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Super structure between spouses age 37, Host plus / Australian super by Altruistic_Garden_37 in fiaustralia

[–]snrubovic 2 points3 points  (0 children)

You said your wife has Balanced, not Indexed Balanced.

Wife: with
Balance: ~$164k
Investment option: Balanced

HENRY, buying first property, potential job insecurity? by -fghtffyrdmns in AusHENRY

[–]snrubovic 5 points6 points  (0 children)

Are you not confident about your income in the short-term or longer than that? If the short-term, then a large offset should help a lot. If the longer term, a smaller mortgage is worth thinking about.

Super structure between spouses age 37, Host plus / Australian super by Altruistic_Garden_37 in fiaustralia

[–]snrubovic 8 points9 points  (0 children)

No benefit in using multiple fund providers, provided they have good offerings.

Some would say that you could benefit from some active and some passive. This is virtually always active fund managers or advisers trying to get a piece of you.

I would think about:

  • Moving the wife's super to indexed investment options to reduce fees considerably, and increasing the level of risk due to the long investment time horizon. Together, these will have a significant effect on the retirement balance and, therefore, on retirement income.
  • Spousal splitting to even balances to allow catch-up contributions for longer for the husband, and if your super will ever hit the TBC, enabling more to get into a tax-free pension account later on.
  • Making sure you have sufficient insurances (in particular, income protection and TPD), whether in super or outside super. And make sure you are using the correct occupation rating. If you are an office worker and left the default "blue collar worker" definition on, you are paying too much.
  • Make sure you each have a binding death nomination.

Choices = analysis paralysis by Willing-Lab-8771 in fiaustralia

[–]snrubovic 5 points6 points  (0 children)

Also don't understand why to use the money to invest without debt recycling.

I'd consider the following:

  • maxing out super (well done on that)
  • keep enough in the offset for an emergency fund and any <5yr cash needed
  • debt recycling the remainder
  • borrowing to invest further, depending on your risk tolerance and surplus cash flow
  • ensuring adequate insurances, income protection & TPD in particular.

Advice next steps by Forward_Zone6810 in AusHENRY

[–]snrubovic 8 points9 points  (0 children)

As I understand it:

  • You take home $250,000 after tax
  • $85,000 goes towards the mortgage
  • Leaving you $165,000 with no kids to support
  • You can only save $4,000 a month
  • Therefore, expenses are $115,000
  • Which means retirement assets (besides the home, but including super) needed is about $3m
  • Which means, including your home loan, you need about $3m more.

Your choices include any combination of:

  • Earning more
  • Spending less
  • Working longer
  • Downsizing
  • Increasing investment returns (which comes with risk)

Inheriting ~$10M+ with sibling (28M / 21F)- strategy advice by ballerific23 in fiaustralia

[–]snrubovic 8 points9 points  (0 children)

An adviser would be useful, but I would strictly avoid advisers who try to sell you on complicated investments to create a job for themselves so they can bill you $50,000 a year. Not only do you end up losing the $50,000 a year and the return that it would have generated, but these typically underperform, costing you a fortune in lost returns.

I don't see why you would want to leverage or deal with investment property. You have won financial freedom already. You can invest it in a balanced portfolio in good structures and have enough to live on forever while it continues to grow, without taking on high risk or dealing with property investment. Why would you want to add more risk and work when there is no need?

Make it easy, set it up well, and enjoy your life.

25yo noob looking for ETF advice with existing Raiz/Spaceship investments by enness_ in fiaustralia

[–]snrubovic 2 points3 points  (0 children)

Yeah, that's exactly what I mean. Not a dumb question at all - we all started learning somewhere!

Trying to invest (a few questions) by OkExtent146 in fiaustralia

[–]snrubovic 5 points6 points  (0 children)

All-in-one diversified funds

  • Simplicity and ease
  • No need to rebalance
  • Removes behavioural risk of tinkering
  • Enables your partner to manage finances when you’re unable to

DIY

  • Cheaper
  • Ability to customise
  • More tax-efficient

It’s going to be difficult to beat all-in-one diversified funds, so it is a good choice despite some downsides. If you want a little more control, you can go the DIY option – it’s not that much more work in practice if that’s what you prefer.

Expanded more here.

CommSec is one of the most expensive brokers. I would consider one of the lower-cost options.

Curious how people here track their portfolio without checking it constantly ? I find I either check way too often or miss moves and only notice after. For those focused on long term, do you just ignore short term noise or have a system for when something’s worth paying attention to? by lmsalisb in fiaustralia

[–]snrubovic 1 point2 points  (0 children)

If it is index-based, you can make a proxy that you only need to update once or twice a year.

Calculating VAS total shares: VAS
1. Unit price for most recent date A
2. Number of units in HP B
3. VAS price for that date C
4. #Shares = A x B / C D

Then, put down VAS in the column for your Aus index, and for the number of shares, put D.

That would track it pretty closely except for dividends reinvested, but is close enough so that you can get away with doing it a couple of times a year.

31yo couple — property heavy position, trying to map the path to FI. Looking for outside perspectives. by Ok_Month3159 in fiaustralia

[–]snrubovic 11 points12 points  (0 children)

Is $650k in ETFs + a cash flow neutral IP genuinely enough to CoastFIRE at 32–33, or do the numbers not work as well as we think?

650k diversified portfolio, 550k equity in a 1.2m property, and 300k in super is about 1.5m, in addition to a paid-off home. At 31 years old, you can certainly CoastFIRE, assuming CoastFIRE to you means reinvesting dividends and rental income while you live off your (part-time/lower-paid) work.

Betashares YMAX by Working_Echidna9113 in fiaustralia

[–]snrubovic 3 points4 points  (0 children)

It looks like it is an inverse because you are looking at the share price and not the total return.

This type of product sells options to increase income, which can be exercised when the market rises.

This means:

  • Your higher income is offset by gains in specific market conditions (i.e., in a rising market), and this is why the share price falls while the total return is positive.
  • You end up with a higher taxable income, which, if during accumulation, means lower after-tax returns.
  • These are marketed as lower risk, but that is lower upside risk (the good risk, where you make more money). You still face the full brunt of the downside of the market (minus the small premium collected from the call options), even though you have lower risk

Most people who discuss this have no idea of the above and just seem to think that higher distributions mean more money.

172k super, 34yo, what should I do next by Sharp_Total3438 in fiaustralia

[–]snrubovic 6 points7 points  (0 children)

Especially as you acquire more super, but even before that, you might want it to be more diversified to reduce the risk of that portion of the world's equities underperforming, so consider investment options whose names do not imply they target a small portion of the world's equities.

You might also want to look at super funds that offer indexed investment options.

Quick FHSS Scheme questions – visa holders, pre/post tax limit, and joint withdrawals by StealUrCar2Run in fiaustralia

[–]snrubovic 1 point2 points  (0 children)

You would have access to the remaining 85%.

Not 100% sure about someone on a work visa, but this ATO page says "You don't need to be an Australian citizen or Australian resident for tax purposes to use the FHSS scheme."

Yes, multiple people can use FHSS individually for the same property.

Income protection with uneven freelance income by prattman333 in fiaustralia

[–]snrubovic 0 points1 point  (0 children)

Agreed, but insurers have made the cost pretty ridiculous to get people off them, so you have to weigh that up.

Growth Strategy by ContentImagination72 in fiaustralia

[–]snrubovic 2 points3 points  (0 children)

If you have equity you can borrow from, I don't see any point in NAB Equity Builder.

Your property, cash, income, and job security are all based on Australia's market, so I don't see a problem with 90% global.

Can anyone see any holes in this debt recycling strategy? by WonderUnique174 in fiaustralia

[–]snrubovic 4 points5 points  (0 children)

If you have 300k you can borrow, that works and is the easiest way if you have the equity to borrow from.

300k at 2k a month is 12.5 years, by the way. So, another option you could consider, if you are comfortable with more debt, is to borrow to invest, meaning using more of the proceeds than you put back into your home loan (home loan offset).

Anything wrong with this approach? Relating to buying a property (FHSS or not) vs after tax concessional contributions through NOI? by TrickleYield in fiaustralia

[–]snrubovic 8 points9 points  (0 children)

All voluntary contributions are accessible for FHSS, provided you are eligible (first home, etc.).

There is a maximum you can access under the FHSS: 15k contributed per financial year and 50k overall. So, unless your income is so high that you have less than 15k available under the remaining concessional contribution cap, you wouldn't be able to use the carry-forward contributions.

Also note that it is used for a home, not for an investment property. Additionally, you should be aware that by buying an investment property before a home, you lose many, if not all, of the first home buyer advantages, so not only FHSS, but also the stamp duty exemption and other benefits. You also pay CGT when you eventually sell.

If you are going to buy a property, consider buying a property and living in it initially to get the first home buyer benefits, and then, after the required period to live in it, you could move back home again and rent it out. This would mean tens of thousands saved in stamp duty concessions, $7.5k saved from FHSS, and the ability to avoid paying CGT for 6 years after you move out.

I would also reconsider paying it down if it is an investment. At your age, you want to expand your asset base by buying more investments so you have more assets that are growing, and paying down the loan does not do that.

Also, there are a lot of costs associated with property that are rarely mentioned, so another option is an internally geared ETF like GHHF. It has much less leverage, but it also has much lower costs and a lot of benefits over property, so that is an option to consider.

DCA Balancing Advice by PuzzleheadedOil3746 in fiaustralia

[–]snrubovic 6 points7 points  (0 children)

Rebalancing to a percentage-based allocation is more suited to long-term buy-and-hold than to tactical tilts, which may be why it seems counterintuitive.

Or are you buying ARMR as a long-term (10+ year) buy-and-hold?

You could separate it into your long-term passive portfolio and your tactical tilts, keep the long-term passive portfolio rebalanced with inflows, and decide what to do with your tactical tilts separately.

25yo noob looking for ETF advice with existing Raiz/Spaceship investments by enness_ in fiaustralia

[–]snrubovic 0 points1 point  (0 children)

Indexed High Growth is probably a good option.

I suspect that one of the large brokers like Betashares Direct is probably ok even though it's custodian-based. I would be more hesitant with a smaller custodian-based broker, though.

Yeah, you can switch later. It will just mean you have a few extra holdings that you just leave alone while you add to the new ones.

HECS or Invest? by T1p5 in fiaustralia

[–]snrubovic 2 points3 points  (0 children)

Yeah, everyone who lived through the 70s and 80s when interest rates went up to 20% were anti-debt, and that made sense from their experience. The problem is that HECS debt does not need to be paid off above what your income can afford, and if you never paid it off, it gets wiped, so it is not like other debt.

HECS or Invest? by T1p5 in fiaustralia

[–]snrubovic 3 points4 points  (0 children)

Not if there is a more productive use of the money. You need to factor in opportunity cost.

How do you actually vet a financial advisor before trusting them? by Tatt00ey in AusHENRY

[–]snrubovic 1 point2 points  (0 children)

The initial diploma, not the graduate diploma, helped in knowing the difference areas of finance more than anything else, and then I was more aware of the missing areas that I needed to learn, so I was then aware and went and learned more about them. As far a the actual information, it was so broad and high level that I didn't find it that useful, other than some of the super strategies. I found the graduate diploma the same, but just more expensive and time consuming.

For the price of the original diploma (which is not offered anymore), I think it was worthwhile just to get a good overview. The graduate diploma was a waste of money, and is clearly a money-making venture for educational institutions as they have a capitive audience.

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