Long term plan to invest in a few ETFs

[AaronB]

I am 45 years old, hoping to retire at age 60, or at least be financially able to reduce my working week down to 3-4 days per week if I feel like it. Have investment properties which do their thing in the back ground. Have paid off our home mortgage and have no car loans or credit card or other debt.

I have started putting away a couple of hundred per week for investing into ETF's. I do not want to be checking the markets daily to see who farted and the market went down or who burped and the market went up. Purely looking to choose 3-5 ETF's (that provide diversification) and periodically buy more of each and let them do their thing in the background. Over time I will be able to increase the weekly contribution to these as the kids finish schooling and I have more disposable income to put into it.

So far I have bought NDQ and VAS in equal amounts. I read that bond ETF's should also be part of an investment portfolio as potentially they can offset a down turn in the markets / economy which can effect shares. What percentage of the overall portfolio should be bonds ideally?

Can anyone please suggest other ETF's that you think I should have in the mix, that don't overlap with NDQ or VAS and would be suggested?

Thanks, I appreciate any and all information and suggestions / observations.

 

[Captain_Chaza]

You Only Need ONE (1)
I Suggest you put all your eggs on the Magnificent S&P 500

 

[Gunnerguy]

NDQ is tech focused. Do some research in VGS, IVV and IWLD. I’ve held IWLD for many years.

As you will appreciate, one cannot give specific advice, for obvious reason, including not knowing other factors.

Personally for me, investment decisions come after a will (after death tax and debt management ) is in place and then insurance considerations (protect what you already have, ie. health, job and assets). Remember the cost of ‘fixing’ health and property have increased a lot more than CPI.

 

[Value Collector]

I am 45 years old, hoping to retire at age 60, or at least be financially able to reduce my working week down to 3-4 days per week if I feel like it. Have investment properties which do their thing in the back ground. Have paid off our home mortgage and have no car loans or credit card or other debt.

I have started putting away a couple of hundred per week for investing into ETF's. I do not want to be checking the markets daily to see who farted and the market went down or who burped and the market went up. Purely looking to choose 3-5 ETF's (that provide diversification) and periodically buy more of each and let them do their thing in the background. Over time I will be able to increase the weekly contribution to these as the kids finish schooling and I have more disposable income to put into it.

So far I have bought NDQ and VAS in equal amounts. I read that bond ETF's should also be part of an investment portfolio as potentially they can offset a down turn in the markets / economy which can effect shares. What percentage of the overall portfolio should be bonds ideally?

Can anyone please suggest other ETF's that you think I should have in the mix, that don't overlap with NDQ or VAS and would be suggested?

Thanks, I appreciate any and all information and suggestions / observations.

If you don’t need the money till you are 60, then it can be a good idea to make the investments in your super.

That way you get a tax deduction when you contribute the funds into super, you get a lower tax rate on your earnings inside the super, and when you start drawing a pension from your super all your earnings will be tax free.

I have my super in basic index’s mostly, my super fund allows me to choose what I invest in so much contributions are invest as shown in the photo.

 

[divs4ever]

I am 45 years old, hoping to retire at age 60, or at least be financially able to reduce my working week down to 3-4 days per week if I feel like it. Have investment properties which do their thing in the back ground. Have paid off our home mortgage and have no car loans or credit card or other debt.

I have started putting away a couple of hundred per week for investing into ETF's. I do not want to be checking the markets daily to see who farted and the market went down or who burped and the market went up. Purely looking to choose 3-5 ETF's (that provide diversification) and periodically buy more of each and let them do their thing in the background. Over time I will be able to increase the weekly contribution to these as the kids finish schooling and I have more disposable income to put into it.

So far I have bought NDQ and VAS in equal amounts. I read that bond ETF's should also be part of an investment portfolio as potentially they can offset a down turn in the markets / economy which can effect shares. What percentage of the overall portfolio should be bonds ideally?

Can anyone please suggest other ETF's that you think I should have in the mix, that don't overlap with NDQ or VAS and would be suggested?

Thanks, I appreciate any and all information and suggestions / observations.

welcome to posting

having faced a ( roughly ) similar adventure

i would suggest a COMPLETE health check first ( i still tell the pharmacist they haven't got below my navel .. i still have some surprises , for the medicos )
they decided i was 'slowing down' in mid 2016 by early 2017 ( the first week ) i had a full disability pension ( and six months back-pay ) .. which really messed up my saving a few bucks a week plan .

your strategy ... maybe something with REITs ( international or national ) instead of bonds ( in ETF form ) and something 'international i like India-focused ETFs , but you might prefer China , South Korea , or Japan-focused ETFs , or something like VGE , VAE or some of their rivals

but you will REALLY have to dig around to find what best suits you ( YES it is hard research , but those little differences can count even in the first 5 years )

i hold VAS , but i bought VAS as 'insurance ' ( against bad stock selection , not as a main pillar of the portfolio ( and none of the other ETFs i have specifically mentioned ) i bought my ETFs at a good time .. that good time might be still on the horizon for you

good luck

remember troubled times create opportunities

 

[dyna]

If you don’t need the money till you are 60, then it can be a good idea to make the investments in your super.

Don't leave it too late either. Both for yourself and even a non - working spouse . Learn all the tricks and traps of superannuation well before retirement . Everything to do with super is age related . For any above average income earner , every year that passes without taking advantage of this wonderful tax structure ( 15 % tax rate on earnings in the accumulation phase , up to the $3 Mill TBC cap . Then a $ 1.9 Mill tax free pension for each person , if a couple ) is a lost opportunity that will never come back . Sadly , most Aussies lack the forethought to even take an interest in their own 11.5 % S.G. taken out of their wages each week . They get to retirement and wish they could have done more . Look , super is complicated . There's a lot to get your head around but fact is : something like 30 to 50, 000 Aussies will indeed retire with that kind of serious dough in their super.

 

[Value Collector]

Don't leave it too late either. Both for yourself and even a non - working spouse . Learn all the tricks and traps of superannuation well before retirement . Everything to do with super is age related . For any above average income earner , every year that passes without taking advantage of this wonderful tax structure ( 15 % tax rate on earnings in the accumulation phase , up to the $3 Mill TBC cap . Then a $ 1.9 Mill tax free pension for each person , if a couple ) is a lost opportunity that will never come back . Sadly , most Aussies lack the forethought to even take an interest in their own 11.5 % S.G. taken out of their wages each week . They get to retirement and wish they could have done more . Look , super is complicated . There's a lot to get your head around but fact is : something like 30 to 50, 000 Aussies will indeed retire with that kind of serious dough in their super.

Yep, you should definitely try and understand super and make sure you have it set up right early (eg no insurances draining it, good investment mix etc) so it has time to work for you, and you should be co tributing to it.

But, once you hit about 40, I reckon it becomes extremely attractive, because after 40 it’s less than 20 years till you can touch it,

 

[Value Hunter]

Don't leave it too late either. Both for yourself and even a non - working spouse . Learn all the tricks and traps of superannuation well before retirement . Everything to do with super is age related . For any above average income earner , every year that passes without taking advantage of this wonderful tax structure ( 15 % tax rate on earnings in the accumulation phase , up to the $3 Mill TBC cap . Then a $ 1.9 Mill tax free pension for each person , if a couple ) is a lost opportunity that will never come back . Sadly , most Aussies lack the forethought to even take an interest in their own 11.5 % S.G. taken out of their wages each week . They get to retirement and wish they could have done more . Look , super is complicated . There's a lot to get your head around but fact is : something like 30 to 50, 000 Aussies will indeed retire with that kind of serious dough in their super.

But I would caution the longer the time horizon the more sovereign risk to super. Australia has been on the wrong path for decades now and eventually the government could be tempted to nationalize super and put everyone on a government pension (there are countries that have done this before) or otherwise put punitive wealth taxes on super or push up the retirement age to much later, etc.

Just the fact that your money is locked up for so long and you cannot bail out if the government decides to enact dumb policies is a meaningful risk. I mean sure it might make sense if you are 15 years from retirement to to contribute to super.

I am in my mid 30s and I don't make any voluntary contributions to super as the sovereign risk from now until I turn 60 is too great. Australia has been governed by morons for a long time and we are heading towards eventually becoming a banana republic. The only question is when that occurs (admittedly not anytime soon but it will happen eventually).

 

[AaronB]

Don't leave it too late either. Both for yourself and even a non - working spouse . Learn all the tricks and traps of superannuation well before retirement . Everything to do with super is age related . For any above average income earner , every year that passes without taking advantage of this wonderful tax structure ( 15 % tax rate on earnings in the accumulation phase , up to the $3 Mill TBC cap . Then a $ 1.9 Mill tax free pension for each person , if a couple ) is a lost opportunity that will never come back . Sadly , most Aussies lack the forethought to even take an interest in their own 11.5 % S.G. taken out of their wages each week . They get to retirement and wish they could have done more . Look , super is complicated . There's a lot to get your head around but fact is : something like 30 to 50, 000 Aussies will indeed retire with that kind of serious dough in their super.

Hi this is interesting to me. Can you please point me to some info online that I can reference and read into it a bit more.

Thanks.

 

[AaronB]

If you don’t need the money till you are 60, then it can be a good idea to make the investments in your super.

That way you get a tax deduction when you contribute the funds into super, you get a lower tax rate on your earnings inside the super, and when you start drawing a pension from your super all your earnings will be tax free.

I have my super in basic index’s mostly, my super fund allows me to choose what I invest in so much contributions are invest as shown in the photo.

View attachment 183312

Looks like you are with Australian Retirement Trust as well. My super is structured like this...

I don't know if this is the best for me at my age? I notice that ART offer a consultation with a financial advisor as part of their package and I think I'll take up the offer.

 

[divs4ever]

I am in my mid 30s and I don't make any voluntary contributions to super as the sovereign risk from now until I turn 60 is too great. Australia has been governed by morons for a long time and we are heading towards eventually becoming a banana republic. The only question is when that occurs (admittedly not anytime soon but it will happen eventually).

a rather mature statement for one so young , you must have done some deep research

( nice work if you did )

PS you don't know you are in a Banana Republic until you slip on a discarded skin ( we might be already there is someone demands full payment for those 100 F-35s and those new nuclear subs )

 

[Value Collector]

If you don’t need the money till you are 60, then it can be a good idea to make the investments in your super.

That way you get a tax deduction when you contribute the funds into super, you get a lower tax rate on your earnings inside the super, and when you start drawing a pension from your super all your earnings will be tax free.

I have my super in basic index’s mostly, my super fund allows me to choose what I invest in so much contributions are invest as shown in the photo.

View attachment 183312

I am 42 so only 3 years behind you, I don’t put any in cash or fixed income, because with a minimum of 18 years left before I start drawing, I don’t want my capital sitting in cash getting eaten by inflation.

 

[dyna]

Can you please point me to some info online that I can reference and read into it a bit more.

ART super ( Growth ) has been fine with me , too . The more I stuff into this not-for-profit superannuation fund , the less I pay in fees and charges . It's down to just basis points , now. Never paid for life insurance cover , either . Hey , I risked my silly neck for 40 years riding bikes, sometimes in hellish places like India and Vietnam . Don't ever do that folks ! (Not living dangerously any more . There's enough risk for me now ,in just breathing the air ) .

For a crash course in superannuation , tune in to 2GB Radio fortnightly for the Jacaranda Financial Planning program . Or catch up on-line with previous podcasts ( Latest was 20 th August ) .

This outfit also runs monthly seminars in all the State capitals . Well worth attending as you can hang around afterwards and pick the brains of these experts . I've learned heaps from these guys over the years and best of all.......... there's no charge !

The trick with super is to start young . The magic of compounding takes years but when it finally kicks in , oh boy , it's truly staggering . As an apprentice, I was allowed to join the building company 's private super fund in the late 1970's when only one other tradie in the joint could be bothered with it . You can get lucky in life and meeting this extremely optimistic financial literate , while still in my teens , was probably one of the best things that ever happened to me . I was able to follow him into " retirement " at the same age , early 40's .

 

[Value Collector]

Looks like you are with Australian Retirement Trust as well. My super is structured like this...

I don't know if this is the best for me at my age? I notice that ART offer a consultation with a financial advisor as part of their package and I think I'll take up the offer.

View attachment 183441

The difference between our two allocations.

Is mine is in the indexes, eg the whole market, yours is in the active selection where the managers pick and choose shares trying to beat the market.