Financial Guidance for My Current Situation?

Lsomeguycalledpaul on 28/08/2016 - 16:22
Last edited 29/08/2016 - 10:03

Hi there,

I’d like some guidance. I understand that providing financial advice over a forum is not really appropriate - but I wouldn’t mind some point of views or guidance as to how to best proceed from here.

Our situation:
  • Male(Me) - Aged 33 - Income ~$240,000

  • Female - Aged 33 - Income ~$147,000

  • Superannuation - Combined - $220,000

  • Cash in bank (Combined) - $300,000
  • Debt - $0
  • My partner has a investment property with probably $100,000 of equity in that she split with her sister.
  • I have no investment properties nor have I ever owned a home.

Current Living situation: Rent Approx $2000/month

  • Married - not yet.
  • Kids - not yet (1.5 years away maybe?)

The long-game here for us to have a nice 3BR property in an area such as Port Melbourne. We’re finding that based on the current market, that would range from $1.1M-$1.5M.

We’re a bit confused about what we should do here.

The strategies available to us are:
0) Do nothing and keep saving
1) Enter into a large mortgage now — the fear of overcommitting big
2) Find something in a lower price point and live there for a bit (avoid capital gains), then look to buy a second place and rent the first place out.
2a) In the area we want to live, which means apartments (i fear oversupply issues in Melbourne)
2b) In a high growth area, probably somewhere we wouldn’t want to live long term.

So what advice can you give us?

If you can recommend a financial planner in melbourne please message me!
Financial

Comments

      • mungicide on 29/08/2016 - 23:27

        just providing another option.
        and don't just simply get into one for the sake of it.
        For example, a recent raising for AHG @ $4.52. After trading halt resume at $4.97. Instant 9% profit in a day.
        rinse and repeat :)
        but not anyone can participate and you won't get $250k even if you want to due to scaleback.

        • [Deactivated] on 30/08/2016 - 00:04

          I doubt a s708 certificate would change your access to this particular capital raising. It's a publicly listed company and they had a non-underwritten component for existing investors (some of which were probably retail investors), so they would've had a PDS, etc - invalidating the need for an s708.

          Further, the placement was priced at a 6% discount to the previous close (using a book build), meaning that most of the people buying the shares expected the price to fall following the equity issuance … so you'd want to have pretty big balls buying that particular stock.

        • mungicide on 30/08/2016 - 08:19

          @sp00ker:
          The component for retail most of the time is very small or non existent. As for my example, the book build open and close within a day with 75% scaleback. As I say you need to back your conviction at this top end of the game. Yes S708 is just a cert , so is uni degree. But more doors are opened but you need to be smart which ones to go through or not.

        • [Deactivated] on 30/08/2016 - 08:21

          @mungicide:

          How would a s708 cert open the door this to particular offering?

        • mungicide on 30/08/2016 - 08:35

          @sp00ker:
          Dont think there was any disclosure doc issued. From memory trading halt on 19/08. Started trading on 22/08. Migjt b wrong :) You need doc / PDS for retail.

        • [Deactivated] on 30/08/2016 - 10:47

          @mungicide:

          I think you're missing my point - just because you have a s708 certificate a broker/underwriter isn't going to phone you up with offerings. You need to establish a relationship with them.

          Check the ASX website. There's an offering document available for the retail issuance. I'm sure the instuitional offering had access to the same information.

          Get a clue.

        • mungicide on 30/08/2016 - 11:24

          @sp00ker:
          of course the relationship is important too.
          i'd checked ASX and yes they raise $90M placement new shares and also SPP for current shareholder.
          There wasn't any documents on the non retail placement (to be settled on 24/08) but there's offer booklet for current shareholder (retail) to be trading on 19/09.
          Guess what, if you are retail, you are already shafted since it's too late in the game as the price has already tanked to the offer price.
          i have long sold before retail get a sniff.

        • mungicide on 30/08/2016 - 16:40

          @sp00ker:
          some more info for those interested:

          1. Clients on the Sophisticated Investor Panel have the opportunity to participate in corporate offers that may not be available to normal retail clients, such as share placements and underwriting agreements
          2. These offers are often priced at a discount to the current share price
          3. Sophisticated investors also have the opportunity to participate in unlisted offerings such as seed capital raisings for private companies
  • garetz on 29/08/2016 - 00:03
    +8

    Congratulations you are the 1%. Don't ask for financial advice here, use your money, like other 1%ers and go get professional financial advice.

    • Kangal on 29/08/2016 - 08:56

      Pretty much this.
      You will get advise from OzBargain.

      But it won't be the same advice other people in your class are taking.
      And so the competition will outstrip you.
      Be smart with your money.

  • [Deactivated] on 29/08/2016 - 07:50
    +11

    Hi I got an income of $99,999,999 and I'm currently living out of my mother's garage (she doesn't know I'm there) but I'm really saving up for a $199,999,998 property I got my eye on, can anyone please give me free and qualified financial advice on a public forum full of people who are not as rich as me?

  • Limitless on 29/08/2016 - 08:00

    $2,000 a month in rent?!?!? With income that high i am surprised you haven't bought sooner! Option 2 would be ideal, you could end up paying less a month on your mortgage than you do on your current rent and own your own home at the end of it. Then use that as an investment property when you move into your dream home.

  • Mrgreenz on 29/08/2016 - 09:52
    +2

    Don`t click on the thread if all your gonna say is

    $xxx,000 dollurs pur yeur and ur asking advice on hur

    Every one has heard it 1,000,000 times before and it adds zero content to the discussion. Should OP seek prodessional advice, yeah, probably. Should he ask for advice on the internet? I would, no one will force you to do what they reccomend will they.

    Someone who makes quarter of a million per year can probably make a rational decision based on what they read.

    • Typical16-bitEnjoyer on 29/08/2016 - 10:03
      +4

      High income doesn't always mean high intellect.

      • Top G on 29/08/2016 - 10:12
        +4

        Maybe if your a tradie fifo worker riding the mining boom(I wouldn't underestimate others however) but a tech analyst for a bank, it would be impossible to keep that position without performing and having your wit about you. That why the story doesn't match.

    • someguycalledpaul on 29/08/2016 - 10:12
      +6

      This. I'm happy to hear advice from anyone and everyone. This is somewhat anonymous, and I'm not really comfortable discussing my financial situation with friends and family for a number of reasons.

      If i take out the 'hur dur' comments, I'm actually left with some rich perspectives, that I appreciate and wouldnt get by going to a single financial planner.

      • abh_gup on 31/08/2016 - 18:55

        PM me.

    • adam149 on 30/08/2016 - 18:54

      How does this rant contribute exactly?

  • RocketSwitch on 29/08/2016 - 09:53
    +1

    I would go with option 2 as well, that's within 20kms of the CBD (don't buy on a main road etc.). I would get out of renting if you want to settle down (meaning, Melbourne is your home and want to start a family).

    From there I would pay off that property and then look to see to purchase an apartment, as you pay off your house and the apartment, with your income, I would keep on investing until you're happy or buy the dream home. Depends on how long you're willing to wait.

    If you want to play it safe and still have all the money, this is what I would do.

  • Top G on 29/08/2016 - 10:01
    +2

    Why not donate to those kids in Africa with $2 Telstra sim packs??? Do it for Harambe.

  • gstfree on 29/08/2016 - 10:10
    +10
    1. Salary sacrifice maximum concessional contribution into super. Consider SMSF.
    2. Buy your house. Put down 30% deposit.
    3. Invest 2 x 650k townhouse. One at Moreland to Preston area and one at Monash Chadston area. Near train station is a must. You can consider to invest using SMSF.
    4. Maintain sufficient level of private health cover and life insurance.
    5. Any excess fund can be placed to share market.
    6. Keep a working capital 20k in daily liquidity account after all investments.
    7. Keep a credit card with 50k limit for emergency use.
    • someguycalledpaul on 29/08/2016 - 10:19

      Thankyou. I like it.

    • geoffs87 on 29/08/2016 - 10:59
      +2

      very thorough, i like it.

      I'm interested to why people recommend pumping cash into super? is it not better to invest out of super when still young, so you can benefit from those invested funds earlier, rather than when your >65/70?

      I'm starting to build up my savings, partner and I both under 30, but i have 500k equity across 2 properties - and trying to work out the best way to manage my finances moving forward - a couple of people have suggested the super avenue?

      • gstfree on 29/08/2016 - 11:09
        +2

        SMSF is not a bad choice if you have decent amount in your super account. Currently the system is not very perfect and there are loopholes. This also means there are opportunities.

        Australia real estste market will not collapse unless the government stop migrants. The demand is still very high.

  • Skramit on 29/08/2016 - 10:51
    +2

    You really need to speak to a financial planner as mentioned above, not so much for the general strategy in the medium long term but mainly so you can reduce your tax bill. Whether that be a negatively geared property or investment loan…. some way of reducing the tax bill would be ideal in you situation.

    Also consider all of the implications of diving in to investments when not married, make sure everything is in writing with your partner - the agreement of how the purchases and payments will be made and whether in dual names or one of your names and the other person as guarantor. It may sound silly but it's always worth paying a lawyer a couple hundred bucks now to potentially save you both tens of thousands later on if things get messy. So make sure you get professional advise in this area first. I'm not saying "get a pre-nup" type agreement necessarily, I'm just saying make sure you understand your rights and obligations to any investments before signing any papers and what could happen if you don;t have things in writing if your partner runs off with somebody else in 5 years, or if the investments go really south, who is on the hook for them with the bank etc.

    For the record, if it were me I'd be looking at a balance of property and shares, negatively geared to reduce your tax, and also be pumping the maximum you can each year into super which also reduces tax.

    Good luck.

  • Gmetal on 29/08/2016 - 10:58
    +1

    I don't have much advice to give, but just want to say don't listen to the (profanity) on here who are having a go at you for being in a different position to them.

    You've probably worked hard to get where you are, and probably by making well thought out and researched decisions, so finding out what other people have experienced is a good thing. Even listening to a single financial planner about what investment to make is a bad idea, so nothing wrong with asking around. Also to address the why are you on ozbargain if you are rich thing- rich people dont stay rich if they arent good with spending!

    • FatBlanket on 29/08/2016 - 17:01
      +2

      News flash, successful people usually don't work harder than unsuccessful people. Especially in Australia. I find the hardest working people are at the bottom (where they belong muwahahaha).

      • Gmetal on 29/08/2016 - 20:12
        +1

        Never said 'work harder', I simply said 'probably worked hard'. It's just this tall poppy syndrome that we have here is so ridiculous, why do people think it's ok to attack those who are better off than them (even if they are self made).

        Even if you down play their effort (which is often considerable), why should people feel bad about making smart decisions and getting lucky?

  • fruit on 29/08/2016 - 11:39
    +1

    Stop leaning and start lifting…

  • Livert on 29/08/2016 - 14:01

    Don't know if it has been mentioned but i would get a PPOR that has high capital gains potential. Generally large landed old property. Interest rates are low and given your position, you will pay it off in no time. I was in a very similar situation as you about 8 years ago and it has paid off very well.

    • someguycalledpaul on 29/08/2016 - 14:08

      Thanks!

      I'm guessing for this scenario to work, we either need to grab a bargain in an established suburb, or alternatively go out a little bit into an area with the high capital growth. Alternatively wait for the Apartment market in Melbourne to Collapse, then hope that there is recovery… dont like the chances of this though

      Good food for thought.

      • Livert on 29/08/2016 - 14:44
        +3

        I stick mostly to city fringe suburbs. Pay for a house that is worth close to its land value. It's the land that will always appreciate. Not the house.

        I tend to stay away from apartments as I don't know enough about them. The way I look at it, you can always make more apartments but not the land they are built on.

      • jellykingdom on 30/08/2016 - 09:22
        +1

        I wouldn't go with the whole "wait for it to collapse/get cheaper" method. We don't even know for certain that is going to happen, and also they're pretty vague on what defines a collapse. I heard maybe -5% or -10% at one stage, which doesn't even offset the additional cost of waiting 1 year to buy a place

        They like to throw around big words like 'collapse' without backing things up

  • patinadiary on 29/08/2016 - 15:29
    +2

    Here is my 2c worth…You both are single, currently, debt is cheap and you both have stable jobs, leverage your buying power to buy a ‘modest’ house (no apartments or townhouses) up to 1.8million in Glen Iris, Malvern East, Ashburton belt or down a little south to Ormond, Hampton, Sandringham belt. 6-10 years down the line when your kids are ready to go to private school (assumption) you are close to those schools and your then modest house is worth a fair bit more. You can then leverage that to buy investment properties or renovate the family home to suit your needs. I’d steer clear of Port Melbourne, as no one knows what the future of Fisherman's Bend is going to be, if that takes off, the oversupply of accommodation in that suburb is sure to have an adverse effect on Port Melbourne. Don't worry about the market turns too much, think long term, in the big scheme of things if you paid 80k to secure the house you really wanted today one would simply dismiss it as a minor hiccup 30years down the line.

    I wouldn’t worry about super too much, given that your salary is high and you are just 33 years old, you have ample time. If your income stayed the same even the standard contributions will add up quickly to leave you with a decent balance when you retire.

    This is not financial advice, I’m simply telling you what I would have done. All the best.

    • someguycalledpaul on 29/08/2016 - 19:09
      +1

      Cheers. Thanks for the insight of Fishermans Bend. I didnt really think about that - but you are right.

  • peterw1 on 29/08/2016 - 15:44
    +24

    Based on both your ages and income I would suggest you have baby. You assume that this is easy. It is, so long as no miscarriages, infertility etc. Most people in your age bracket if in a position to start a family would agree that they should've started earlier, particularly if having greater than 1. you will appreciate this advice when you turn 50. At present if conceived now your eldest child will just be finishing high school, then you have to wait for the others to go through school. Wealth comes and goes, fertility typically doesn't and nothing gives as much joy or fear as children. My advice, invest in a family with children.

    • BartholemewH on 29/08/2016 - 22:51
      +5

      I am 34 and my son is nearly one. I agree with the sentiment that we should have started earlier.

    • someguycalledpaul on 30/08/2016 - 13:12

      Thankyou. Well said.

    • danyool on 09/09/2016 - 15:02

      Agreed!

      If you're wanting private hospital for birth, she will need to take or switch to a policy that covers pregnancy 3 months before starting to try as there is a 12 months waiting period but 'only' 9 months gestation!

      Also, she should start on foliate (and be healthy) before hand too.

  • FatBlanket on 29/08/2016 - 16:57
    +10

    First of all, this isn't the best place to ask for financial advice. You should really go to somewhere like Yahoo answers or maybe ask the staff at Kmart or Big W. And secondly, cya!

  • JajaMinx on 29/08/2016 - 17:53
    +4

    I honestly do not see this as a legit post other than to brag about personal wealth.

    Who in the right mind would ask for financial guidance on Ozbargain?

    Anyone with a legit reason to seek financial guidance would consult a financial planner or sign up to a forum specifically for the required purpose.

    • someguycalledpaul on 29/08/2016 - 19:08
      +1

      Sorry if you feel I'm bragging here, I'm actually not trying to. There are very few places you can be honest and get feedback relatively anonymously. As I mentioned, I dont talk about this with family, or friends. I'm generally very reserved and dont like people knowing my business.

      • CandyMan on 29/08/2016 - 22:58

        At first when i read the post i thought you were joking. But then perhaps you took joe hockeys advice and found a higher paying job. I have no advice but wold like to congratulate you and wish you good luck

  • chumlee on 29/08/2016 - 17:57
    +6

    Your income is great but that's only half the picture. What's your spending like?

  • DingoBilly on 29/08/2016 - 18:11
    +5

    This is bizarre. Like I don't earn anywhere near as much as you, yet seem to think more about my financial future and realise that a random internet forum is a stupid place to ask how to spend $300,000….

    I guess if you make a lot you don't really need to think too much.

    • someguycalledpaul on 29/08/2016 - 19:06
      +8

      I appreciate your point of view. But respectfully, my take is different …I've got some very good insights from a number of people, some of which allow me to do further research before engaging with an independent financial adviser to take next steps.

      Some posts (like yours) - increases post count, enables you to get some high-fives / +1s from like minded people but generally add no value.

      You can sit and think I'm stupid, posting at a "stupid place" but ultimately I've got 30+ peoples feedback all with diverse perspectives and experience.

      I feel like the winner here.

      • Excelsior on 29/08/2016 - 19:59
        +6

        I feel like I say this all the time (but just shows you how common this is) - people who have nothing to contribute or post negative comments are usually those speaking out of jealousy or spite. Haters gonna hate.

        • Dr Techno on 29/08/2016 - 22:20
          +1

          I don't think previous comment is out of any bad feelings. I also find it bizarre too. A few years ago I had $300k to invest (on a very low average salary), I've invested the best I could for my own circumstances doing my own research, calculations and gut feeling for whats best for me. Everyones situation is different, so you have to determine whats best you for, even if you do see a financial adviser.

          Actually OP sounds more like first home buyers hesitation more than anything. OP is not married so that might introduce future complexitiy. (hopefully not but you never know)

          Good job to OP for their salary, I'm definitely working for peanuts myself if that's the case! ha!

        • DingoBilly on 30/08/2016 - 13:29
          +3

          Wasn't about hate or not contributing, more just potentially calling him out. Just seems like a really odd post. You generally don't get paid that sort of money if you're an idiot, and generally if you're more intelligent you've planned all this stuff out already.

          So it seems really suspect and somewhat bizarre to be earning close to half a million dollars and have no idea what you're doing with it when a lot of people here I suspect would be earning more along the lines of under $100k and be giving advice to these people. If anything, we should be getting advice from them is what it seems like is the point I'm trying to get across and why I find it bizarre.

      • DingoBilly on 30/08/2016 - 13:24

        True, but the thing I question more is the quality and diversity of the actual replies. Like I'm sure I could also do the same on a World of Warcraft forum for example, and get the exact same benefits, so from that perspective it's great. It just seems very odd and fake is all.

        That is, this is a great idea if it's your very first basic step into the financial world and you have no idea what you're doing, but I just really question how you manage to get into your position without already having this basic information. It's like you accidentally have a lot of money and are successful without having tried. I'm nowhere near your salary or position and am a number of years younger but have spent a number of years already researching these things and have been through a number of options.

        I guess it's just really odd to me and that's all I wanted to say and I almost actually worry about you if you are in this position without having already known this sort of information. Maybe just start thinking and planning earlier is the advice I'm trying to give? Also start thinking about superannuation and things like that as well just in case it's not in your mind as that's something that's better to plan earlier rather than later.

        • someguycalledpaul on 30/08/2016 - 14:43
          +1

          appreciate your concern but you dont need to worry about us. we'll be fine.

          Career success and long term financial success are different.

  • pulpfiction on 29/08/2016 - 20:19
    +3

    Dude, to be brutally honest, you have really low savings compared to your combined income, which tells me you need to get your savings and spending habits in order. A financial advisor will help you greatly. Not sure if you have a good accountant, but definitely worth their weight in gold, particularly if you're consulting/contracting.

    One more thing. When it comes to buying property (or investing in any asset), you need to be confident in your own mind that prices and yield will be in your favour. Certainly not starting a property investment debate here, you just need to go in with eyes wide open.

    What side of the city you on? If it's SE then I can put you in touch with someone.

    • someguycalledpaul on 29/08/2016 - 20:22

      Hi Pulpfiction - thanks - check your PM :)… eek I cant PM you - if you could send me through some details that would be great.

    • stingy-oz on 29/08/2016 - 22:31

      I'm in similar boat. Needed to invest in SE. someone to suggest?

      I'm similar boat with OP around the income but I have kids and wifey and I runs a business too.

    • pulpfiction on 31/08/2016 - 21:59

      Shot you both a PM and fixed my settings! :)

  • Zachary on 29/08/2016 - 21:47
    +1

    Damn, 380k$ a year - I'm jealous. :P

  • [Deactivated] on 29/08/2016 - 23:05
    +3

    Go see a financial planner

    This reminds me of an old joke - "What do you call a doctor who dropped out of medical school? Dentist". The same applies to financial planners.

    Your average financial planner is an idiot, who's barely passed high school and has some professional qualification in 'financial planning'. Occasionally, you'll meet one that has a university degree, but they've most likely failed in the main stream financial services profession (accounting, economics, investment banking, investment management, etc) and ended up as a financial planner.

    In almost all cases, your financial planner wont be making 380k/year (or anywhere close) and so they have no real qualifications to tell you anything useful.

    Sure, if you need help forecasting certain scenarios like, how much money you'll need for 3 children at university vs 2 or 1 child at private school vs 2, then a financial planner might have access to software that can help with that, but I'm sure you're more than capable of doing this in excel.

    I have the following advice for you:

    1. Don't rush in to buying a home. You're young and doing well in your career - who knows where it'll take you. Owning a home will only tie you down.
    2. Every 2nd reply in this thread is about buying an investment property. There's a real FOMO (fear-of-missing-out) culture among the Australian middle class, when it comes to investment property. You're not middle class, so don't rush into property investment.
    3. Don't make any investments relying on a 380k/year income, eg $2m house or 6 x 300k apartments. With children on the horizon, the next 15-20years of your life will be 'high expenses' and possibly single income for some portion.
    4. There's a few ways to minimize tax - mainly around investment income, superannuation and salary packaging - make sure you're making full use of them.
    • someguycalledpaul on 30/08/2016 - 07:28
      +2

      Hey mate,

      Thanks for this. Agree with the Fin planners - I'm sure there is some good ones out there… but I am was one uni subject and a test away from certification. So the bar is pretty low if i'm honest.

      Appreciate your insights!

      • [Deactivated] on 30/08/2016 - 07:44

        Agree with the Fin planners - I'm sure there is some good ones out there

        Financial planners might work well for people on middle incomes (say 100-200k in Sydney), who's accumulated a bunch of money in super and are close to retirement. There's several things a financial planner can help with.

        There's actually quite a limited set things a financial planner can do for someone young, on a high income:

        • super / life insurance
        • tax minimization
        • investment (property, shares, term deposits, etc)

        There's obviously some overlap in these areas. None of these areas are 'rocket science' - just need spend some time on google to understand them. A financial planner might be good place to start and get a broad picture, if you lack knowledge some area.

    • abovethelimit on 30/08/2016 - 14:53

      This I agree!! Have seen few mates buying properties based on combined income assuming that kids are many moons away and one oopsie moment and they were left puzzled on how to service the high mortgage on a single income. He had to rush his wife back to work purely to keep up with the repayments but didn't take into account the childcare costs. It got the better of them and they have now sold the property and downsized.

      Another similar example but this time borrowed the maximum they could borrow at that time on the low interest rate then but never accounted for rising interest rates or have a buffer for a rainy day. Sold up and back to renting now. Where I am going with this is…don't bury yourself in debt. Ensure the loans you have you can service on a single income or when your income goes down. If you can't sustain it then you can't borrow it….banks don't care as they want you to be in debt with them for life.

      FP's - I speak to few of them on a given situation, write everything down and see which one will benefit me and I will execute it myself.

  • Wombatman on 30/08/2016 - 03:30
    +2

    First of all, congratulations to you and your partner. However, if I take into account your combined income of 387k, and your age, you're not wealthy. I would expect you to have at the very least $1m in assets. Having said that, you are in perfect position to make that happen quickly if you take the right steps. Concerning the house, I can't understand why aussies are obsessed with them. I respect that, houses do feel good, but let me tell you what I would do if by some magic I was no more a uni student from the third world:

    1. move to a cheaper place temporarily (even a shared house will do).
    2. Save 300k yearly.
    3. Build an emergency fund of 4 months` worth of living expenses. (Ubank for eg.)
    4. ~30% of savings goes in High yield bond funds.
    5. ~70% of savings goes in Exchange traded funds or Vanguard index funds (mostly US market)
    6. Concerning SMSF, will have to do a bit more reading on that.
    7. Rinse and repeat.
    • [Deactivated] on 30/08/2016 - 07:31
      +1
      1. Save 300k yearly.

      How? What about tax? 387k would only leave you ~280k after tax.

    • someguycalledpaul on 30/08/2016 - 07:33

      Hi,

      cheers. There is a reason for the lack of savings on my part - something I will live to regret but I can only move forward. Luckily for me thats all in the past and we have the future ahead for me to get this right!

      Appreciate your views on the housing market - and more so the different perspective on use of ETF rather than housing investment.

      Paul

    • jenkemjunkie on 30/08/2016 - 17:27

      This post should be given a lot more credence. I've met so many high cash flow, low wealth, financially inept individuals.

  • TtiGeR on 30/08/2016 - 05:29
    +1

    Your savings are a bit low considering your income.

    My brother is a bit younger than you and on a slightly lower pay comparing to you. His wife is still studying so no income.

    Last year, they bought a new apartment in Sydney (lower north shore). He was able to offset the entire mortgage with his savings. Paying $0 interest but keeps the liquidity. He still has about 150K savings now.

    Try to put aside a bit more each month or cut down a bit on luxury (or unnecessary) spending. You will have a lot more savings soon.

    When he was 23, his full time pay was about 57K, but he managed to save 60K (after tax) that year. Of course he had a second job (teaching). He's always keen to save and only spend his money on necessary bargains found here. The interest rate was a lot higher at the time though.

    Now he's pretty much free to spend on whatever he likes without worrying about property / rental ever.

  • Confused1 on 30/08/2016 - 07:44

    Cash is the king at the moment. Stock markets are all time high. Chances are higher stock market to go down rather than up. Real estate prices peaked and unlikely to extend significant gains for next few years (unless if you want to wait for 10 + years). Having said that, I dont believe that it will crash either.
    If we look back, we have seen a recession every 7-10 years which is just about the time. What triggers recession? no body knows. Brexit? China slow down? euro disintegration? or usual US recession? Trump???
    I think we are in the wrong period in the cycle of boom and bust.
    Gold prices goes in opposite direction of stock market and real estate. Not a bad idea to have some gold, in case stock market and real estate goes down - gold will go up. otherwise just sit tight and wait for a good opportunity.

    PS: These are my personal beliefs and I am not an expert. I was wrong every time I predicted in the past!! Please do your own research and consult a financial adviser.

  • T1OOO on 30/08/2016 - 07:54
    +1

    Pay for professional advice.

  • Hotpotcorn on 30/08/2016 - 07:56

    how do people earn $240,000 a year? is that before tax or after tax?? after tax more like $150,000

    • brad1-8tsi on 30/08/2016 - 08:49

      Get educated, work your butt off, be smart enough to make yourself essential at your work place, be agreeable in the office and network.

      Look for opportunities, stretch yourself, don't be afraid to ask for more money.

      • Hotpotcorn on 30/08/2016 - 09:50

        Is 240000 after tax or before tax because the government will tax nearly 50% for such high income

        • [Deactivated] on 30/08/2016 - 10:11
          +1

          No - only the last 60k would be taxed at 49%.

          The average tax rate would be close to 35%

        • brad1-8tsi on 30/08/2016 - 14:30

          It doesn't matter. You get taxed what you get taxed. Some people like my missus don't try & reduce their tax at all and throw it at the government like a fool. Others, like me, tweak a few things to pay a bit less.

          I've never knocked back a promotion or extra income because "I'll have to pay too much tax" or my favourite "I'll lose too many government benefits if I take a higher paid job."

      • No ONE on 30/08/2016 - 22:13

        Thanks Joe Hockey

        • brad1-8tsi on 31/08/2016 - 09:17
          +1

          Funny thing is, I'm a Lefty and have been for 40+ years.

          There's nothing wrong with having ambition and trying to do your best.

        • No ONE on 31/08/2016 - 14:35
          +1

          @brad1-8tsi: Being ambious is fine. What I meant was, it's not easy to get to the $250,000 p.a. income, that's easy said and done. People are finding it hard to get even a job that pays everage $60,000 - $65,000 salary. Being ambious does not directly contribute to $250,000 p.a. income. Take a look at graduates who are struggling to find even job that pays minimum wage.

  • porsche26c on 30/08/2016 - 08:02

    I would buy a family home especially if your considering having children. I wouldnt want to be in a situation where your moved on after 6-12 months on a continual basis with children. Buy something that you would love to live in for a long period of time. As you pay your mortgage off you can invest at the same time. I would say wait for 5 yrs and then look at investment once you have your mortgage handled. with your incomes it will be easy.

  • brad1-8tsi on 30/08/2016 - 08:47

    Get into the property market. Find something you are willing to live in for ~$600k-$800k. Pay it off (or nearly) over 3 years. Then bump.

    Smart money would buy investment property and instal tennant with associated tax breaks and rent themselves but I like having my own place as I'm a DIY guy and like renovating.

  • [Deactivated] on 30/08/2016 - 09:56
    +10

    LOL at everyone that thinks expenses are fixed and wonder "where all the money went". You can earn double what you do today and it makes hardly ANY difference. You buy the $6 shampoo instead of the $3 shampoo, holidays are a bit nicer, Watties instead of Home Brand, same house on a better street, you replace your fridge after 6 years instead of 12 years. For 99% of people almost nothing actually changes - you continue to live within your means, and if you think you're special and great at savings and it wouldn't apply to you, you're dreaming.

    • [Deactivated] on 30/08/2016 - 10:09
      +1

      +1000

      They should frame this quote and put it up an banner on the front page

      • [Deactivated] on 30/08/2016 - 10:47
        +6

        Thank you. Newsflash to the downvoter, living within means is not exclusive to your little struggle in life. There are people getting by with even less than you and wonder where all YOUR money went!

    • brad1-8tsi on 30/08/2016 - 14:33

      Thoroughly agree.

      The year after we paid off our mortgage, we went a bit silly and there was no extra money in the bank after a year. We did buy lots of CDs, eat lots of pizza, drank better wine and went on several really good holidays though.

      We called it our "gap year" and knuckled down again and bought another house (and another mortgage). Sometimes you have to be forced to save.

    • syousef on 30/08/2016 - 19:42
      -1

      You don't take it with you when you go. The nicer holiday (maybe overseas instead of a couple of hours drive away) IS living better and IS a big difference. Paint brand may or may not matter. Having a newer well maintained fridge will actually pay for itself in the long run if it's more efficient.

      If you really think it makes no difference, why aren't you giving away your cash?

  • peachesforfree on 30/08/2016 - 12:08

    Most trusted advisers : http://www.app.mosttrustedadvisers.com/

  • Nicko11 on 30/08/2016 - 16:07

    If you are after happiness go and give all your wealth to people who are suffering and stop the focus on greed ie what you can get.

  • jenkemjunkie on 30/08/2016 - 16:09
    +3

    High Wealth clients are known as whales in the financial industry. Don't be another, it's not that hard to get a good understanding of finance on your own. Be wary of being gouged by financial advisors that prey on individuals that think they need a 'specialised service', away from the common folk. 4 Pillars of Investing is a good starting base (although it is American Centric so you can disregard a lot of the Roth 401K and IRA account details) - but the fundamentals of investing hasn't changed since 1920.

    Invest in a split of bonds and index funds. 40/60 ratio and maybe 20/80 depending on your risk tolerance. Then as you get comfortable you can diversify those asset classes further.

    I can't talk about property because I choose not to own my own rental properties. High capital outlay, minimal returns and gambling on the 'safe as houses, capital growth mate' is not my interest.

    On another note, If you want kids probably best to do it before your misses starts getting older than 35, no amount of money can fix birth defects

  • HeartFeltAxe on 30/08/2016 - 16:16
    +1

    I suggest creating a CS:GO lottery website and scam 10 year olds. Then you could buy a fancy 500k house!

  • itbargainhunter on 30/08/2016 - 16:31

    I found it so hard to believe a guy so smart like you earn 240k per year but still hand over almost 100k as income tax per year to ATO.

    If it is for real you should sacked whoever been doing tax for you. Anyone not as dumb will suggest you to do -ve gearing to avoid paying income tax at marginal tax rate. You could easily save 60k on tax per year.

    In short, -ve gearing even if it means big mortage as it will drastically reduce your income tax. Also package your salary if possible.

    Learn you tax. Nothing pays better than knowing your tax in Australia.

    • abb on 31/08/2016 - 13:03

      Yes, take out a massive loan and pay many thousands of dollars in interest every year. This is a great strategy.

      • Sincerely,
        Bank Shareholders.
    • Zachary on 05/09/2016 - 15:02

      I thought you get taxed a maximum 30% each year? Or is this different for the really high income earners?

      • itbargainhunter on 05/09/2016 - 16:18

        Every $1 earned beyond 180k and over ATO tax you 45c. This is what ATO called Marginal Tax Rate.

        • Zachary on 05/09/2016 - 19:35

          Jesus…45% tax rate after 180k…….so how does this work mathematically? Lets see:

          380k for simplicity's sake. Difference between 180k and 380k is 200k. So he would get taxed 90k of that. and the other 180k, he would get taxed 54k. So in total, he pays 90k + 54k = 144k in tax a year?! After tax that is 380k - 144k = 236k and that doesn't including expenses or bills to be paid off for the year.

          So he's taxed about 38%.

          Did I do it right?

          If it was me, I would still have plenty left to go around with. Might be able to buy a brand new car every year! hahahaha

  • onlyletters on 30/08/2016 - 16:35

    All that money and your asking the internet for financial advise? It seems more like your boasting about how much money you have or you want to be robbed.

  • Oz80085 on 30/08/2016 - 17:11

    With $300,000 in the bank and very high incomes to service the loans, I would be buying 3 (or 4!) investment properties. Just make sure you crunch the numbers to ensure that your properties will be positively geared even in the case of a rate rise (not on the cards, but will happen eventually). It'll take some serious hunting to find the right investment properties though. That's where a trusted buyer's agent comes in handy. If you are risk averse, then maybe only go with two investment properties and reduce your overall LVR (loan to valuation ratio). Kudos on your financial position though. You should be set to retire early the way you're going. I'm on $135,000 and have one property and am saving like heck for a second!

    EDIT: You should definitely look at some tax reduction strategies too.

    • May4th on 30/08/2016 - 17:35

      I don't necessarily agree with the preoccupation with positive or neutral gearing an investment property. Cash flow is clearly not the priority in his situation - tax effectiveness would be a more pressing objective on his marginal rate. you should be trying to INCREASE your LVR so you are borrowing as much as the bank will let you, and park your savings in the offset account or on the mortgage for your PPOR to maximise tax effectiveness.

      same principle applies to any investment - don't pay more than what it's worth but i wouldn't look past a healthy investment with good capital gain potential just because it's negatively geared. also keep in mind depreciation which will take another chunk out of your taxable income

      • Oz80085 on 30/08/2016 - 17:39

        Agreed. As I said in my edit, tax reduction strategies need to be looked at. Negative gearing could be a part of that. Personally, I would prefer to have my investments making positive income as well as capital gains.

  • syousef on 30/08/2016 - 18:02
    -3

    Almost a quarter of a mill a year for you alone and asking for financial advice on Ozbargain? Really? Get an accountant!

  • chrisoz on 30/08/2016 - 18:29
    -1

    Combined income of $387,000 and asking for financial guidance on Ozbargain……..

    You can afford a financial advisor with the change you have under the couch.

    • [Deactivated] on 30/08/2016 - 18:34
      +2

      A financial advisor? Some guy with a Tafe qualification from Deakin? I don't think so.

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