New to Investing - Suggestion?

Ldefqon2 on 21/02/2021 - 11:46

Hi all,

Sorry if this sounds super general, but how should I channel my saving towards investment? I'm super new to all of these and the more I read and dig into the forum, the more confused I get haha…so, bit of my background :

  • 30yo
  • FT worker 55k/year (before tax) in education although possibly will increase to 70k in few months due to upcoming career progression
  • Absolutely zero debt, zero credit card/HECS/loan outside of mortgage (27% of fortnightly pay) & bills
  • 45k in super (all consolidated)
  • Can say I'm really good with money and usually save 35-45% of fortnightly income

Saving is currently a few grand. Where would be the best place to start? Open to and appreciate all of your suggestions very much. Thanks! :)

Financial

Comments

  • dazweeja on 21/02/2021 - 12:05
    +3

    One way is to invest in ETFs which give you broad exposure to lots of different stocks without being too reliant on any one stock.

    For example: https://www.raskmedia.com.au/2020/12/17/the-top-5-asx-etfs-f…

    You also have to think about the timeframe of your investments. If it's less than 5 years, shares can be pretty risky because you can have "down" years and you don't want to have to pull your money out during those.

  • tabz on 21/02/2021 - 12:07
    +2

    Take this with a grain of salt, but it really depends on your risk profile and how soon you'd need access to the funds.

    Say for example, you need access to the available funds within the next 5-7 years, you might be better off putting it into an 100% offset account against your mortgage.

    If you're happy to leave it a bit longer, then maybe look at shares/funds. Index funds are a good start to get one's feet wet (e.g. Vanguard's VAS and VDHG are some examples).

  • dylanando on 21/02/2021 - 12:15
    -4

    Crypto!

    • [Deactivated] on 22/02/2021 - 00:48
      +4

      Bitcoin will hit $1MM and comments like this will still get downvoted. Welcome to OzBargain.

  • SydStrand on 21/02/2021 - 12:52
    +3

    Depends on your risk tolerance. If you like to live dangerously, YOLO and put it all on meme stocks or C-tier crypto. If you prefer safe but solid, then regular contributions to an index fund.

    • silo on 22/02/2021 - 08:13
      +1

      Asxbets autist?

      • pyramid on 22/02/2021 - 09:30

        DW8, RNT, Z1p and you are set for life…
        This is not financial advise.

  • TheButLover on 21/02/2021 - 13:01

    I like property at a young age to utilise time and leverage. Listen to the property couch podcast, they're extremely knowledgeable and put it into simple terms

  • defqon2 on 21/02/2021 - 13:18
    +1

    Thanks for the thoughts everyone!

    • I don't think I'd need to access the fund for couple of years
    • Recently switched to fixed rate home loan account (saved very decent chunk of repayment) however offset is no longer available…sigh
    • You see, I was looking into crypto/bitcoin/similar stuff but TBH I don't wanna lose sleep over the chance of losing money! Old fashioned I am. I quite prefer long term gain, secure kind of investment, basically I just want to "store" my saving somewhere and let it grow, albeit slowly
    • Property is definite, my initial thought right now is just to save for another few years, buy an investment property with partner, & just rent it out indefinitely
    • Ughhh on 21/02/2021 - 16:21

      If your car suddenly broke down and need to buy a new one, or house need major repairs, or medical emergency, will you have to sell your shares immediately?

    • kekw on 03/03/2021 - 11:16

      "Long term" is the keyword. Has btc been going down over the pass few years? no.

      just cause crypto is more volatile doesn't mean you will lose money.

      Zoom out on the chart and stop freaking out over dips.

      why would someone think hodling stock for 5-10 years is normal but have to sell their crypto the moment it dips and call it a scam? lmao

      edit: sorry op, not pointing to you. just people in general.

      • defqon2 on 04/03/2021 - 09:38

        Haha no offense taken!
        I did buy a bunch of Cardano. Updates, forums, and general public support seem very positive about its future. Let's see.
        You think you can suggest any currently undervalued Crypto to hoard?

        • kekw on 04/03/2021 - 10:35

          really depends on the your risk & reward factor.

          Cardano is a good pick!

          I can only list a few, you can do some research yourself.

          short-term: LTC (paypal announcement somewhere Q1), SXP, 1INCH, any swap coin.

          long term: generally any high cap is good for long term investment. BTC, ETH, ADA

          any low cap, low volume coins has to potential to become pump and dump coin. Buy a small sum put an order to take profit and wait for miracle.

          OR you can join any pump and dump group on the internet for real time action, but tbh usually you don't win.

          ps, i don't recommend pump & dump just saying is an option.

  • arkie0 on 21/02/2021 - 13:56

    Kind of obvious to someone in education but read as up on as many resources as possible, understand the why before the how.
    Just google, what to read to start investing and go, no knowledge is bad knowledge.

    Make sure you understand the cons of each, property sounds great until you have to deal with tenants and unexpected maintainance. 10%-4000% growth sounds awesome, until you run across a crash or a company goes into sudden administration.

  • SBOB on 21/02/2021 - 14:23

    Vdhg with regular buys is a relatively easy, minimal thought option, assuming you're looking at an investment where you are talking medium to long term and not going to want to necessarily access the money in a year or so

    • Bisah1342 on 21/02/2021 - 15:13

      buy and forget, you reckon?

      • SBOB on 21/02/2021 - 17:47
        +1

        Yep.
        I use vdhg as my set and forget savings account for my kids.
        Every month $ goes in, will see what it's like in 10-15 years time

        • Bisah1342 on 21/02/2021 - 17:48

          awesome! i might do this too. Is an ETF sort of like super where they get money and invest it in for you? sounds perfect for me hahah

          • SBOB on 21/02/2021 - 18:17
            +2

            @Bisah1342: Not really..it's an index fund that tracks whatever market it's aimed at
            Vdhg is a high gain diversified etf that covers several sectors.

            You could diy an ETF mix for marginal less fees and more flexibility, but for someone that wants an easy, off the shelf, diversified option, vdhg is a good starting point for recommendation

            • gr0sey on 21/02/2021 - 19:02
              +2

              @SBOB: Minor correction. Exchange traded funds and index funds are different things. VDHG, which is an ETF, (by a broad stretch of it's definition) works similarly to how your money is invested in super. In fact a lot of superannuation funds offer investment through ETFs like VDHG.

        • kiitos on 22/02/2021 - 11:58

          How old are your kids, and are the investments in their names or your name?

          • SBOB on 22/02/2021 - 12:05

            @kiitos: Young and my name.
            Tax liabilities are mine

  • holdenmg on 21/02/2021 - 14:24

    I remember when Eneloops were the thing…

  • Seraphin7 on 21/02/2021 - 14:50

    The most obvious is to simply pay down the mortgage. That's fine and there's no problem simply doing that.

    Beyond that, you likely want to be looking at an Australian and international indexed equity fund of some description. Many, many out there that no doubt many here will have an opinion on so I won't get into any specific recommendations. Start small and accumulate gradually and regularly (maybe $100 a week or whatever your budget allows for).

    Speak to your accountant to fund via debt recycling and establish an interest deduction for the purchases via your mortgage. It won't count for much in the early years on small values, but over time it could easily accrue so a few thousand a year in deductions.

  • tajid on 21/02/2021 - 14:50

    Spaceship Voyager

    https://www.ozbargain.com.au/node/601510

    • defqon2 on 21/02/2021 - 16:00

      Haha I did sign up for that! Already put a tiny bit, just wanting to dip my toe in the water and see how that goes.

  • Hybroid on 21/02/2021 - 14:57
    -4

    Do you have any qualifications or skills you can pivot to a new career role? That's an extremely low salary for your age that would limit investment potential.

    • defqon2 on 21/02/2021 - 15:58

      Currently undertaking training cert and hope to become a trainer by around July, which will bump income up to 70k ish/annum.
      I get that 55k/annum is pretty low for my age…I'm not Aus born, moved here in 2008 and spent at least 6 years working towards residency by employee sponsorship and getting paid peanut. Recently switched career to be in education so gotta say I started again from scratch.

      • Hybroid on 21/02/2021 - 16:11
        +1

        Have you considered adapting your skills to other professions? Become an auditor, external course trainer, risk management etc etc? Don't know your background or experience but there's plenty other professions you can look at.

        Even 70k is still extremely low. Document controllers with few years experience earn 100k. Not putting you down, genuinely trying to get you to consider bigger picture outside current bubble.

        • defqon2 on 21/02/2021 - 16:22
          +1

          Background is chef, looking to become hospitality trainer for RTOs

  • whooah1979 on 21/02/2021 - 15:00
    +1

    Absolutely zero debt, zero credit card/HECS/loan outside of mortgage (27% of fortnightly pay) & bills
    45k in super (all consolidated)

    OP, you already have two medium risk assets. Keep the rest of your income in fiat and don't worry about chasing gains.

  • Candour on 22/02/2021 - 08:27

    initially pay of the morgage in full. risk and worldwide recession will be here a while. then, read investment sites in the us as oz sites are stingy with info and sell side based or biased to their own interests. then read trading sites to ind out what you could read in markets, i true. then put it in super to the limits the government allows. then seek a good industry fund which will let you actively manage your funds. I use host+ but aust super and sunsuper are wrthy. understand your real risk profile in case of total loss. and varying losses. the 60/40 one may lave lost its efectiveness. consider active investments dynamically managed, not timing, with good international asset allocation. aim for conservative always. the recession - global - has not fully paid out and markets are running on speculation and overvaluation.

  • mqi on 22/02/2021 - 09:23
    +1

    Channel just 1-2% of savings to Bitcoin.
    Growing up, my dad used to spend 1% of his income buying lottery tickets.
    This kinda the same thing but with better odds in my opinion.

  • jv on 22/02/2021 - 09:40

    Chicken nappies will be the boom product of 2021.

    Invest in those…

    • melgirl on 22/02/2021 - 11:12

      whats that???

      • jv on 22/02/2021 - 11:13

        All the people who got chickens during lockdown will start buying chicken nappies…
        Expect huge price increases as demand exceeds supply, until enough mask makers pivot to produce chicken nappies…

  • Peck on 22/02/2021 - 10:28

    Additional Superannuation Contributions. Via Salary Sacrifice if possible.
    And pay off the mortgage faster.

    • Ultimate Gattai on 22/02/2021 - 13:49

      This, although he could make an after tax contribution instead of Salary Sacrifice, in the end, After Tax Contribution vs Salary Sacrifice gives the same result, the only difference is when he get the tax money back (immediate VS after financial year).

  • nahkk on 22/02/2021 - 11:13

    Before you start to invest, make sure you have an emergency fund. Cannot emphasize how important it is. Especially since you own a property.

  • Ultimate Gattai on 22/02/2021 - 13:57

    Index funds are the way to go, I own several funds which is fine because I'm willing to balance them myself every 6 to 12 months as I add more money in, I'd also dump extra money into Super as an After Tax Contribution (Salary Sacrifice is fine too), I do have a few individual stock picks which is a very small part of my portfolio (Tesla and AMD went nuts, but I don't expect Tesla to hold that value as it's over priced atm).

    I'd pay off the mortgage first as it'll probably suck up more money than you can earn via Super or Stock portfolio, I'd also change my Super investment options to high growth or divide it between Indexed Funds if your Super offers that option so that your money grows more than the measly amount a balanced option offers (you're more than 30 years from retirement, some volatility will be good for you). The thing with stocks is that it's a long play, having been invest for more than a few years, I've seen a some ups and downs, at first I used to get angry when it went down, now I just don't worry because it always comes back up (may not be the case with individual stock picks). Some people have mentioned property which gives the same returns as stocks as r/ausfinance discovered, but they both have they're advantages and disadvantages (I like stocks because it's cheaper and easier to get into than property, I feel like more could potentially go wrong with property than stocks, plus lower barrier to entry).

  • Moneyinthebank on 22/02/2021 - 19:52

    If you let me borrow I will make a good investment

  • OzHunterNSW on 23/02/2021 - 12:10

    Put it all in Super

  • screensaver on 25/02/2021 - 03:46

    I joined Australian Unity Diversified property Fund and am very pleased with my latest statement unless its a typo lol

  • ascorbic on 25/02/2021 - 16:17
    +1

    I've only got a few years of experience meddling in the stock market but what I've learnt is that it's easy to get false confidence. When the market overall is going up, it feels easy. But when the market goes down, that's when you see if you really have a clue what you're doing.

    I had ~100 shares in commercial real estate when I first started and bought ~200 more after a couple years because it was steadily increasing. Now with COVID, you can guess how well it's doing.

    Other companies like the banks have largely recovered from COVID but I'm still at a paper loss with the bank I own stock in because I bought prior to the banking royal commission.

    More recently, I've decided that investing in an ETF is safer.

  • tmat5 on 25/02/2021 - 21:46

    Read Barefoot investor (for safe strategy - mainly ETF)

    Open low cost brokerage account that allow you to invest worldwide share (US is the largest and China is probably the second largest too). (Broker: IBKR is one that I am using.)

  • Candour on 01/03/2021 - 11:10

    join an industry super fund and put money into their low-cost risk return investments.
    eg hostplus lets you choose managed funds at cheap rates.
    or you can use their etfs.
    learn about the economic and business cycles, investment and trading
    look at the returns of asset classes each year.
    they do not repeat themselves.
    what goes up comes down.
    education is necessary.
    Unlike real estate sold by a real estate agent, who says that property will always go up if you do not believe in gravity…
    there is no free lunch in all markets including real estate.
    there is a global recession going on which may take years to resolve.
    learn investing and trading.
    be conservative.
    Always go into conservative options until you understand your risks

  • defqon2 on 04/03/2021 - 09:51

    Hi all!

    I ended up setting account on Vanguard FDHG and Spaceship Voyager, dumped some fund there, and set up fornightly direct debit.
    Got some crypto to play with after doing some research. Not holding my breath for this one so see how it goes!
    Also readjust my current and future super to favour companies with slightly higher risk but potential better return. Worth playing around when I'm young and don't have a lot there.
    Will probably look at S&P500 later in time when I gain more traction & knowledge, but one step at a time. I think that's enough toe dipping before I get further down the rabbit hole…

    Jeez I learnt a lot from this forum. Thanks again, everyone.

  • whooah1979 on 05/03/2021 - 07:34

    The SPX is having a Friday 🔥 sale. Time to put on your red dancing 👠 and go shopping.

    Live bargains https://youtu.be/IBXwP_-7V4A

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