Summary:
Bought 1st home, could have paid more upfront but decided to keep money in offset.
Variable component is totally offset now so no benefits in depositing more in offset.
Added 20K allowed money in fixed loan so that is also done.
Mistake I did was didnt plan fixed and variable component properly.
Should I look for another property to invest now?or wait for another year and restructure the loan.
Any recommendation on how I can manage finances better.
Single, 100k income.
Financial Recommendations after buying 1st home.
Timtamdoritos on 28/01/2020 - 09:38
Comments
Not ALL financial advisers are dodgy.
And who do you suggest people take financial advice from? You? LOL
Probably The Greens.
Any recommendation on how I can manage finances better.
Stay away from ozb.
Ozb good at spending money :)
if you don't own anything on the share market directly, i'd suggest learning how to buy an EFT such as IOZ, STW or VAS:
http://www.etfwatch.com.au/australian-index-etf-showdown-ioz…even if now is not the best time to buy, it is worth dipping a toe in and starting to pay attention!
If you're buying into an index to hold long term then today is always the best time to buy.
Ideally you should consider buying the 2nd property (or your 1st investment property).
But you will have to have enough borrowing capacity to support a new loan.
If your current earning is not enough, consider buying bank shares that give you franked dividend.
Slowly build up the portfolio so the dividend income will provide you a stable income stream to support further borrowing capacity.Here my 2 cents: Ultimately, you need to ask yourself what is it that you want to achieve? From what you've posted you're looking for something that will provide an ROI and managing your finances better. In regards to managing your finances better, firstly, have a look at what you can trim from day-to-day expenses. Cut/reduce all unnecessary spend (eg: reduce mobile phone plan, coffee etc..) you'd be surprised at how much you can save. I don't believe you need a financial advisor, you need to educate yourself in your own finances and beware of the ins and outs of your own P&L. In short, run a tight ship and watch it like a hawk.
As for the ROI part, have a look at your debts and liabilities, get rid of them as quickly as possible (eg: credit card debts) or try to avoid buying things you don't need (eg: branded/luxury items for the sake of buying it) or things that are not appreciating assets. If you haven't already, read "Rich Dad, Poor Dad". Basically, treat every dollar you've earned/saved like an employee that works for you - spend it wisely and make it work for you. If you are into real estate, look into REITs as opposed to outlaying a huge deposit into a single property. If you're into shares with diversity and lower risks look at index funds. Bottom line is, educate yourself on yourself and the surroundings and accumulate appreciating assets over your life time.
Hope this helps.
Thanks Mate! This is the best advise and have been following this since day one I arrived here. I am happy with my savings but where I lag is how to make money work? It won't give any return in bank and I am not paying the loan and keeping it in offset because I treat it as approved personal loan at 3% if I need it. I want to reuse it to build something rather than saving me 3% interest. Rich dad poor dad is the next book I will read now.
3% personal loan is dead money. In the absence of better investments keep paying off your home loan because it is 3% less you are giving to the bank.
Either save for another investment property or drip money into shares (dollar averaging).
Rich dad, poor dad makes you poorer and the author richer. It is nothing new. The problem for people is discipline.
You can just google "Rich dad, poor dad" and download the copy for free. You don't really need to read it, the take home message is to have incoming producing (or high capital gain) assets such as a business, shares or property. Use that to buy more incoming producing assets.
If it's not making you more money, it's not an asset.
@arkie0: Well you just flicked mud in many people's faces. Their primary residence is their main asset. Some people are sitting on a million dollars. They'll be crying into their gold plated cutlery tonight thanks to you.
@netjock: Ironic, that is the what the book is trying to teach people. The book also states the large majority of people have such views and as such they will never be extremely wealthy and why the rich get richer. Someone is trying to teach you now, make of it what you will.
Barefoot also tries to teach the same concept via the postcode povos example for all you barefoot fans.
@arkie0: LOL I'm just taking the piss.
Even the loan on my main residence is tax deductible now due to other assets I have. I invest with cash flow and deductions in mind.
There is all these people trying to pitch to me passive income (mostly multi level marketing people) who have no idea how to create real passive income.
I don't give detailed advice here because it doesn't help people because you never have enough detail.
Is the 'first home' the house you are living in, or is it your first investment property?
House I am living in.
You have 2 choices buy an investment property or shares (or super). The 3rd is to invest in yourself to make more money / get a better job / start your own business. I'll assume you're asking for the first 2.
Arm yourself with knowledge on both options before you make a move, too much to go through in 1 post. The ASX sharemarket game is a good basic resource for shares, search other forums besides OzB which is not the best place for info, Whirlpool and propertychat are better. Both options can be complex there are good shares and average/bad shares, different tax implications for both.
Alternatively if it's too hard speak to an adviser.
If your question is "I have to wait another year before I can restructure my loan to allow me to further accelerate the repayment of my loan, so should I buy an investment property?", your answer is no.
You don't go and buy an investment property, simply because you've got a year of "friction" in your situation.
See out the year, and your probably going to shift to full variable based on what you've presented here. Then you can whack as much in offset or otherwise as you see fit.
Investment properties come when you have your PPOR well under control and genuinely have spare cashflow.
Comsec pocket, drip money into the share market. Health Care index. Sure fire winner as the population is greying. Near term might lose some money but long term the fundamentals are solid. Unless they find a drug to reverse ageing, if they do you still win!
I tapped the millennials market in fintech. Brought APT (Afterpay group) 2.5 years ago at a low $3.40ish prices got a return of 1100% in less than 3 years with the current price of $37.00. You don't want to see my capital gains tax bill this year.
Speak to a financial advisor, IMO.