market, you might be able to do it for first time but over the long-run, you won’t. Factor in taxes, transaction costs etc.

- Keep it simple and focus on a core / satellite approach. Core being LIC’s, ETF’s and satellite for a few shares if you want to have a ‘thrill’

- If I focused on buying and holding quality LIC’s from the beginning, I would have almost 9 years of compounding to my advantage today

- DRP’s make a difference when you don’t need the cash as it is compounding on top of compounding

Cheers

 

Likewise! I was excited to see this thread, then I realised it's coming up to 10 years old and the last response was in Nov last year!

 

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***Current Situation***

Age = 27 (wife + 3 kids - 8,4,4)

Work = Train/Network Controller

Investments = PPOR in Rockhampton (275k owing)

Super = ~120k

Cash Savings = About 60k in an offset


=========================================

**Goals**

Start debt recycling PPOR loan and hopefully accelerate my debt reduction. Eventually own a niec big house and not have to work full time until i'm 70. Ideally have something to pass onto my kids and them onto theirs.

P.S not sure if you wanted this old thread revived... again.

 

why not ?

even us old folks should look at new ideas

and better still there is a new generation of investors , that need the wisdom and encouragement