Australian Portfolio Review

Lkonivalvoda on 09/12/2023 - 11:44

Howdy, I have a portfolio up for review. Any insight would be greatly appreciated!

I'm age 25, M, single with no dependents.

Portfolio:

  • Stock Market: $455,000

  • Superannuation: $100,000

  • Emergency fund: $40,000

  • Property (paid off): $650,000

  • Debt: $0

Approximate size of total portfolio: $1.25m

Current Asset allocation (it's the same inside and outside of superannuation)

  • VGS: 70%
  • VAS: 20%
  • VGE: 10%

This works out to be 100% Stocks (80% International / 20% Australian.) Besides my emergency fund I do not hold bonds directly.

Financial

Comments

  • brendanm on 09/12/2023 - 11:55
    +146

    Congrats? If you've got $1.25m in assets and don't owe a cent at 25 years old, not sure if anyone here will be of any help to you.

      • margiela on 10/12/2023 - 10:15
        +17

        I'd really like to know on what basis you are suggesting that shares (especially the 3 ETFs OP has listed) are (a) high risk, and (b) don't perform, and (c) nor pay an income, nearly as well as an IP in the long run.

        Napkin calculations on his stock portfolio suggests 4% dividends of $18k this year, plus 4% capital growth of another $18k.

        Where do you suggest I / OP look for a property that returns net profits of ~$30k a year, without leveraging ourselves to our eyeballs?

        • brendanm on 10/12/2023 - 13:45
          +25

          I suggest you read some of that posters other comments, he is simply LARPing, and is not a successful investor, he just likes to reply to the first comment in a thread, so people can see his comment.

          • Muzeeb on 11/12/2023 - 11:32
            +5

            @brendanm: And every time I challenge them on why they do this they deflect and nit pick my posts. FFS.

            • Chandler on 12/12/2023 - 10:38
              +4

              @HeWhoKnows:

              I retired at 48 and living off my investment properties as muzeeb knows.

              Ah, so you're looking for someone to hold your bag for when you try to exit the market before it crashes?

              And you? probably bragging about having $500 in your savings account…right?

              Good on you for trash-talking someone who (potentially) didn't/couldn't play the market at the right time like you did?

            • brendanm on 12/12/2023 - 11:10
              +2

              @HeWhoKnows: You are a LARPer.

              I don't have any savings, I just have a heap of loans for high yield investment amgs. I'm about $200k in the hole at the moment, but I'm sure it'll turn around any time now.

              • Chandler on 12/12/2023 - 23:18
                +2

                @brendanm:

                You are a LARPer.

                Possibly dating myself, but is FIGJAM still a thing? :P

        • HeWhoKnows on 12/12/2023 - 09:19
          -3

          Because they are risky as history has shown time and time again.
          In the end they take you nowhere.

          I tried this and lost every time.

          My share investments have taken me nowhere except for just one of them.

          You learn by your mistakes.

          Argue what you like.

          I know what made me money and for many many many others

          Listen to those that have been successful and ignore the rest.

          Thats the best rule in life

          • frewer on 13/12/2023 - 06:58
            +1

            @HeWhoKnows: There are a saying in the share market "95% market participant lost money" "dumb money moves the market". The share market isn't for the emotional nor the plans-less one.

          • HeWhoKnows on 14/12/2023 - 22:25
            -1

            @HeWhoKnows: What fools would negative vote such wisdom?

            Seriously some people here hate good advice.

            And by my own advice if I know who you were I would simply ignore you

        • hj0809 on 12/12/2023 - 13:28

          It’s called using leverage with a home loan.

      • Hangryuman on 10/12/2023 - 16:48

        yair I bought investment properties and now retired my biggest problem is selling any of them would trigger huge capital gains tax - I last paid about 1/4 of the entire price growth (sale price minus purchase price) over 30 years - that felt pain …

        CGT with smaller bundles of shares can be managed and timed to balance sales of shares with capital losses (hopefully not too many) against capital gains.

        but yeah - as others said - if you have $1.25M including a paid-off home at age 25, that's kinda like humble bragging - you could probably retire now and live frugally for the rest of your life

        but hey that might be boring as most folks get most of their social interaction by having a job that requires talking to colleagues or customers or the public, so keep on doing what you're doing.

        while investment real estate was the easy way to make money since the 1970s, since COVID lockdowns a lot of that has changed to not so great.

        My super is in a pretty happy place - so maximizing your concessional contributions is like free money at your marginal tax rate (most on 33%) and non-concessional at $110Kpa or $330k max over 3 years. That tends to be set and forget with no tax consequences for your personal income tax last I looked - I just recently changed my previous high growth choice to international shares after I saw that over the last decade or so, international shares have consistently outperformed high growth at like 11%pa compared to like 8%pa - but as a young guy you can't access that until you're like 60yo ? - so sorry baby - I'm old and enjoying !

        • Hangryuman on 10/12/2023 - 16:56
          -1

          on second thought, your paid-off home you valued at $650K would not normally be considered part of your investable funds.

          when I went to a big investment company they were uninterested in my real estate holdings - they were only interested in my liquid assets like cash and shares that they could manage to take commission from.

          A figure I heard was $5M in 'investable assets' - meaning if they can get 1% commission for managing your $5M, that's $50Kpa for easy work for them.

          So yeah - probably consider your investment portfolio to be more like $450K

          using the 3% retirement rule (usually for like 30 years of retirement), you could draw 3%pa of $450K or $13.5Kpa now - but that doesn't sound like a lotta fun, so keep working, spend less than you earn, save up, and invest in more

          quick warning - ETF cost base needs to be tracked annually - someone suggested free sharesight (or pay as needed)

        • HeWhoKnows on 12/12/2023 - 09:23
          -1

          You pay capital gains tax on any investment that makes a profit.
          Not just property.

          What a pity to pay $50,000 in CGT when you made $200,000 profit on property.

          You dont with shares because most of the time you lose money on shares LOL

          I know which way id rather go.

          But shrewd investor will tell you.
          Dont sell property.
          Just acuumulate more

        • HeWhoKnows on 14/12/2023 - 22:27
          +1

          Golden rule

          Better to tax on excellent capital gains rather than lose money and pay no tax.

          LOL LOL LOL LOL

      • HeWhoKnows on 12/12/2023 - 09:16
        -5

        The negative votes here show how absolutely FOOLISH most people are here….Seriously!
        You get advice from someone that have been very successful and you cast 45 negative votes?

        You know what?
        I don't care because I retired at 48 and living very comfortably.
        No worries about not affording anything or about this burst of inflation.
        The rest of you can cast negative votes for the rest of your lives and get absolutely nowhere.
        Im the one laughing. LOL.

        • Frank Murphy on 12/12/2023 - 16:30
          +6

          There's a world of difference between a very successful person, and an anonymous random person on a forum telling everyone how "very successful" they are. My experience has always been The bigger the mouth, the smaller the truth. I know people who are very successful from investing exclusively in the share market. Just because you failed, that means no one should touch it? That's a ridiculous conclusion. While your success is anyone's guess, there's no denying how you sound. That would be my guess as the reason for the multiple negs.

          • HeWhoKnows on 14/12/2023 - 22:32
            -1

            @Frank Murphy: Im sure I have much more than 99% of people here.
            In fact Ive just purchased not 1 but 2 more properties just recently that are earning me another $1550pw.
            All paid with cash made from my property portfolio.
            And yes I retired at 48 and have bought several more properties since.
            I dont think thats random at all.
            Hence I laugh when people neg vote such good advice.
            Such fools be they
            They will never have any money with such an attitude.
            And the fact is that the richest people in the world have property behind them.

            As I say. I don't really care about the fools that neg vote good advice.
            They will never learn

            PS> Frank. Where do you fit in this?
            Are you a random or a jealous neg voter or just another person making foolish comments?
            And your experience sounds very tunnel visioned.
            Best you open your eyes and start listening to those that know.
            The fact is (as frewer said above) that 95% of people lose money in the share market
            Its more like 95% of people make gains in the property market
            So best you put your comments into context my friend.

        • Eeples on 12/12/2023 - 19:01
          +1

          Hey, did you retire at 48?

          • HeWhoKnows on 14/12/2023 - 22:34

            @Eeples: Buying property, property and more property.

            Property delivers you an income.
            Each property delivers another income.
            Becomes self propelling.

    • siresteelhell on 10/12/2023 - 13:09
      +14

      trolls be trolling

    • dlakers3peat on 10/12/2023 - 15:00
      +3

      I agree, you should be helping us.

  • spackbace on 09/12/2023 - 11:57
    +35

    And all it took was a small loan from your parents :P

  • Fredfloresjr on 09/12/2023 - 12:00
    +123

    Created an account 45 minutes ago to ask tips for his 1.25M.

    • siresteelhell on 10/12/2023 - 13:07
      +26

      bit of a (possibly fake) "look at me"…..

      • RTX9090Ti on 11/12/2023 - 06:55
        +7

        aka Frodo Braggin…

  • AustriaBargain on 09/12/2023 - 12:01
    +32

    After careful review of your Australian portfolio, I must urge you to marry me.

  • Muzeeb on 09/12/2023 - 12:07
    +125

    I think you meant to post on ozbraggin.com.au

    $100k super at 25. Assuming you've been full time for the last 4 years means you're on about $200k pa. Time to move over to whirlpool. Your brief time here is already done.

    You don't own a car?

    • DashCam AKA Rolts on 09/12/2023 - 12:49
      +9

      You don't own a car?

      Leasing a high yield MB.

      • Muzeeb on 09/12/2023 - 13:02
        +2

        Debt: $0

        Not even that. 😉

    • konivalvoda on 09/12/2023 - 13:12

      I own a cheap ute

      • Muzeeb on 09/12/2023 - 13:14
        +36

        Still an asset.

        I think we've found the plumber that only works on Sundays and charges $420 for 20 minutes work.

        • konivalvoda on 09/12/2023 - 13:20
          -1

          Close but I work as a FIFO mechanical fitter. The work is dirty.

          • JIMB0 on 10/12/2023 - 13:19
            +4

            @konivalvoda: Can you explain what copper coat is used for?

          • Hangryuman on 10/12/2023 - 17:07
            -5

            @konivalvoda: FIFO !? WTF ? STFU and GTFO ! Good monay !?
            Guess $200K+ for someone with otherwise $100K skills so chance to save $100Kpa - as long as you don't get trapped on the hedonist treadmill - increasing your spending to match your income - luxury holidays, expensive shiny toys, travel, hotels - then feeling you can't afford to stop when the work gets unsatisfying

            but sounds like you are not doing that - so well done - save as much as poss for now - so you can set yourself up for easy street in the FIRE squad !

    • raginggiant on 11/12/2023 - 10:37
      +1

      $100k in super is totally doable if you are maxing out the concessional contributions. The better question is how they can max out concessional contributions because they'd need to be either making a high income with low costs (possibly god tier bargainer without any romantic inclinations) or making a modest income with zero costs (aka they still live at home, don't pay for anything).

  • Hellfire on 09/12/2023 - 12:10
    +3

    With your age and balance i would go much more speculative.

    • djones145 on 09/12/2023 - 13:15
      +17

      damn straight
      i would take all that money out and head to the casino

      Put it all on 41. I've got a feeling about that number.

      • brawndo on 11/12/2023 - 09:18

        The only way to win at roulette

  • Guybrush57 on 09/12/2023 - 12:10
    +5

    Nice flex

  • iforgotmysocks on 09/12/2023 - 12:42
    +1

    Invest in magic beans

  • cuteduck on 09/12/2023 - 12:58
    +3

    Show off!!

  • djones145 on 09/12/2023 - 13:18
    +42

    lol

    peasants
    when i was 25 on ozbargain i had 5 houses paid off,(each worth 2 million)

    2m in shares
    5 merc amg (high yield)
    and a portiflio of 1m eneloops

    come back when u match that br0

  • Dollar General on 09/12/2023 - 13:57
    +24

    Considering you inherited $2M, you’ve done somewhat ok

    • Hangryuman on 10/12/2023 - 17:09
      +5

      LOL - the old farmer's joke:

      'How do you make $1M as a farmer?' - 'Start with $10M …'

      • frewer on 10/12/2023 - 20:06

        The new crypto bruh jk

        'How do you make $1M as a farmer?' - 'Start with $10M buy NFT…'

  • prisonmike on 09/12/2023 - 14:38
    +8

    You forgot to mention about your high yield investment vehicles.

    • konivalvoda on 09/12/2023 - 16:32

      What do you mean by this?

      • prisonmike on 09/12/2023 - 16:50
        +23

        You are too young little one

        • konivalvoda on 09/12/2023 - 17:40

          I was always taught to invest into broad market index funds with good capital growth. High yielding investment vehicles like VHY and individual stocks (CBA, BHP etc) pay out a large % of growth in dividends which means my taxable income is increased. If I delay CGT until drawdown I'll be in a better position.

        • Poor Ass on 11/12/2023 - 17:43
          +1

          maybe he's got a Merc X class as he mentions an ute

      • R-Man on 11/12/2023 - 17:51

        here's the original comment - click show to reveal https://www.ozbargain.com.au/node/273269#comment-4128667

      • Eeples on 12/12/2023 - 19:05
        +2

        When he says vehicle he means a vehicle (ie. a car).

  • mskeggs on 09/12/2023 - 14:49
    +17

    Probably time to invest in training/qualifications so you are able to maximise your future earning potential.
    I’d also be looking to achieve some other markers of success, like cultural sophistication etc. It’s no fun to be sitting at the successful people’s table and they don’t care about jobs and work, but the new play or art exhibit, and you not only have nothing to add, but you don’t understand what they are talking about.

    • ihbh on 09/12/2023 - 15:19
      +5

      Savage!

    • Chandler on 12/12/2023 - 10:59

      This doesn't have the number of upvotes it deserves…

    • Eeples on 12/12/2023 - 19:09
      +2

      OS travel too would be beneficial. Visiting all the museums are art galleries, perhaps the odd historical site.

  • ihbh on 09/12/2023 - 15:25
    +2

    You don't really need to hold any bonds, unless you need regular income in retirement (e.g. Peter Lynch - but that might be to enable his regular philanthropic contributions).

    Just as an aside, aim to take a few years career break in the next 5-7 years. And do something completely different for a few years:

    1. It will be a real eye opener.

    2. It will help you on your journey of early retirement - you'll experience what it's like without a job income and learn to adapt and manage your finances. If necessary, you can always jump back into the workforce.

    • Muzeeb on 09/12/2023 - 15:27
      +12

      Alternatively, get an ex wife and child and slash his wealth by 70%.

    • ihbh on 09/12/2023 - 15:36
      +1

      1.
      2.
      3. The free time to mix with others, read, listen to lectures, watch documentaries, etc. will help you develop your cultural sophistication, if you, like moi, came from a working class background, so that you can readily engage at mskegg's table :)

    • konivalvoda on 09/12/2023 - 16:35

      The plan was to not hold bonds directly (beside an emergency fund) until around the age of 40-45. I'll glide path bonds and fixed interest in from there up until retirement. I'll be either 70/30 or 60/40 stocks/bonds by 55.

    • mrvaluepack on 10/12/2023 - 15:07
      -2

      Wrong. Now is a good time to add bonds to ones portfolio because interest rates are high.

      • ihbh on 10/12/2023 - 20:40
        +1

        Absolutely. And you might get some capital gains as interest rates fall.

        However, over the long term bonds return less than equities/real estate.

        Of course you can take a view on interest rates and trade that, but you'd get more leverage with say the shares of property developers such as LLC.

        • BluebirdV on 12/12/2023 - 17:27

          Are bonds better than high interest savings accounts paying around 5%?

          • mskeggs on 12/12/2023 - 19:25
            +2

            @BluebirdV: They are different. If you buy a 5yr bond at 5% for $100, it will pay $5 p.a. (Note, not compounding). After 5 years, you get your $100 back (assuming the bond issuer is solvent).
            But if during that 5yrs the official interest rate were to drop, say, to 2.5%, you could likely sell your bond for $110 - its value increases as rates fall. But in your high interest account, the yearly interest would also fall to 2.5%.

            And conversely, if rates went to 7.5%, your saver would pay $7.50, but you could only sell your bond for $90ish dollars (Though you might choose just to keep it and get your $100 back at the end).

            So the bond market allows investors to bet on the direction of rates.

  • this is us on 09/12/2023 - 15:47

    Please let Ozbargain know if you are on any dating apps. We might consider referrals, although I wonder where you can still find a property for $650,000 in this country.

    • konivalvoda on 09/12/2023 - 16:28
      +8

      I'm in TAS. There's plenty of places around here within the $550-$750k mark.

      • this is us on 09/12/2023 - 16:54

        Thanks for clarifying…

  • sumyungguy on 09/12/2023 - 16:20
    +3

    Your debt to equity ratio appears way too low - or have you chosen not to disclose your loans? Otherwise you appear to be failing to leverage your assets so I strongly recommend you seek advice from a wealth management consultant.

    • konivalvoda on 09/12/2023 - 16:25
      -3

      I prefer to not have any debt, ever. I did not disclose loans because I don't hold any.

      • sumyungguy on 09/12/2023 - 16:43
        +1

        You should consider leveraging your excellent position by borrowing. That's what a financial adviser will say. You'll be comfortably wealthy which will give you so many options as life progresses.

      • ihbh on 09/12/2023 - 21:59

        Very sensible. Can hold volatile assets long term and not be forced to sell due.

  • Drakesy on 09/12/2023 - 16:43
    +9

    Even if you're on $200,000 a year, how have you amassed over $1 million in 6 years given after tax your take home would be around $135k?
    Weird flex but ok

    • H4nd0 on 10/12/2023 - 10:41
      +33

      This post is manufactured to elicit an emotional response. I would suspect the Op is a troll or straight-up supercilious narcissist.

      • ssfps on 11/12/2023 - 02:24
        +1

        No doubt, icing on the cake is there is not even a real question in the OP.

      • Jugganautx on 11/12/2023 - 10:37

        Sounds like my ex

      • whyisave on 11/12/2023 - 20:04

        Market research

    • Korban Dallas on 10/12/2023 - 11:08
      +1

      People die. Inheritance

      • Drakesy on 10/12/2023 - 12:05
        +5

        In which case op is giving small pp flex energy

      • H4nd0 on 10/12/2023 - 13:45

        I, however, want to be reincarnated as a meat popsicle.

    • 900dollaridoos on 10/12/2023 - 13:33
      +8

      I'm in mining and I've never heard of anyone hitting the 200k mark right out of school, certainly not in the past decade. There's something key missing here, eg troll, inheritance, or some big investment wins.

    • KBZ on 10/12/2023 - 20:24
      +1

      It's got to be a bit of inheritance or either he bought so many beaten stocks during the covid dip and rebalanced his portfolio to ETFs after they came back up.

      His reddit comment doesn't line up with how he has 100k in superannuation though. Weird post.

      Re emergency fund

      I have about $25k which is a tad more than 6months of my annual salary (before tax)

    • ihbh on 10/12/2023 - 20:38

      What if a lot of the value of his portfolio is due to capital growth.

    • ThithLord on 11/12/2023 - 09:16

      OP hasn't answered your question since you posted it two days ago. How convenient.

  • Malik Nasser on 09/12/2023 - 16:50
    +5

    You want advice, but no mention of goals, risk appetite, lifestyle requirements, etc…
    You are 25 with no debt and a reasonable net wealth position. Why not use leverage to improve long term wealth creation? Australia's money supply is going to continue to go in the same one-way direction. Just be reasonable with how much debt you take on (debt-to-equity ratio). As long as you can service the debt comfortably (with some wriggle room) then you will grow your wealth at a much faster pace.
    But first figure out what you want out of life, and then plan from there.

    • konivalvoda on 09/12/2023 - 17:09
      -1

      My risk appetite is high with a time horizon of 30yrs. The only goal for now is to slowly fix up my PPOR and sell within the next 10years and build a bigger house. I would consider taking out a mortgage in this case.

      • Malik Nasser on 09/12/2023 - 17:38
        -1

        If you have a high risk tolerance, why not a 1%-5% allocation to crypto?
        Stick with the larger coins and tokens, unless you know what you are doing (willing to take on proportionately higher risk).
        Bitcoin has been around for 15 years, so start there.

        • Dubious speculation on 17/12/2023 - 15:13

          All the butthurt crypto bros who lost money downvoting you xD

          Bitcoin is not going anywhere. Allocate a small percent of your portfolio in BTC and maybe ETH, forget the rest unless you want to do a ton more research. That's a sound diversification. Watch Jason Pizzino for macro cycle anaylsis.

    • ceroau on 11/12/2023 - 11:45

      Noob here. What take away should I have from the fact that money supply in Australia is only going to increase over the long term?

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