# Would love some feedback...



## ChaChing (29 June 2020)

Hi Team,

First time poster, so apologies if I’m in the incorrect spot and also if these kind of posts are not allowed.

I’d really appreciate any feedback on my plan.... a bit about our situation:


Married with 2 kids, 10 and 8
I’m 46 and want to finish my current job at 55, my wife is 40 and also wants to finish at 55
I’m now mortgage free - PPOR worth 1 million
We both earn 135k each
My super 650k defined benefit, my wife 360k defined benefit (public servants)
I have 200k sitting in my offset which I’m now looking to invest
I’m also in the middle of an inheritance and will receive an additional 300k in 2 years time.
My plan is to invest the 200k into ETFs now with a breakdown as follows: 80k VAS, 50k VTS, 50k VEU and 20k VGE
I then plan to regularly top these up evenly every 2-3 months with about 5k spread across all. The plan is to hopefully never touch them again and reinvest all shares.
Also considering debt recycling redrawing another 300k from my mortgage and invest in something similar to the above over the next few months.
What do people think..... am I aggressive enough?.... should I be playing in some more higher risk ETFs?
Really appreciate any feedback on my plan team... thanks so much!


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## frugal.rock (29 June 2020)

My opinion is to seek the advice of a qualified & licenced financial advisor and broker and accountant.

There's too many implications re the taxation, business structure, super etc etc.
You probably want to get it right from the very start ?

I redrew from the mortgage instead of finishing it up and having a certificate of title in my hands, instead of a banks greedy mitts.
Something I will regret until the day I die...


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## Smurf1976 (29 June 2020)

ChaChing said:


> Really appreciate any feedback on my plan team... thanks so much!



Firstly, welcome to ASF! 

As a bit of background, the law precludes anyone other than a licensed financial advisor from giving "advice" - that's a legal issue which applies to all stock market forums not just this one.

We can however give opinions and say what we'd do under the same circumstances and leave it to you decide whether or not to do likewise. 

With that in mind, I'd start by asking myself some questions and crunching the numbers. The big one being "how much money do I want to spend each year in retirement?"

Once that question is answered, it then leads to working out how much capital you need to have by the time you retire in order to produce that income.


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## tech/a (29 June 2020)

CC

it’s a plan which is more than most 
How it will perform is anyone’s guess.

You’ll be testing in real-time 
If it was me I’d have a further plan 
In case it underperformed against my 
Expectations. Define under performance 

know when to hold and when to fold.

I’d also want a plan for if it exceeded expectations.


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## makteb (29 June 2020)

frugal.rock said:


> My opinion is to seek the advice of a qualified & licenced financial advisor and broker and accountant.




Once you have confirmed with your advisor and/or accountant your intention and investment decisions, your journey to trading education beings again.  Have all your trading accounts set up correctly for taxation/retirement purposes.

I personally not a fan of financial planners products as have been burnt some 15yrs ago which lead me on this path of self investing and fulfillment.

Plan your trade, then trade your plan.


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## rederob (29 June 2020)

It's a simple set and forget plan.
I would have a closer look at the range of ASX ETFs available rather than just rely on Vanguard.
As you are relatively young, you might also look to put higher percentages into some more aggressive funds for 5-6 years and see how they go.
Some, like ASIA, could be cycled in and out after good returns.


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## ChaChing (29 June 2020)

Really appreciate the comments so far, thankyou.

Over the past few months I’ve spoken to 3 financial advisors.... I went a long way with one of them who is highly regarded where I live..... his advice was to pay off the mortgage (which I was going to do) and then invest the 200k i to etfs in the industrial sector.... my super is Mickey Mouse so I don’t need any tweaks in that or life insurance..... I was going to be charged $8800 up front and then $8800 each year to maintain ie invest 8 weekly etc and give advice and have a review meeting..... now I have no clue to investing so would probably value the advice.... I then spoke to a friend
Who is also an advisor who recommended I do what I set out above.... which is sort of what the other guy advised me to do.... but if I have a crack and do it myself I save 16k this year!..... thoughts?


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## ChaChing (29 June 2020)

rederob said:


> It's a simple set and forget plan.
> I would have a closer look at the range of ASX ETFs available rather than just rely on Vanguard.
> As you are relatively young, you might also look to put higher percentages into some more aggressive funds for 5-6 years and see how they go.
> Some, like ASIA, could be cycled in and out after good returns.





rederob said:


> It's a simple set and forget plan.
> I would have a closer look at the range of ASX ETFs available rather than just rely on Vanguard.
> As you are relatively young, you might also look to put higher percentages into some more aggressive funds for 5-6 years and see how they go.
> Some, like ASIA, could be cycled in and out after good returns.



Appreciate the reply rederob... is ASIA the  ETF code?... I really feel as though I need a smallish % to have a calculated gamble on!


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## Garpal Gumnut (29 June 2020)

ChaChing said:


> Really appreciate the comments so far, thankyou.
> 
> Over the past few months I’ve spoken to 3 financial advisors.... I went a long way with one of them who is highly regarded where I live..... his advice was to pay off the mortgage (which I was going to do) and then invest the 200k i to etfs in the industrial sector.... my super is Mickey Mouse so I don’t need any tweaks in that or life insurance..... I was going to be charged $8800 up front and then $8800 each year to maintain ie invest 8 weekly etc and give advice and have a review meeting..... now I have no clue to investing so would probably value the advice.... I then spoke to a friend
> Who is also an advisor who recommended I do what I set out above.... which is sort of what the other guy advised me to do.... but if I have a crack and do it myself I save 16k this year!..... thoughts?



Stay away from financial advisers.

Browse the threads here on ASF.

Check the level of risk appropriate to your age, appetite, income and assets. 

And go forth.

gg


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## frugal.rock (29 June 2020)

makteb said:


> I personally not a fan of financial planners products as have been burnt some 15yrs ago which lead me on this path of self investing and fulfillment.



One can only hope that this area has been cleaned up somewhat by the royal commission....

It does sound like a fair plan. 
The advice to pay off the mortgage is highly sound from my point of view.


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## Bill M (30 June 2020)

ChaChing said:


> Really appreciate the comments so far, thankyou.
> 
> Over the past few months I’ve spoken to 3 financial advisors.... I went a long way with one of them who is highly regarded where I live..... his advice was to pay off the mortgage (which I was going to do) and then invest the 200k i to etfs in the industrial sector.... my super is Mickey Mouse so I don’t need any tweaks in that or life insurance..... I was going to be charged $8800 up front and then $8800 each year to maintain ie invest 8 weekly etc and give advice and have a review meeting..... now I have no clue to investing so would probably value the advice.... I then spoke to a friend
> Who is also an advisor who recommended I do what I set out above.... which is sort of what the other guy advised me to do.... but if I have a crack and do it myself I save 16k this year!..... thoughts?



Hi and welcome to the forum. You are in a wonderful position already which tells me you are quite a good saver and have put a lot of thought into your future. If it was me I would clear the mortgage first too. Now that you have spoken to some financial advisers as well, you also have some good ideas as to what you would like to do.

I would not use Financial Advisers myself and save the 8.8k up front fee and the ongoing free. With a bit of knowledge you can do all your own investing for free. I didn't even make it uni and do all my investing myself and retired early as well. In the early days when I was working I spent all my spare time reading books and financial magazines and learnt all about investing for myself. These days with the internet it is even easier. It really isn't that hard and with ETF's it's almost totally hands off. You are on the right track, all the best and good luck!


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## rederob (30 June 2020)

ChaChing said:


> Appreciate the reply rederob... is ASIA the  ETF code?... I really feel as though I need a smallish % to have a calculated gamble on!



Yes, ASIA is the ASX code for the ETF.
All up you have planned only 2% in "growth" so I was thinking that up to 5% until you turn 55 might be an affordable risk.


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## frugal.rock (30 June 2020)

Bill M said:


> If it was me I would clear the mortgage first too.



A common opinion emerging here.
Any investment based from borrowed equity has inherently higher risk.


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## over9k (30 June 2020)

If you close out the mortgage, it's not like you won't be able to borrow plenty of cash at very favourable rates - lots of assets, lots of income, extremely secure jobs... You'd be about as highly rated as it gets. 

You'd also, I suspect, have enough spare income to be able to salary sacrifice the max amount into your super too, which is one of the biggest tax dodges there is.


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## tech/a (30 June 2020)

frugal.rock said:


> A common opinion emerging here.
> Any investment based from borrowed equity has inherently higher risk.




This is a much chanted mantra and in today's 2-3% interest rates that you can lock down for years.
Im sure this mantra comes from people who are afraid of even the basic investment principals. 

*I just dont agree with it*. 

If you cant invest at over 3% a year then you have a serious problem with investment.
If you have a redraw of $300K on a million property that has growth of 1.5% a year thats $15000
on a $6-9K cost. *EVEN* if that didn't occur for a few years. *AND* if it drops a little in that time
It was going to happen *ANYWAY*.

Personally learning the power of *Leveraging* other peoples money and how to mitigate *RISK* is the key to wealth!
In the case of Property and Margin I can use 80% of their money and make whatever I can over their fee for using it and* KEEP IT!

****EG $100K down Borrow $400K at 3% make even 5% over say 3 years pay the 400K back plus the fee $36K which 
is tax deductible. Keep the $39K---thats 39% on my $100K in 3 years----Now do that with 10% return or better! *****

I've used it all my life from Property to Development to Trading/Investing To Machinery purchases (Trucks and Excavators).
Still do and will continue to do during semi and permanent retirement. My beneficiaries can sort it out however they see
fit when I push off! (Plenty left!).


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## over9k (30 June 2020)

Agree with duck 100%. There's just a lot of bull**** that goes along with having a mortgage still open. 

It'd be well worth looking at what rate you can borrow for as a standalone loan vs redrawing out of the mortgage. If the difference is trivial, keeping the mortgage open wouldn't be worth the headache IMO. 

It's hard to say anything else without knowing those figures.


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## qldfrog (30 June 2020)

over9k said:


> Agree with duck 100%. There's just a lot of bull**** that goes along with having a mortgage still open.
> 
> It'd be well worth looking at what rate you can borrow for as a standalone loan vs redrawing out of the mortgage. If the difference is trivial, keeping the mortgage open wouldn't be worth the headache IMO.
> 
> It's hard to say anything else without knowing those figures.



Really a matter of risk and comfort: true, you do not get rich without leveraging others money, I would even add, you do not get rich owning things, you get rich controlling them.
But having no morgage left is a lifestyle choice, feeling better..safer..whatever is your mind;
after why close it?  keep a matching offset account open;  to at least have the opportunity to get money at will at a click of a button
Then it is your call to use it or just keep it if opportunity arises or your car blows up and you need a new one


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## tech/a (30 June 2020)

qldfrog said:


> you get rich controlling them.




That applies to many many things.
From People to situations to negotiations to day to day life.
It doesn't have to be dictatorial either --- subtle control is
very powerful.

I was suckered into a car purchase $50K over Id had in mind to part with.
Typical Puppy dog sale---take it home 
But with the addition of --- " When your on the freeway floor it ."
I did just that --- Jettisoned back 70mm in the seat and grabbed the phone.
(it was sync'd) 

" Hi Honey its me Im just driving the car I just bought
home---see you sooner than I thought!"


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## tech/a (30 June 2020)

Oh by the way the Missus drives it!


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## frugal.rock (30 June 2020)

And a recession similar to the 1988-89 event with interest rates climbing to ~17% is never going to happen again.
The whole being wealthy thing is overrated IMO. 

*More, more, more.*


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## over9k (30 June 2020)

Until stagflation hits, that is. 

But we'll have massive civil unrest by that point.


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## Chronos-Plutus (1 July 2020)

over9k said:


> Until stagflation hits, that is.
> 
> But we'll have massive civil unrest by that point.




Recession-inflation is a logical assumption. When you have half your nation unemployed and supply chains are disrupted. Then add in the currency debasement and printing. Not a very healthy economic recipe.


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## tech/a (1 July 2020)

frugal.rock said:


> The whole being wealthy thing is overrated IMO.
> 
> *More, more, more.*




Wealth is a consequence of being very good at something in demand.
Pretty simple.
Become an expert.
It doesn’t matter what it is that you become an expert in
But when you do/are —-wealth will beat a path to your door!


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## Austwide (1 July 2020)

frugal.rock said: ↑
The whole being wealthy thing is overrated IMO.

*More, more, more.
*
Being wealthy is far better than not being wealthy, but follows along way behind good family and health.


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## Iggy_Pop (3 July 2020)

The plan looks sound and not a lot different to what I did with retirement, except I ended up with more individual shares instead of ETFs. One thing in hind sight for me was to increase the US ETF exposure compared to the Aussie ETFs . While the aussie ETFs give higher dividends, the total return has been better with IVV (similar to VTS) (and there is always risk someone will try to steal the franking credits). But as anything goes, maybe the US market is overpriced in comparison to the Aussie at the moment.  I do intend to sell some of my individual shares down the track and convert to ETFs and will focus on US and international.

Iggy


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## barney (3 July 2020)

ChaChing said:


> I’m now mortgage free - PPOR worth 1 million
> We both earn 135k each
> My super 650k defined benefit, my wife 360k defined benefit (public servants)
> I have 200k sitting in my offset which I’m now looking to invest
> I’m also in the middle of an inheritance and will receive an additional 300k in 2 years time.





Nice!  

I want you life ...... but I'll keep my wife (jk. My life is ok most of the time)

Welcome to ASF @ChaChing, and well done on what you have accumulated by the ripe old age of 46. I remember when I was 46.  I actually remember when I was 21.  I just cant remember where I leave my glasses nearly every day

Anyway, no real comment from me other than welcome and well done


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