Young Investors (<30) Thread

New here also.

Age: 28
Income: $150k with wife
Investments: PPOR $500k. Shares $400k. Cash $50k.
Debt: PPOR $300k. Margin Loan $200k.

Sitting on some cash for now until the market volatility is over. Got caught out in the correction recently and had to sell down on a few stocks I would have preferred to hold to get myself out of trouble. Now I'm just holding BHP (50%), four banks (40%) and Westfields (10%) and I think I'm safe for now.

In the process of refinancing my PPOR to get my hands on some equity and going to plough that into the banks. Safest place to be in this kind of market I think.

Will be putting most of the cash into the PPOR loan once the market is back on track, but can't decide whether I should just sell my shares and clear the mortgage altogether then re-borrow and re-invest or just employ a debt recycling strategy and clear it over time. I have 5000 BHP shares and I don't think I can ever let go of them. Mostly because they were my first ever investment and I managed to pick them up at $15 so there's the added sentimental value there (but more important than that - a significant amount of CGT). These are good problems to have I guess.

Within the next couple years I'll be looking to get some more international exposure, expecially US via MF's and direct share purchases. Anyone who thinks the US is done (in the long term) is kidding themselves. Also looking to purchase an IP within the next couple years and also start a family.

 

Hello Hello

Relatively new here, been reading the forums for a while now. Here's my first real major contribution.

Age - 28

Income with wife - $165,000

Investments
1. Taxi License - $400,000
2. IP - $308,000
3. Financial Planning Practice - $400,000
4. Various other capital protected products - all borroowed funds. $500,000

Home
1. $600,000

Although financial planning is my profession, I'm using the business as my main wealth building tool.

Financial Planning practices are cash cows, super consistent cashflows and at the moment you can buy them at a relatively cheap multiple to cashflow.

Anyways excellent forum,

Regards,

BigBuddha

 

Hello BigBuddha, Welcome to the forums. Looks like you are doing well with your investments. The taxi investment is not one you hear to often discussed on this forum. How are you finding that? It is a bit sad to hear that a Financial Planning practice is a cash cow, well for the clients anyway unless they are also doing so well. Regards

 

Hello Leandro,

I look at FP practices this way, if the practice is not going well financially how can it possibly be able to provide consistent, thorough service to it's clients, also being an independant, we need to ensure that we will be around for the long term, also our clients expect us or at least the business to be around for the long term as well.

This is especially true for my office as we concentrate on 35-50 year olds, so business longevity is a real issue and concern.

But yeah, I suppose our clients have done pretty well over the years, none have left which isn't a bad sign hhehehehe

In regards to the taxi license, it's been a dream to own. Easy to maintain, cause well there is none, you just lease out the license to the driver (of which there is a list probably a phonebook thick who want to lease) the only ongoing cost other than the financing cost is a $120 pa fee to the qld roads department for renewal of license.

Easy as. Also the lease is always for at least 2 years, which ensures consistent income, roughly about $2,500 per month.

 

As far as I understand, taxi licenses are like liquor licenses - the state government (or maybe some other body) regulates the amount available.

That's why people used to buy pubs in the country for the license, close them down and open places in the city.

 

Yes Samaka,

That is true, the state transport department controls the amount in circulation. And I guess that's the potential danger, if they release to many at one time, then the value of the licenses will obviously go down.

However, I have heard in the winds that if this ever did happen, there are local taxi consortiums/cartels hehe that would come in and sweep up these licenses very quickly to preserve the overall capital value of them.

 

I know it's getting off topic - but there was a story on Stateline NSW last week about it:
Stateline NSW

 

Good to hear that your clients have been doing well. Nothing worse, than a financial planning firm which charges the earth but doesn't deliver anymore than the client could have done by themselves without the excessive fees.

 

As someone who's over 30 (31), this thread is for people below my age, but given I've only just crossed over into the 30+ category I thought I'd just let you know my view and hopefully help some of you see that in the not too distant future you can make a giant leap.

When I started working (I finished uni when I was 22) I think I was had about 20k in shares. I saved where I could, drove the same car until a year ago, and holidayed on the cheap ... although that include trips to the UK, Spain, Thailand, Malaysia as well as around Oz. Plus, and not by choice, I ended up taking less holidays than I was entitled (I had 11 weeks holiday paid out when I changed jobs when I was about 28).

The hard part is starting investing. Getting investments up from close to zero (or 20k in my case) up to something worthwhile can be a struggle. When I reached about 27 I think I was worth about 150-200k. However, after that stage things start to snowball (as Einstein used to say, compounding interest is the 8th wonder of the world). Only four years later this number increased significantly.

Some people reckon this is a ******* competition so I won't say what I'm worth now, but it's a good multiple of what I was at 27. Of course, the economic boom helped, but most of it is due to investing in options that were safe, sensible and offered good defensive capabilities.

My advice to the under 30s would be to read the Berkshire Hathaway letters from Warren Buffet. While many annual report data is dull and boring, Buffet makes it interesting and speaks in layman's terms. This is a great introduction to all investors, and is written by the best investor of our time (arguably the best ever).

The other would be to read books by guys such as Steven Leeb, Twilight in the desert (Matt Simmons), the Bull Hunter (Dan Denning) along with newsletters such as the Eureka Report. Only by keeping up with investment opinion from sources such as these, as well as websites like InvestEd, will you be able to get the viewpoints required to beat the market (unless you are a genius like Buffet who can do it without additional help).

Not to mention such investment classics such as the "Intelligent Investor" by Ben Graham (or revised by Jason Zweig) or Common Stocks and Uncommon Profits books by Phil Fisher. The last two are old more school value investment books (with Phil Fisher keener on more expensive growth stocks), but are worthwhile reads for anyone looking at becoming a serious investor.

Anyway, hope this helps everyone out there ... if only for that fact that you go out and buy one of the books I've mentioned (or borrow it from the library for the serious investor that only wants to spend your hard earned on shares/property!).

Good luck and happy investing.

 

New here as well.

Excellent thread!

Although seeing what some (21-24yo) have achieved makes feel a little slow to start. I have owned some shares since I was 21 and have been thinking about property since then as well, but nobody ever really said I could do alot more at that age or younger. I am doing ok so far, although I really wish they taught more about investing in school I may have been able to do better.


***Current Situation***

Age: 26yo Single Female, living at home.

Work: I manage my parents embroidery business and may soon buy them out.
(quick plug Phoenix Embroidery - Newcastle Embroiderers for Businesses, Schools and Club)

Investments
Super: 30k
I mostly only contribute enough to get the co-contribution and have reduced this amount as my income has gone up, I think that I can use the money for better investments at this point in my life.

Shares: Around $30k
AMP, AVE, BOQ, CBA, OMI (don't ask, call these a learing experience), TLS &TLS3

IP: 2br unit worth about $175k with loan of about $138k.
I used the first home buyers and lived in it for a year and finished the renovations.

No cash or managed funds at this point, I am putting it all on the loan until I decide what to do next.

Goals: I always find these the hardest. The ultimate goal is to be financially free of course. Short term I am deciding what investment is next.....managed fund or more property. I am doing a lot of reading at the moment on different investments to help with this decision, which is how I found this site, also thinking of seeing an accountant or financial planner.


I also agree with EMP about buying a car, about 14 months ago I needed to get a new car, I was driving a manual and had to change to auto due to some ankle and knee injuries. I sold my car privately and got a great deal on a 2 door hatch (although I would have liked something better, its really all I need) I used the sale money form the old car and only had to borrow half of the price for the new car which I paid off as quickly as I could which was about 8 months.

Thanks for reading, hope I didn't go on too much.

 

I am 26yo, single, live by myself, female. I come from a poor family, I have lived off welfare most of my childhood/teens.
I went to uni, finished in 2002, got a job 6 months later and was ecstatic about being able to afford things like CDs, clothes, eating out etc. - which I have never been able to do before.

I spent a few years not watching my money, which I do not regret, I feel it was an important experience. Fortunately I didn't get into debt, I never got a credit card and always lived within my means, but I ended up with no savings or anything substantial to show for it.

A job promotion prompted me to start saving, investing and planning for the long-term. That was 2-3 years ago.

I have made super a priority, I know super is not the most popular vehicle for young people but I think it is fantastic, and I don't think it is possible to put too much in before you go on to more expensive stages later in life such as marriage/mortgages/children. I am building a buffer so I don't have to put in as much later in life when I will have more financial commitments. I don't actually intend to ever get married, I think having children is overrated, but you never know what you will start thinking when you hit 30 and realise the biological clock is ticking.

I am very lucky to have very cheap rent (it has not increased in 4 years!) and a good landlord. That has really helped my savings.

I have accumulated:
$55k in super.
$45k share portfolio (mostly index funds)
with a $20k margin loan against the shares
$10k cash for emergencies/buffer.

current salary is $65,000 (was about $50,000 up until last week, just got another promotion!)

I would really like to retire early, I don't want to work until I am 65. I don't care if that means living a modest lifestyle. I have no interest in buying a fancy house or car or anything like that - my dream is to have time to read books and learn cool stuff like skydiving, sewing, dancing, or history, or whatever takes my eclectic fancy!

I am pretty lazy with my investments, I couldn't be bothered with the hassles involved with direct property, hence I stick with regular buying of index fund parcels, conservatively geared as the core of my wealth-building.

 

You may have started behind the eight ball, but it sounds like you have definitely made some good decisions since then

There definitely some nice perks to Super at the moment.

Though, I guess the only downside is you won't be able to touch it until you do retire which is a long way off when you are 26... and if you were hoping to "retire" considerably early (or at least have the option to) like you mentioned, then some investments outside super might be just as prudent.

You definitely have done very well for yourself considering the current rental climate. I know when I was looking for a place to rent 8 months ago competition was fierce and apparently it has only got worse.

Congratulations! Do you think the extra $15k a year will bring about some changes in investment strategy? I know you mentioned you didn't want to get involved in IPs because of the hassles, not that I'd know seeing I have never bought one myself, but many people find a PM to look after their place.

Plus, with that nice little deposit you already have saved up, in addition to the FHOG (I'm assuming you are still eligible) and your pretty nice income, I'm sure you wouldn't have a lot of difficulties getting a $250,000 - $300,000 loan for a nice PPOR or IP.

 

I am a 24 year old Technical Consultant. I got into investing last year when I finally started full-time work after university. I also run a part-time ebay business that pays the bills. I just got a 5k raise and now am earning 50k/year. I am currently renting with my partner, who is studying full-time and only working part-time to help pay the bills.

I have about $34k in Navra with a 50% margin loan and I add $1.5k of my own cash each month ($3k including loan). I've been doing that since June last year. I also have about $4.6k in super.

My partner just started investing last week and she has $2k in CSF and is adding $200 per month.

In the short term I want to buy myself an IP within 2 years and hopefully a PPOR in 4 years time as my partner wants our own house before we start a family.

In the long term I want to build up a portfolio and reach financial independence by the time I am 35.

 

It is more legislative risk that concerns me with super. A lot of rules can change in ~40 years.

I am putting away money outside of super too. To be precise, I put 37% of my gross into super, and 25% of my gross into after tax savings/investments.

Thanks. That's why I am on these forums, trying to get some ideas.

I have done some sums, my rental situation is so good now I think I would be silly to move out - which I would have to do if I wanted to claim the FHOG (i am eligible).

If I ever get stuck on the rental merry-go-round I will consider at buying then.

Even if you have a property manager you still have to spend every weekend for a good few months driving around looking at properties before you can buy one, quite frankly I have better things to do with my free time. Maybe property would be a good hobby to try later when I have 'retired'.

 

Hi Bella,

The good news with super is that the majority of changes in super have been more beneficial to the average superannuant. The only time I can think that things have been tightened is the reduction of post-tax contributions into superannuation.

Before 9th May 2006, any after tax contrbutions could go into a superannuation account. Now after tax it is $150k pa or $450k using the bring-forward rule.

Good changes have been RBLs have been abolished, Contributions Surcharge has been abolished, Age Based Limits have been abolished, over 60s being taxed has been abolished, SGC have risen from the original 3% to now 9%.

So over all, most of the changes are good, albeit who knows when it may change.

Cheers,

Dan

PS Before making an investment decision speak to a FPA registered Financial Planner.

 

What you also have to remember is the government collects far more tax off superannuants contributing more to super (and having larger accumulation funds) than it ever did on the accessing of super by retirees, mainly because people didn't have large balances, and those that did would usually be the ones who seeked advice from financial planners who would minimise their tax burden.

With that in mind, it is hard to see changes to super that will make it less beneficial to access super. And to be honest, there will come a time when they will need to reduce contribution tax due to it being ridiculous the amount of tax that they will end up collecting.

Thats what my last masters assignment research pointed to anyway.

Ben

P.S. And as Dan says, just see your financial planner if they make it less beneficial, they'll sort it out for you

 

Hello all, first post. My name is Jaime I am 22 years old.
Someone else said earlier in this thread that they started from reading Kiyosaki. I have a few influences but he is definately one of mine. (Love playing cashflow 101/202).

My current situation:

Debts: Although I am renting, nothing owing (proud to at least say that I have resisted the credit card temptation).

Living with my Long-time partner. I have a lot of big goals and I'm extremely tired of putting the M.A.P (Massive Action Plan) off any longer. At this moment I have $500 savings (due to the fact that I've done a lot of stupid things but good in a way because I have learnt a lot of lessons to make me who I am today).

Investments: None (although many wealth books/tapes/cds which I remember good old Jim Rohn saying you need a good "library").

Current joint earnings: $800 p/w gross (partner is at uni so it's a bit difficult living off one income at the moment).

Short Term Goals:
-Convince my mum to let me use some of her PPOR equity to get me a depost on my first IP.
-Get a good financial advisor and start investing in shares/MFs
-Start a NPO helping 14-16 year olds learn about finances (The age when they are just getting jobs and the crucial age where kids pick up either good or bad spending/saving habits).

Mid Term Goals:

-Build my investment portfolio
-Get out of the Renting-Race and be in a "comfortable" place financially to start a family with my partner

Long Term (END) Goals:
-Financially free by 35
-Portfolio valued at $50KK+
-Spending the rest of my life giving back as much time and money by sharing my stories/knowledge with others less fortunate than myself.

 

That is an awesome idea. I live up in Brisbane so let me know how you progress on this front. I'd love to be able to contribute to something in the future.

 

sweet i was hoping to get some input, i have a basic plan laid out that my best friend and i are working on. would love to get some older and hopefully more experienced people giving some guidance along the way, and maybe some "guest" appearances by you smart investors with a thick portfolio to show and inspire the littlies

 

Well I can't help you there, I'm 23, and only have about 40k to my name.