How old are you and what's your financial plan?
I'm curious to hear different opinions so I can improve my own.
What's Your Financial Plan?
deme on 06/02/2021 - 23:15
Comments
Live off credit and die early
Send me $20k and I'll tell you
What's your BSB and acc#
Keep IPs in Australia. Move overseas and become a non-resident to avoid 45%+ marginal tax rate.
Becoming a non resident is a CGT event.
You also lose CGT discount if you are not a tax resident.IP will also attract 32.5% non resident tax rate.
Still less than my current marginal tax rate…
Earn more than I spent
I take the YOLO or bust approach. Crypto to the moon babyyyyyy!!
- Earn money.
- Collect/hoard assets
- ???
- (hopefully) either flog them off to get $ or derive an income from it?
34.
For myself I'm trying to have a variety of investments and aim for a long-term steady but low-risk approach. So investment properties, Vanguard ETFs and then a small amount into more speculative investments. Also putting away max amount into superannuation for a number of years. I have been lucky to end up earning a fairly high salary in the last few years so putting away large amounts has been relatively simple and this may not be an option for many.
The question I'm not sure is when I can retire. I will be a multi-millionaire at this stage by 65, but the question is whether I could retire at say 40 instead and live off a lot less but enjoy life a bit earlier. I think for me I prefer to spend a bit more to enjoy myself, so may end up having to retire at 45/50 so I can have a higher quality of life/travel more freely.
I don't believe in cryptocurrency so avoid that, and don't know enough about stocks to invest in specifics. ETFs are nice and easy, and investment properties are easy to calculate rates of return so also a bit simpler.
Be born into wealth and easy opportunity, judge others who were not spoon fed from the gated community you now live in.
Yes that patch of dirt you were born in matters.
If you're born in Australia then many would argue that you were born into wealth….
Wife and I are about to buy a 1.6M property on 4 hectares outside of Melbourne - this will be our first house.
We will need to borrow 500k, and we expect to pay that 500k off within 10 years.
I'm late 50's, she's 50. We have no kids,.so no pressure from inheritances.We both have 400k super at the moment.
We both still work.
After loan our cash reserve will be about 200kWhat if scenarios:-
1. I get sick / die - super can pay off balance (no life insurance)
2. We both get sacked - reverse mortgage, live off super bank ends up owning house
3. We need to downsize, say in 10 years - sell house, pay back mortgage, live off balances
4. Ask nephew(s) 21 yo. to pay loan payments, then they can get our assets after we kark it.Simply put have enough 'passive' income to live the life style i currently life without having to work (doesnt mean ill retiree but i wont do jobs for people/management i cant stand anymore)
How much will you need?
Once the house is paid off $1000-1500 a week would be workable
25 years old with roughly $600k saved up.
Have been wondering this lately, any ideas what my financial plan should be and anyone in a similar position?
600k saved is an amazing effort at 25 just got to say well done bro
Thanks, has been a lot to process - had a little luck with investments.
Not sure about retirement or anything like that, financial plans a little confusing from here. Might work for another 5 years, retire from work and then start my own business
just make sure you get your travelling out of the way before you 'settle down' in life
@Trying2SaveABuck: Yeah, though not sure if I'll ever settle down into the grind of the house and loan. Might get married and have kids one day but career is unlikely to be an overly long one, unless I find something I'm really passionate about - maybe starting a small business and turning it into a larger one :)
Only child and returns last year were about $1.1m after tax, primarily due to some decisions I made last year in combination with really good returns in Asia
@[Deactivated]: the difference between investing and gambling is what exactly?
All that matters is the result did you make money and how much
@[Deactivated]: Nah, I'm an investor and a very good one. Moved out of the market in December/January 2020 in most countries (except Asia), after my Asia shares moved negatively that month and took returns of about 20% or so for 2019, at the time the yield curve in the US had inverted and that is normally a classic sign of a recession within the next 6 to 12 months. Bought back in around March/April 2020 and took up a large position in South Korea and a few other areas (Silver etc.) which at the time both seemed absurdly cheap.
Currently selling down at the moment and slowly moving back to more conservative/balanced portfolio right now, with the hopes of a correction later this year at which I'll start rebuilding up a larger position again. And that $1.1m was total after-tax income for the year incl. businesses etc, not just solely investment returns
@Charmoffensive: If you type / say it enough you'll eventually believe your own bullshit.
plenty of famous liars have done exactly this and taken over countries doing it.
@thewhip93: Hang on, you made $1.1M last year after tax but you only have $600k saved? You blew through at least half a million dollars in non-investment expenses last year?
@macrocephalic: This has been taken out of context so this will be my last post. The $1.1m was between both me and my parents, I look after both sides. Lets just leave it at this, return for the year was roughly 18%. And this is not a made-up fantasy number, it was just reasonably good timing in combination with substantial pre-existing assets.
@thewhip93: @thewhip93 Hey guys! Look how successful I am. Here's proof: this is how much money my parents made last year.
Here's a scoop: everyone can be a successful investor when they're playing with daddy's money.
I'm 56 this year.
Own house; no debts. No investments apart from Super.I have cut down to working 3 days a week this year and so down to 3/5 in pay. Ouch!
Plan to do the same in 2022 (if I am managing financially), then a year 1/2 pay LSL in 2023 in to 2024. Retire early 2024.
Access 98K unrestricted non-preserved Super in 2024 to last me 17 months. It will be taxable.
Start Super annuity at 60 about 900K (most of it defined benefits; for me the fund maximises when I turn 58) ; living on 52K a year (no tax) for the next 20+ years.Yes, I know I'm 'losing' heaps of income over 5 years; but I am enjoying 4 day weekends. (I bought a campervan).
Luckily I have done most/all of my overseas travel. (USA, Japan, China, India, Canada, Mexico, Cuba, Egypt, Jordan, Peru, Europe, South East Asia etc).
(Although I do have $1300 credit with AirAsia; not sure I will ever get to use it)
good plan, its sad that most people approaching retirement dont have a plan/enough to last them.
37 this year. I work as a data engineer. automated my forex trading which nets me 10-13% a month. buy and hold stocks. keep some bonds. im waiting a few more years before I can comfortably "withdraw" a living wage from my forex earnings. aiming to retire by 45.
How did you automate it?
most brokers have an API for trading outside their platform. i hooked up my R model to the API and the model basically tells the broker when to buy and when to sell, money management, and risk management. i've completed the setup at the start of the pandemic and its been great so far.
Which broker do you use? This sounds great.
@deme: all done within R. From querying data, to firing off buy/sell/modify signals. I tried it first with metatrader but there are some maths and packages only available in R. You can probably do this with python as well.
@deme: programming is my bread and butter. And I've traded on the side for a few years before becoming profitable. After I've become consistently profitable through manual trading, i started looking into automating my thought process in trading. Python might be easy enough to learn (compared to R) quickly.
@eleon00: so do you onlly use techincal analysis then?
i tried forex but was worried that the brokers always cut off the stop losses etc
@funnysht: yep. only technicals, pure price action through and through. stop loss hunting is a problem for some brokers. my money management does not rely on stop loss (shock! grasp pearls!). I use take profit to force a close instead. i havent heard of tp hunting and my brokers havent complained so far (yes, you can take a negative profit).
i tried trading the news/fundamentals, didnt work for me. it took me nearly 5 years to figure out my trading style, risk tolerance and one thing's for sure: fundamentals never worked for me in forex. stocks and crypto enjoy the speculative limelight.
automated my forex trading which nets me 10-13% a month
Not sustainable in the long run, though. 10% per month means that you're more than tripling your money every year, and in just 3 years, you'll have 30x your original capital.
Either you've run into some serious luck, or more likely (given you actually have an algorithmic setup), you're finding trades which will be size limited as you start to up your capital. In other words, easy to earn 10% per month on $10,000, not so much on $1,000,000…etc.
im a bit concerned on the trade fills when it comes to bigger lots (probably 50 lots and above). im planning to either diversify to different brokers or different assets when the time comes. as its currently setup, im trading on 25 currency pairs on two brokers.
Everyone is a genius in a bull market !!
ive been trading the currencies market for 7 years. i dont think im a genius but whatever im doing is working. :)
This!
Everyone thinks they're a genius in property but property values go up by themselves!
Everyone thinks they're a genius in the stock market but stocks have been going up by themselves since the GFC.
It is not genius to buy a property and have it go up in value. It is not genius to buy stocks and have them go up in value.
You're the genius if you maintain value through a stock market or property crash.
300+% annual return.
lol ok
its more like 200% rolling ytd. started in late march @ 10398. eom, it was 31238. im not saying you have to believe me tho :)
Why not borrow $1M, click a few buttons and then put your feet up?
@JelIyfish: as p1 ama mentioned, the higher turnover you do, the less liquidity your broker can provide. im currently trading at 1.1 lots. 1 standard lot is 100000. Each trade I take turns over 110K USD so any price movements gives me around 150-200 USD, depending on the pair. If I get 1M, in order to sustain this rate, i need to increase my lots to 30 standard lots, meaning i will be turning over 3M USD per trade. this amount of trade will mean i will wait for other traders to fill in my trade(its a zero sum game, after all) at the other end; meaning If I sell 3M worth of EUR, I need to wait for a person or a group of persons trying to buy 3M EUR. Not all the time will traders be pooling 30 lots in whatever direction im going (buy/sell), which means i can get hit by slippages or cancelled orders.
plus. its not even a year of automating my trades. I can just let it organically grow.
I made my own super fund, took all my super and dumped into crypto, took all my personal cash and dumped that into crypto. Mostly theta token. This is not financial advice. I’m a monkey on a rock floating in space ready to fling poop
an ozmoron negged you, i fixed just fixed that. good luck on your journey good sir.
Can you link to the service you used to create your own super fund?
For years I've been thinking of doing the same thing, specifically for crypto.
man.. honestly without this post i wont buy theta.. thanks to you i bought theta.. i am pretty sure you have nice ride with it too
Very simple but monthly 40:30:20:10
Investments:Living expenses:Splurge:Save
2000:1500:1000:50032yrs old - I know its hard to get living expenses this low but I've sharehoused since uni days
Is this post-tax?
which one includes the rent?
Do you need the save, when your investing.
Assuming you have an emergency fund already. Or is it intended for long term living expenses, like new phone, tv, clothes etc, that arent really monhtly expenses?
Basically avoid a situation where i need to beg
36 Here, working in IT.
There is something to be said for sticking it out at one place of employment if you're happy enough, have a good income etc. The grass isn't always greener.
My wife and I have been fortunate with some redundancies.
When the time came for my role to be made redundant in my previous job, I had ten years worth plus long service. Worked out well.We got jobs again quickly and put the money towards buying property.
We have a townhouse we occupy at the moment that will pay for itself when we rent it out and move into another place we're building at the moment. Both are about 10 minutes from the CBD in Perth.When My Son was born, that was the trigger to start investing for me. I'm putting money into Vanguard HG through CMC Markets.
I reinvest the dividends and just keep going… Initially, it was just for my Son's future fund but it's going to become everything and make the most of that sweet compounding.My wife also salary sacrifices shares in her organisation which is performing quite well.
In addition to this, we contribute extra into Super.My Advice- speak to a qualified financial advisor to help map out your future. Get enough insurance to protect yourself and loved ones.
Start somewhere with Investing asap. Diversify if you can- I'm planning to play with Crypto next. Just waiting to get some free up some finances as we're paying two mortgages atm. That chapter can't come soon enough!
Once that's that chapter is closed, I plan to up the investing in VDHG and pay our residence down.
I'm keeping it simple. I'm going to also become a licensed commercial real estate agent. Anything I make there will be invest and play with.
Buy a jetski and get back on a roster
The best financial plan is to spend less than you earn, I know people on 120k+ who are drowning in debt and still renting because they squander it all on useless things.
Yeah it seems that people get caught up with the rat race so easily. It is really amazing how much we earn in Australia and how much of that we actually need to live off. Yet all you ever hear is how we're hard done by and aren't paid enough. I think housing is an exception to this as it seems all the RBA does is reduce interest rates to artificially inflate house prices.
Its not what you Earn but what you Burn
I am 28 and hate my job.
Tip #1: Don't study a university degree unless you know what you want to do. I am earning 85k a year which is great but it cost me 5 years of my life to study the degree and put me 40k in debt.
Tip #2: Care about every cent you work for and don't let lifestyle inflation take over. The money you save while you are young is the money that is going to work hardest for you later in life. Learn to invest and if you get married and have kids you will be able to manage your money because you haven't allowed for lifestyle creep to take over. I have so many friends without wives, kids or even mortgages and they live from paycheck to paycheck.
My advice: don't be afraid of debt, just know what you can manage, and push yourself just a little bit further than you think you can afford. Not too much, but enough to make you think about how you spend your money.
AND it helps to have a partner who is good with money too. I have zero reservations in pooling every last scrap of finances with my current partner (now with 2 kids). Previous partner earned more money but was constantly "poor" as she couldn't manage it and didn't know bad debt from good debt [I'm looking at you credit cards] and wasted so much money on clothes/cigarettes/etc.
If investing in property - don't wait for the "perfect" one - it doesn't exist. Buy something you can live with and renovate if you have to. There is something to be said about "location location location", but your first property probably isn't going to be within a 5k radius of a major city.
Bought first property at 26 (too late IMHO). Now have 3 (was 4 until sold one year before last to reno our current home).
At 39 now, we are in a very good "net wealth" position with 7 figures. People say we're lucky, but luck had no part in it. It takes the ability to save and sacrifice when you are young and to make sound investment decisions.
I have never received financial advice, but have always been financially savvy. If you aren't, good advice is essential.
YMMV.
How did you calculate your net wealth? I notice you out quotes.
What's your cash flow like?
Total Asset Value - Total Debt = Net Wealth
Pretty sure that’s a standard calculation.Cash flows just fine thanks 😊
Are you including the total value of the houses they own rather than the amount you actually own.
@deme: Who is they? It’s a pretty standard calculation and is based on equity.
If I was to sell up all assets and pay out all
debts at today’s value, what’s left is 7 figures.
And an awful lot of government tinkering.
People say we're lucky, but luck had no part in it. It takes the ability to save and sacrifice when you are young and to make sound investment decisions.
Good advice otherwise, but come on, luck has everything to do with it. You're lucky if you're able to save while being young and lucky to have the knowledge to make those investment decisions.
a book on how to invest doesn't just fall into your lap, it's not luck, you have to actively go out and learn.
same with savings, say you are earning 40k per year now, next year will be earning 30k per year, i'm sure you can still survive on 30k per year.
The issue is everyone seems to spend exactly what they earn or more, thinking everyone else is lucky that they can save money.
Daytrade crypto until I can retire. Zzzz…
LUL Do you have a good community that to bounce ideas against ?
Nah, I just live minimally, invest what I can afford to lose and keep an eye out for new projects with promising market viability. Pretty standard research, invest, hold tactics.
I know a good one that has people all over the world, from pleb level to a pro level. DM me if you want it.
Borrow to the hilt, buy property and have the government bail out my dumb ass so that I can make sweet equity profit.
My friend Trevor Coon came up with what he calls ‘the method to financial freedom’. Basically since age of 16 he’s been working and putting away a proportion (say 30%) of earning towards a high interest saving account and another proportion (say 20%) as ‘untouchable’ money in his every day account. Now 16 years later, Coon has essentially achieved ‘financial freedom’ with over $50000 expendable income in his everyday account and $200000 saved in high interest (have estimated figures here but point is he can basically buy stuff with cash doesn’t rely on credit and has a large lump sum in high interest savings account generating him another small income monthly)
Imagine if he had invested it wisely.
Indeed. 8% on that sure as hell beats 2%.
$250k is not financial freedom, it's a good start to investing and a good safety net, but, that's not even enough to buy the cheapest detached house in a capital city.
Doing some quick calculations, he'd have over $350k if he'd put that into an investment earning 7% (which is a lower bound for the long term average for the ASX).
agreed his method is very conservative and safe. He noted that investment strategies (ie. property, shares) can be risky in case they fall. Bank savings accounts have relatively low return but little to no chance of losing money.
What investment strategy gives 7% return?
Putting money into a very diversified ETF - like VAS.
In the 11 calendar years from 2010 to 2020 (so including covid19) the average return of VAS has been 10.26%. If you look at the underlying funds then this trend goes back to the 90's https://www.reddit.com/r/AusFinance/comments/7pmi4v/vas_beat….
He can potentially do a CoastFI now by investing that $250k now in diversified etf like VDHG or VGS and dont access till retirement and coast till then. By coast i mean he can just earn enough to meet his expenses and no need for extra savings for retirement. By retirement age that $250k would have grown to a significant amount which means he can enjoy a comfortable retirement.
I'm aiming for a career change in order to increase my income and try to get into the property market. I'm in my 30's.
Already put extra into my super and other investments.
I don't have a longer term plan than that.
Why is it I'm the only one that feels 'lost'? I feel I 'tick' alot of those boxes here and really don't see myself going anywhere anytime soon to be honest. I got the good GPA, my pay is decent…
My biggest 'regret' was not investing earlier, but not really being brought up with this mindset nor having the education through school develops you to think this way. I've just brought my first 'investment' property at age 28, work two jobs, and have for the past 7 years, which is 50 hrs a week. Don't have a car at the moment…. I feel I've not had all those 'life' experiences everyone talks about about to have in there twenties to travel, spend cash to get drunk etc… and I look at myself now and think… why am I working for? at this rate i'll be living with my parents for ever…
I think perspective, I feel its much harder to do this when you're single, the economy is all based on two incomes.
EDIT: I do have some stocks, but I look at my portfolio and its 30% ETFS, other then dividends there so flat…. how to people manage to put in money each week and not be stung for brokerage?!
First things first- In my opinion, I don't think you should be comparing yourself to others. You're not "lost", you're on a journey though!
Those experiences aren't all great and there's still time to do them. In fact, given how bad things are now with COVID- now is the time to just invest and grow financially.I was 28 when I bought my first house with my wife. I also had accumulated some credit card debt I was in the process of paying off.
I moved out when I was 21, stood on my own two feet, spent too much on cars and "stuff"- I hadn't been taught to budget nor did I understand how credit cards worked. Then rent in Perth during the mining boom doubled overnight and I was suddenly in financial hardship. At there worst, I was in about 12k of debt.
I got my head around credit cards, moved to a low-interest one designed to be paid off and worked towards that over the next several years.
I'm now 36, have a decent amount of savings and will have a 2nd house soon. I've been lucky in some respects but I've also had my fair share of financial pain that caused me quite a bit of stress and embarrassment.
All the things you're doing are great. The time to travel will come (out of this lock down).. you have a property and investments. I wish I was investing at your age!
Here's a tip for your investing. Use a flat rate brokerage like CMC Markets. Just put the money away until you hit a sizeable amount- say 1k, then buy.
It's better than doing it weekly.You're doing just fine. Many, many other 28 y.o's aren't doing what you are. In fact, it hasn't crossed their minds. Ha! The irony, I'm comparing.
You're doing well for your age. I eventually learned working a lot of hours and not having a life wasn't worth it. At one stage I had worked almost every single Saturday in a year and didn't know what to do with myself when I had a free one. Working hard allowed me to put myself through a course and save up funds, however it didn't work out for my career but at least I didn't have extra student debt.
I'm also carless (despite wanting to purchase - car prices are bonkers) and still at home part time - my parents are not financially educated so I only started investing recently and I don't yet own a house.
Travel is amazing - obviously current situation doesn't really allow us to go international just yet. I quit my job and travelled for 6+ months, do not regret it! Have a lot of domestic travel planned for 2021 though.
I also feel the sting of being single - I think this is why I'm a bit overly cautious about committing to a house purchase.
We've paid off our mortgage and then some (some hard work, some inheritance, somewhat cheap area to live). Now that interest rates are so low we're redrawing and putting it into safe investments long term. With mortgage interest rates at 2.x% it makes sense to take that money and put it into an ETF which will earn 7+% (and the interest on the loan to invest is tax deductible).
Also putting close to the max into my super every year for the tax benefits.
The goal is to have a few million dollars come retirement. We won't be rich, but we'll have enough to live a good life.
33 year old, married, no kids. Currently have a mortgage on a property with approx $200k equity and contributing around $80k a year into the offset. Will be mostly paid off by the time we plan to have a kid.
Plan is to have a kid and buy our forever home before 40 by borrowing around $500k on top of whatever we get for our first house. Pay off said dream home by 50. Spend 10 years then pumping as much as we can into Vanguard or similar, then retire when I will be 60 and wife 54. Live off vanguard until we can access super.
I am 38, married with 2 young kids. Bought my PPOR (3Bedroom unit) in Sydney 7 years ago. Since i got a apartment in Sydney west rather then a house my mortgage was relatively smaller which is 85% paid off now and i have been channeling all my saving to a ETF -VDHG now for last 2 years.
I do realise that if i bought a home instead of apartment back theoretically my net worth will be lot more now due to higher capital gain but i dont consider PPOR as investment and smaller mortgage allowed me to have more cash flow and enabled me to invest in VDGH sooner. Long term the plan is to have at least $1million in VDHG in next 10 years time and shift to part time work
True. But it is something that I can afford with my current financial situation. I put it in my feel good spending bucket along with my online game spending.