Very smart. Me and the missus were the same 20 years ago and now I work part time by choice.
You sound like you'd be good with one of these
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- Thread starter freddy mercury
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You sound like you'd be good with one of these
- Sep 21, 2004
- 39,958
- 30,099
- AFL Club
- West Coast
- Other Teams
- Norwood & Liverpool.
$5k a month 
Id be happy saving $5k a year
Id be happy saving $5k a year
We don't have any children, but we've just settled on our second property (land, to build), so that figure will go down, but we will still be able to bank a fair bit until we settle.
Not sure exactly what a line of credit is, but we are very sensible with our savings and make sure we have money.
An account to help you smash your mortgage, better than an offset. Good for disciplined people.
Ah, probably not in a position to do that now with the land settling and construction due to begin in next 6-8 weeks.
For a period we were a few grand ahead on our repayments but we moved some money around for the build etc.
We have a joint account (for groceries, direct debits etc), an individual account each, long term savings (circa $75k in there for settlement of house, we will keep adding to this though as we will need to buy things, and do stuff like driveway etc), and another account for long term expenses - car insurance, body corp etc
- Feb 2, 2009
- 2,176
- 5,737
- AFL Club
- Richmond
Update on how I’ve done since 2011 for anyone interested.
I was making about $30,000 a year here.
I’m 27 now and make about $60k.
Bought a house at 23, with a mortgage of about $269,000.
I invested on and off for 10 years, but decided last year to go full growth with cash rates declining.
So I’ve got about $115k in shares and about $3k cash at the moment.
- Feb 2, 2009
- 2,176
- 5,737
- AFL Club
- Richmond
I’m now 32 and earn $84k which is the most I’ve ever earned.
Have the same house but mortgage is now $350,000.
No renovations, have just borrowed to invest as I’ve earned more
Have about $255k in shares and $32k in cash.
Made some mistakes with share investments I made in that covid boom. Had I stuck to ETF’s I’d probably have another $80k
Have been mostly single but have a partner at the moment. Don’t live together or share finances though.
See you all in another 5 years
- Sep 21, 2004
- 39,958
- 30,099
- AFL Club
- West Coast
- Other Teams
- Norwood & Liverpool.
I'm 45 and slowly saving.
very slowly.
Feels like each fortnight (pay day) takes AGES
Sent from my SM-S908E using BigFooty.com mobile app
very slowly.
Feels like each fortnight (pay day) takes AGES
Sent from my SM-S908E using BigFooty.com mobile app
Power Raid
We Exist To Win Premierships
increasing ones wage is always helpful but generating income through shares and other investments is a must to generating real wealth
Power Raid
We Exist To Win Premierships
other than an offset account it is not common to get a line of credit
A line of credit is often just a mortgage which can be drawn down like an offset account. They are more useful for those that run a business and need to "go bankrupt" quickly in case of a frivolous legal issue arises
A lot has changed since that post haha.
Apartment sold (made a good profit), in our house now (will be 4 years in June).
Have a two year old and another one due in March, we owe $524k on our loan. Got $26k in the bank and $60k in our offset.
It is.
As is changing some laws to reduce the amount of rentier capitalism that is going on at the moment. Income is only half the problem, plenty of people earning good money having to part with too much of it.
Power Raid
We Exist To Win Premierships
The issue I have with income from property, is it should only be derived from rent. The "large if not all of" the capital gain should be the benefit of the "crown".
By capping capital gains in property, this would encourage investment in long term asset classes such as medicine, infrastructure, renewables, R&D, technology etc etc.
A sensible solution:
- a clever wealth tax designed to negate income tax evasion
- increase GST (together with a wealth tax offsetting our current reliance on income tax)
- reduce CGT discounts on property in a stage time based milestone
- reduce the tax on women by 15% for life per child (capped at 45%) with 50% being put into their super) over the age of 28 (negating the sex inequality at retirement)
Power Raid
We Exist To Win Premierships
we done.
You've probably grown your wealth by 8% per annum on your home. Assuming a $700k property purchase that probably equates to around $1M today. A tidy $250k-300k tax free (obviously adjust up or down based on the purchase price). Plus the $86k is an excellent foundation.
House and land cost us total $742k.
Yeah, but if we use that $60k we pay more as it's offsetting our interest.
Very handy to have there though.
Did the math and can save a tick over $30k this year which is handy.
Of course my strategy of putting it into moderate-high risk investments on the ASX may not turn out, but hey worst case I can always save some cash again next year.
Of course my strategy of putting it into moderate-high risk investments on the ASX may not turn out, but hey worst case I can always save some cash again next year.
Power Raid
We Exist To Win Premierships
Consider never paying off your mortgage and refinancing to extend your mortgage every 3 years, especially as your personal income tax increases.
ie if your property is now worth $1M, refinance to the maximum amount possible which is probably $800k to $900k. Draw down the whole lot but put that into your offset account so you effectively only still owe the bank $440k ($524k-$24k-60k), this means you have up to $460k available for investing.
Stock market crashes happen every 5 to 10 years and don't worry about picking the bottom but buy blue chip stocks. Buying banks at $16 and jumping to $26 quickly whilst paying dividends greater than you mortgage rate and supported by government hand outs for first home owners propping up bank profits.
Or dabbling a small % with risky stocks like myers would have seen a $0.10 investment jump to $0.40 quickly.
When covid hit, I was at my desk going WTF. The mining industry had a shocker in 2015 and the recovery was finally upon us and then covid. My thought was, why the f'k am I here.......then I thought, if I feel this way so to must others. I bought $1M in stock immediately picking those that would be worst hit being qantas, village roadshow and myers. I more than doubled my money on those. I also bought the banks and participated the rights issues and then mining stocks via their capital raises.
Having "no holding cost" capital available is handy for crashes. It isn't without risk but nothing is.
- Feb 2, 2009
- 2,176
- 5,737
- AFL Club
- Richmond
Yep, not dissimilar to me. No offset as I haven't tried to time the market although my first refinance drawdown was in May 2020 which has kicked me off ever since.
House purchased for $315k with a $242k mortgage in 2017 and as the value of my house & income have risen I have accessed equity every couple years on average.
House is now valued at $500k but mortgaged for $350k. With $250k in managed funds. If markets drop this year I will access another $50k.
Stops lifestyle creep and accesses future savings; i.e $200 per month to invest $50k now vs investing $200p/m taking 20 years to invest $50k.
I worked in financial planning for 12 years and saw how clients would bust their arse to pay off a house by the time they were 55 and then squeeze 30 years of compound investing starting from scratch into their last 10 years of working.
I also claim a deduction on the accessed equity which drops my effective 6% home loan rate to 4.5% on those funds.
Compounding that money now vs 20 years time will hopefully make an enormous difference to my retirement. Not without it's risks but i'm not buying on margin so the biggest risk is my ability to service the debt. Working in local government, and being 32, I can ride out any large corrections.
Markets are great at the moment, so it's more easy on the eye than normal but never earning over $80k and almost paying off a house (albeit very cheap house) at 32 is better than most anyway.
I find it gives me a freedom to not stress about spending the disposable money I have now as having a night out or $1,000 luxuries here and there wouldn't make a material effect on what I already have invested if I were to invest it.
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This is a lot to take in haha
We actually don't own any stocks, I've thought about it, but got no idea how/what to look at.
Power Raid
We Exist To Win Premierships
take your time, speak to others and speak to and advisor in time.
What works for me being in my 50s
- I own high risk businesses (mining and technology material processing). My income is cash based but bonuses are in stock and high. Essentially I don't need to pursue exposure to high risk/ high growth as I have that already.
- For investments I look for stocks that pay 7% inclusive of franking (prepaid tax). So who cares if the stock goes up or down over short periods, in the long run they go up
- take a bank stock that crashed (like the ANZ, WBC or NAB), they were all around $16 at the beginning of the covid crash. They are all $30 or so now, paying 5% now (with the increase in price the yield has dropped from 7 to 5%) but based on my purchase price that's more like 10%.
Personally I only buy brands I use or know, prefer banks and hard assets (property, metal and energy). I also buy to set and forget rather than trade but I also build cash or have a line of credit (as I am building now) waiting for the next crash to go all in.
After an all in event during a down turn, I top up every 30 to 60 days and then as I feel the yields are too low (like now) I wait. The hard bit is not getting frustrated seeing red screens on the down turns.
Perhaps start by picking a few stocks (just theoretical rather than buy), record why you liked them (or not) and then assess what happened. Then compare to the performance against the cost of your mortgage. You'll learn, become familiar and hopefully buy stocks that deliver a better return after tax to your mortgage.
