What's Your Financial Plan?

How old are you and what's your financial plan?

I'm curious to hear different opinions so I can improve my own.

Comments

  • +2 votes

    Swing trades in DOGE

    • +1 vote

      ๐Ÿ• doesn't swing and is unpredictable. It ๐Ÿš€ of every time the CEO ๐Ÿฆ.

  • +1 vote

    Pay off my mortgage before I'm 50 (11 more years), maybe get an investment property at some point, can't get one now, have enough for a deposit but wouldn't be able to borrow enough to buy a place. Should really figure out how to invest some money rather than keeping it all in my offset account.

    •  

      This is me, but 5 years younger (trying to aim to pay off the place before im 42)

      Part of me is also feeling depressed that I have to do something substantial (big share portfolio or buy another property) in order to feel safe in retirement though lol…

  • +14 votes

    My plan is not to waste my life slaving away in a 9 to 5 chasing money to buy things I don't need

    • -1 vote

      What about your house?

      • +9 votes

        Why need a house when you have a carboard box

        • +1 vote

          Life is good when youโ€™re a cat

      •  

        Live in a tent.

      • +1 vote

        van life or tiny house is the future.

    • +1 vote

      I dig that minimalist life too

  • +1 vote

    just about to turn 31, got a mortgage at 25, no debt besides house.. got into stocks mid last year 5-10yrs ill be retired. (well thats the plan anyway :') lol )

    • +1 vote

      How on track are you to retiring, what's your income?

      • +12 votes

        im just a full time retail worker, so absolutely f*** all

        • +7 votes

          thanks for the laugh

  • +1 vote

    I just graduated from graduate school, so I guess pay back those loans (I went os to study), then, idk buy a house where I can have BBQs in the yard and drink tinnies outside where it's warm? Guess I don't have much of a plan haha.

    The actual plan is pay down the student load, max out contributions to retirement fund, save for a house deposit while putting a bit in stonks, then bbq outside and drink tinnies :D

    I hope by the time the cybertruck comes out I'll be in a position to buy one haha

  • +1 vote

    Live your life to the fullest.
    YOLO ๐Ÿ˜ท

  • +8 votes

    I work and put 80% of my income in ETFS, Index Funds and Spaceship universe, averaging about 25% a year returns. Mortgage in 10 years and use the interest from the investments to pay off the mortgage and keep growing my wealth for nothing.

    Alongside my 9-5 Job I work Uber Eats and Menulog and get almost everything I own or buy as a tax deduction as well as $30-$50/hour depending on how busy it is.
    During deliveries I also upskill by listening to pod casts and have educational videos running.

    And I still have a couple of bitcoins from back in 2012, these are going to be held indefinitely, once BTC hits 100K I'll sell one and put it back into stocks, then the other 3 I'll hodl til 1 million

    • +2 votes

      If what you say is true, I tip my hat to you.

      Working two jobs essentially plus investing at 25% pa is like turbocharged earnings.

      Most professional funds with a army of highly paid analyst earn less % than you. And you do that all on the side of 2 jobs.

      • +11 votes

        He's quoting short term returns.

        •  

          He owns bitcoin from2012.
          He must be doing alright

          •  

            @cloudy: Anyone who quotes that is an amateur name dropper. If you knew it would grow to this level, would you only have a couple?

            • -2 votes

              @ihbh: Bought it for a bit of a kek when I was at Tafe, found my wallet earlier this year and just held them.
              It's always been out of my budget to buy a single coin nowadays but if it dips down to 12K again I'll buy another 5.

      •  

        It's mostly just Spaceship that's going full steam ahead.
        All the other funds are at 5-10% a year so that's what it averages out to

  • +3 votes

    Live long and prosper.

  • +21 votes
    1. Invest in your health even earlier than your finances. You don't want to work your arse off and retire to live the last years of your life in a sickly state.
    2. Develop a purpose, have broad interests in life
    3. Remember, life is about the journey, not the destination
    4. Minimise your spend - directly in your control
    5. Invest early, regularly, and diversify.
    6. Use a sensible amount of leverage - ideally when interest rates are high and will fall over the long term, not the other way around.
    7. Test your destination to adjust your journey if necessary - e.g. if your goal is early retirement, and your investment portfolio has grown, try retiring for a few years without conventional work income and see what it's like, what you have to modify in your life, and what opportunities are available.
  • +2 votes

    Educate yourself, build skills, experience, expertise, knowledge.

    Seek to be in a position where your skills are always ratcheting upwards and therefore your income follows.

    Spend less than you earn.

    Invest in assets that will grow over time.

    With a touch of luck, you eventually get to the point where your assets are generating firstly sufficient growth that the increases gained over a cycle from growth are higher than you are adding through savings, and secondly that they can generate a substantial level of income such that you start to be able to make real choices about your need to continue to work for a living.

  • +16 votes

    Find a rich partner.

    • +4 votes

      Definitely the way to go- it might sound mercenary but it's smart. It is just as easy to fall in love with a rich man as a poor one and money can overcome a multitude of issues. If someone has a lot of baggage at least they can pay someone to carry it for them.

      • +1 vote

        It is just as easy to fall in love with a rich man as a poor one

        its also just as easy to fall in love with with a rich woman than a poor one.

        • +1 vote

          Yeah, if you donโ€™t mind settling on their looks and personality

    •  

      Make sure rich enough that on divorce the lifestyle can be maintained.

      Unfortunately for most people they are rich enough to live okay as a couple but when you split both would be lucky to be lower middle class.

  • +6 votes

    Early 30s, house is paid off. Now we are investing in shares with and without leverage, in roughly 5 years we should be 'FIRE' on paper. If everything goes our way XD. Average savings rate over the last 10 years is 50%+. When we were paying the house off the savings rate was in the 70% mark.

    • +1 vote

      What is FIRE?

      •  

        Financial Independence, Retire Early

      •  

        "Financially Independent/Retire Early"

      • +17 votes

        Forced Into Regular Employment

        When their leveraged share portfolio goes kaput.

  • +1 vote

    Mid 30s here. About 16 months ago my wife and I put all our life savings into buying a small business. Very risky and probably dumb but fortunately it has worked out well for us financially. At the moment I am paying down the mortgage significantly as well as investing in VDHG monthly. The mortgage should be finished this time next year at which point I'll really start loading up into the ETF until we are ready to retire in a few years.

    Financially it's worth it but it's a really hard slog both mentally and physically. We're both now working 7 days essentially - my wife is at the business 7days and I still have my regular weekday job and I go to the business on weekends as well as doing a bit of admin type stuff for it each day. But I figure busting our butts now for a few years is better than working for another 30.

    •  

      Why VDHG over say VAS and VGS

      • +1 vote

        Simplicity.

    •  

      what type of business did you buy and what type of considerations went into the decision?

      • +2 votes

        It's in the retail sector - my wife had several years experience working in the specific industry and has seen other owners make good money from them (and 1 or 2 fail). Most small business books are cooked so not a lot of point looking at them, though I did request to review them so I could at least get some kind of indication of the turnover. It was a real pain to get them from them but eventually they provided. I also staked the business out a couple of times to monitor customer activity. There's a cafe out the front so that made it pretty easy. I also had other family members do the same at different times throughout the week. When they figured we were serious they let my wife go work there for a day to see how it is. That was a positive sign in itself as they didn't seem to be hiding anything.

        It was being sold by a couple and we heard through the grapevine that they had two shops - one that the wife ran and this one that the husband ran. The husband ended up having an affair with one of his staff and so was no longer allowed to have his own shop. They are still together and running the other shop as a couple. The best businesses to buy are the ones being sold due to a family breakdown or some other non-business related event so that was another positive factor.

        The thing that concerned us the most was the high rent. It's nearly $10k a month and would be a sure fire way to go broke if it all went bad. Fortunately turnover was better than we expected and we've also been able to improve it by about 30% since we took it over. The rent still is way too high IMO and we should be able to negotiate a better rate when the current lease is up.

        • +1 vote

          Wow!! $10,000 per month rent! Hope you are selling a lot of thingamajigs!

          Does that include outgoings?

          •  

            @danyool: Yes that's including outgoings and GST.
            There's several empty shops in the centre and turnover of business ownership is high so it's frustrating they won't just lower rents.

            I think it's something to do with bank valuations being based on per sqm rent or something but surely they be better off if all shops were rented out and stable.

            •  

              @cainen: Ok. Well, including outgoings is a plus, but yeah, can't comprehend that much rent for a small business. All the best to you and your wife.

              Hope they review it soon!

              •  

                @danyool: As it turns out staffing is our biggest expense by a long way (around $28k pm) but at least it's a variable expense so if it all goes to poo we can at least minimise it.

  • +3 votes

    Marry up

  •  

    39 male single no kids . No super. Self employed around 100k Per year. I Own my 800k PPOR. 2 investment properties 1.3 total. Owe 620 combined. They pay for them selves I don't put any money in now. I now put 25k a years into ETF's and save some cash aswell. So anyone who tries it can happen. Read the barefoot investor.

    • +5 votes

      How leveraged are you on property?

      I see so many people who act like they've made it for buying property, when in reality a single market squeeze would put them in the gutter.

      •  

        How leveraged are you on property?

        You might have missed the below from the above.

        I Own my 800k PPOR. 2 investment properties 1.3 total. Owe 620 combined.

  • +5 votes

    I'm married in late 20's. Own a unit which we bought for $650k a few years back. Only about 25% equity. Has gone up in value 20% so okay with that. We have 30k in a savings account and 30k in shares. Try to grow both at an equal split.

    We also know friends that died early is life and know it can happen to anyone at anytime so we have travelled overseas 7 times in as many years, own a boat and enjoy weekend getaways etc.

    Next step would be growing our savings account to about 100k then selling the unit and buying something to live in until retirement. Compared to friends and family of similar ages we are about average in our progress.

  •  

    Always bet on red.

    You win some, you lose some.

  • +17 votes

    Some financial principles I've use since the start of my working life. Now 53 and looking to retire in the next few years without any money worries.

    1) Live within your means.
    Sounds simple, but if you spend more than you make, your financial plan is going backwards

    2) Know your worth
    Truly understand what you are good at and have a "continuous improvement" mindset. If your current employer doesn't value you, move to somewhere that does.

    3) Invest what you save based on your risk appetite
    You need to be able to understand the potential risk / return of investments. No point not been able to sleep at night because you are worried about your BitCoin crashing.

    4) Minimize your spend in depreciating assets if you are trying to grow your capital
    Buying most cars is a bad financial decision, as they loose capital value, so ask yourself what's more important

    5) Protect your assets
    If you have houses/car/salary income don't risk loosing them if disaster happens - make sure you have proper insurance

    6) Favour long term versus short term
    Timing investments is tricky, so take a longer term to growing capital

    7) Don't invest in something you don't understand
    My dad taught me this one … has stopped me chasing the latest "investment fad" several times

    8) Always have a "Plan B"
    .. and be ready to execute it

    9) Challenge your spending
    Only buy what you need, and buy it at the best price … no need to reiterate this one for OzBarginer's

    10) Money is a means to an end …
    .. So make sure you are clear on your (non-money) goals

  • +15 votes

    Wait for the generation above me to die.

    • +1 vote

      They just won't sell us their mansions in Mosman soon enough….

  • +4 votes

    If I don't win the lottery, I'm screwed.

  • +4 votes

    The house thing is a bit overrated imho.
    Investors have driven up the prices and now the norm is to spend the next 30 years of your life paying it off.
    Don't get me wrong, this is what the banks, government and Rupert Murdoch want the economy to do as it means more money for them and you can't retire early meaning more tax for the gov.

    Ideally i'll live with my parents until i can afford a 40% deposit on a $400k house/villa, because i don't intend on spending the rest of my life paying off my forever home
    then move up as i get more equity. On average you end up spending 25-30% of your loan value on interest so am looking at minimising that where possible.

    And finally i'm lucky enough to have some disposable income to be playing around in small caps which has been very profitable recently, anything to do with lithium/batteries/rare earth metals has been going gangbusters.

    Or the more morbid view is to see if covid really takes hold and take some pressure off the economy…
    Oh and land tax, bring that shiz in.

    • +1 vote

      Why do you want land tax?

      • +1 vote

        Will incentivise empty nesters to downsize thus leaving bigger properties to those that need the space (families). Otherwise they're welcome to pay higher rates to maintain a bigger property.

    • +1 vote

      Only problem with your strategy is that house prices are rising much faster than mortgage rates. So the longer you wait, there buyer is going to cost.

    • +1 vote

      Better off buying on 20% deposit and renting a room out than waiting for 40% deposit.

    •  

      Ideally i'll live with my parents until i can afford a 40% deposit on a $400k house/villa

      Sounds like you are going to buy a house/villa 2 or 3 hours from a capital city?

      The house thing is a bit overrated imho.

      Yet you are still going to buy one.

      •  

        In perth thats within 15 minutes of the city ;)

        • +1 vote

          In perth thats within 15 minutes of the city ;)

          Dang, about a 30+ hour drive from a real city ;)

          •  

            @serpserpserp: Thankfully that's the attitude that keeps our prices low.
            Lucky for us that means less of a burden to shoulder for the rest of our lives.
            Win win

            •  

              @Drakesy: This. I own one property 10 Mins from Perth CBD and am about to finish building another bigger one that is under 15 mins from the city. There aren't too many places you can do that any more.

  • +4 votes

    Buy index funds regularly and wait

    •  

      Which ones?

      • +2 votes

        Latest ones I'm buying are vdhg and dhhf
        They basically mirror my super allocation but outside of super. The plan is to access this prior to preservation age to retire early (If I like).

  •  

    Maxing out super + positive gearing shares and property

    • +1 vote
      • positive gearing shares

      Yeah I'd say everyone wants to do that.

  • +2 votes

    Retire at 55 on $80k a year from a combination of super and investments.

    Travel the world as mature aged back packer. Then…

    Might do a CFP to help other people out and make some coffee money.

  •  

    Learn about compound interest.

  • +1 vote

    in my youth i chose to support crown casino, the local gangs who owned the night clubs and the import vehicle parts business

    Supportlocalbusiness!

    •  

      Did that work out for you?

      • -4 votes

        i earn more than the median income, drive a nice car etc so i would say im doing just fine

        r u ok?

  • +1 vote

    Well… some people here laughed whenever they heard the word "Investment Vehicle" but apparently second-hand car market has been booming (30%+ I saw an article the other day?)

    A friend of mine who works for one of the automotive parts told me it's strange but the lockdown has generated interests in cars and second hand market (probably for the first time in Oz history) booms resulting people making profit selling cars.

    •  

      Agree. Getting decent 2nd hand cars ATM is a nightmare. I recently got my son a great 10yo Getz manual for him to learn on. Nice car in great condition with very low kms but I probably paid at least $1k more than if I'd bought it a year ago.

  • +1 vote

    DCA on crypto.

    $20 on BTC, $15 on ETH and $15 on ADA a week.

  •  

    22yo - never gonna buy. Gonna rent all my life. Imma die anyway why try to hold on something permanent. Not unless I win a lottery or my family's business suddenly thrives and they decide to get me a place of something. Save up, invest a bit in stocks.

    Spend money on experiences not material stuff sans on essentials. Ye pretty much it, live life within my means, never gonna retire because I love helping people so am a bit of a workaholic

    • +1 vote

      Sounds good to me.

    • +3 votes

      Nothing wrong with that but you may find by the end of your 20's your perception may change so don't dedicate yourself into an irreversible trap at 22. Good to see you're thinking for yourself.

  •  

    spend less than you earn -

    'Annual income twenty pounds, annual expenditure nineteen nineteen and six, result happiness.
    Annual income twenty pounds, annual expenditure twenty pounds ought and six, result misery' -
    https://en.wikipedia.org/wiki/Wilkins_Micawber

    which is a challenge in low paid starter jobs until you get a promotion (see education/self-improvement/motivation/work hard)

    then invest savings in growth investments - usually not cars and consumer goods

    buy the cheapest car your ego can afford - if you need a shiny new car to feel good about yourself - that may cost you $5000pa or $100pw for that ego massage - is that easy spare cash you don't need

    my car is worth about $200 - but is totally reliable - and costs me $1000pa - mostly rego and insurance - YMMV

    Vanguard - sure - VHS or VGS whatever -

    but learn to be content and enjoy free pleasures like a gentle breeze on a balmy day - enjoy the taste of slow simple foods - don't wolf down everything and end up having a heart attack

    they say about deathbed regrets, no-one ever regretted not spending more time at the office - it's always about relationships with loved ones

    •  

      my car is worth about $200 - but is totally reliable

      Yeah look, till you get into an accident and the old sh!tty car's safety rating is so crappy that you get injured. I'm all for cheap cars, but there comes a time where it's worth the money to pay a bit for the latest safety features that could save your a$$ and $$. No amount of money is buying your health back.

      •  

        'till you get into an accident and the old sh!tty car's safety rating is so crappy that you get injured'

        sure - IF you get into an accident …

        my first accident was on P plates when I was 18yo - going too fast on a dirt road, lost control, it went up the ridge and flipped - I and my friend were left hanging upside down by our seatbelts but otherwise unharmed

        since then I've been driving for nearly 50 years and never had a collision involving injury - only fender nudges and parking scrapes

        I remember one friend who drove a Volvo because they knew they were an inattentive idiot - he would turn and stare at me in the passenger seat while he was driving, and I'd have to shout to him 'please watch the road!'

        another friend had a fancy BMW - I sat in the back one day on the highway - as she spoke she jerked the steering wheel back and forth making me feel quite seasick in the back

        so yeah - if you're a bad driver (I know 80% of drivers think themselves better than average) - then certainly get yourself lotsa airbags as you're probably gonna need them anytime

        the same sort of folks who tailgate then crash into and blame the driver in front for stopping too soon …

        • +1 vote

          Accidents can happen at any time for any reason.

          Last year, my dad was stopped at a red light and a drunk guy ran into the back of his car and it was a total write off. Wasn't my dad's fault at all, obviously, but the airbags saved him from some serious whiplash. He's a starting to get on a bit in age, so an injury like that at his age would have meant neck pain and discomfort for the rest of his life. To me, that decrease in quality of life isn't worth saving a few grand.

          You've been lucky, but someone who has been driving for 50 years should know better than to assume that the only person you have to watch out for on the road is yourself. I've never been in a serious crash myself after around 15 years of driving, but I know that it could happen tomorrow. It's the same reason you buy insurance: Sure, your house has never burned down before and probably won't in the future, but you don't want to take the risk and end up being the poor bastard sitting in an uninsured pile of ash one day.

          I hope you never get into a serious crash, but your outlook on road safety is naive to the point of negligence.

        •  

          C'mon mate how ignorant or up yourself do you have to be to assume your driving skills alone will avoid an accident. Accidents can come out of no where and find YOU, no matter what you're doing. Having an accident doesn't imply you're at fault, someone could run into you on the highway and flip you for no other reason than they were on their phone. If you think you have 100% control over everything on the road at all times, you need a wake up call.

  •  

    Work 4 days a week, stay at home and save and invest in stock market and get 8% return and try to invest a little in the next after pay/tesla/bitcoin.

  •  

    The amount of money printing around the world is insane. Keep minimal cash. Invest in something that at least beats the inflation.

    •  

      I don't believe in Crypto currencies. Australian stock market's growth has been a flat line for last many years. American stock market is all time high and the PE rations don't make any sense. So, where do you suggest I invest in? I already have an IP.

      •  

        Auckland New Zealand property their prices are skyrocketting

      • +3 votes

        In what universe has the "Australian stock market's growth has been a flat line for last many years"

        Did you miss all of 2020?

        •  

          It went down in march and back to the old state now. I am "invest regularly and forget" type of guy. No "timing the market" for me.

          • +1 vote

            @amazonaddict: So set and forget vs trading.

      •  

        Depends on your risk tolerance really and holding period. Fixed income, managed funds, ETFs… plenty of options and risk levels.

      •  

        Make sure you include dividends in Australian stock market growth. Even a 'flat' market is profitable

  •  

    My plan is simple: spend less than my earning & buy Saturday lotto weekly (who knows lol).

    •  

      (who knows lol)

      What I do know is that you're throwing away up to $500 a year on a 1 in a billion chance.

      •  

        True. But it is something that I can afford with my current financial situation. I put it in my feel good spending bucket along with my online game spending.