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

      • Malik Nasser on 11/12/2023 - 13:48

        In general, increasing the money supply devalues the existing money in the system.
        If money can be created by pressing a few keys on a keyboard, without the associated increase in productivity, then this is devaluing of money (the new money adds to the total pool of money in the system, but the amount of goods or services in the system has not increased by the same proportionate amount).
        As a very basic example, if we had a system which had $5 in it, and also 5 identical items in this same system, then each item will have a price of $1 each.
        Now if we create some more of these items, so now there are 10 identical items in the system, but decide to increase the amount of money in the system to $20, then the price of each item will increase to $2. The items are exactly the same, so their value has not changed, however because of the disproportionate increase of money supply compared to the item supply, we have devalued the money (so the price of money is the same, that is $1 is still $1, but we have changed the value of the money, as we now need $2 to purchase an otherwise identical item which could have previously been purchased for $1, prior to the inflating of the money supply).
        That is just a basic example and does not take into account a whole lot of other variables. In the real world it does not work exactly like this as our system is so much more complex.

        • ceroau on 11/12/2023 - 15:01

          So using the above example, if I only have $1 spare for which I can afford to buy 1 item in this hypothetical system but can afford to service a loan of $5, instead of buying 1 item I am potentially better off getting a loan for $5 to buy 5 items because over time the system will likely introduce more money into the system which means the same items I purchased will be worth more and the additional costs incurred to me by the loan will be outweighed by the new value of those items? The risk however is that the money in the system may not increase or increase enough to outweigh the cost of the loan and/or the introduction of new items may outweigh the amount of new money in the system meaning the value of the currently held items become less valuable, remains the same value or value does not increase enough to outweigh the cost of the loan?

          • Malik Nasser on 11/12/2023 - 17:23

            @ceroau: Now you are adding complexity to this otherwise basic system. By taking out a loan you are introducing new money into the system, so it will behave differently. If you can take out a loan, then so can everyone else. Those who figure it out first will be the ones to benefit the most.

            You also need to distinguish between 'value' and 'price'. They are 2 different things (price is what you pay, value is what you get).

            The majority of money in our current financial system is created by banks. Whenever someone goes to take out a home loan, that money is just created out of thin air. There are rules as to how much money a bank can create based on specific ratios (liquidity and leverage ratios). Also banks need to ensure a borrower can repay the loan, otherwise the bank is on the hook to pay it off (which impacts its profitability).

            For our above example, the system doesn't create the money, it is created at the request of borrowers. And banks will lend to borrowers as long as it will be profitable for them to do so.

            Money creation is through the creation of debt. The below explain this in detail:

            How Commercial Banks Really Create Money (the Money Multiplier is a MYTH).
            https://www.youtube.com/watch?v=cDNSNX48Kmo

            Understanding the Fed's "Money Printer" (QE, the Stock Market, and Inflation)
            https://www.youtube.com/watch?v=K3lP3BhvnSo

  • ihbh on 09/12/2023 - 22:16

    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.

    I needed to wait for more of your comments to get some context before providing feedback.

    Be careful of assuming that a fortunate streak will continue indefinitely in the future - the recent few years growth were an aberration for the Aus real estate market, which was already very high relative to average income prior; also you got good returns from the Covid recovery and also recent US tech strength/recovery?

    Also, be extra careful leveraging more into possibly a late bull market.

  • miwahni on 10/12/2023 - 01:06
    +1

    I'm curious as to why you'd have the same asset allocation both inside and outside of super? Diversification could be your friend here.

  • jrvb42 on 10/12/2023 - 09:54
    -6

    Looks good - keep doing what you've been doing.

    My only advice is to avoid the biggest financial risks:

    1. Don't get married - current laws will see your wealth destroyed in the likely outcome of divorce.
    2. If you can't stop yourself doing (1), then at least get the snip - avoid children at all costs - that's when the family law gets really one-sided.

    Following 1, you'll end up much happier - use mates for companionship.
    Following 2, you'll be helping save the planet.
    It's highly likely if you don't, that you'll end up with no money, no companionship (especially in old age).

    Yes, there are (heaps of) exceptions, but the odds don't favour you.

    • TightAl on 10/12/2023 - 10:47
      +5

      Lmao someone been watching too many redpill videos on youtube.

      • Drakesy on 10/12/2023 - 14:33
        +5

        After seeing how the family court system has treated my manager and colleagues they have a point.

        Nothing like being stripped of 60% of your wealth for no reason other than your partner getting bored. Hell they can even cheat on you and walk off with more than half.

        Sets guys back some 10 years financially, its heavily geared towards women. They can refuse to go back to work, break up with you and because they have zero income you're required to contribute moe.

        • Hangryuman on 10/12/2023 - 17:15
          +2

          I'm not married, don't have kids (that anyone told me about), and am retired with a long-term spouse who stands to inherit all my assets if/when I drop off the twig

          she cares for me, I care for her - we have mutually complementary skills and abilities, and I reckon she keeps me alive - more healthy than I was before I met her, and I reckon I'm likely to live longer than otherwise as a result

          "Marriage may often be a stormy lake, but celibacy is almost always a muddy horsepond.” — Thomas Love Peacock

        • TightAl on 10/12/2023 - 22:17
          +5

          Sorry, that's what happens when you pick a dead beat for a partner.
          Date up not down.

          • Drakesy on 10/12/2023 - 23:46

            @TightAl: Date up and you'll spend your life trying to satisfy them, date down and you'll spend your life forever looking for someone better.

            Choose your poison :)

    • aleminium on 10/12/2023 - 12:59
      +2

      he's not wrong

    • Malik Nasser on 10/12/2023 - 18:52
      +3

      Following 2, you'll be helping save the planet.

      You do realise when they say 'save the planet' it means to ensure it is habitable for human life, and not actually that the planet will die… (p.s. the planet is not going anywhere and doesn't need saving). So if everyone went with your route 2 (not having children), the issue becomes a non-issue, as habitability for human life becomes irrelevant if there are no humans.

    • Eeples on 12/12/2023 - 19:13

      OP, may find a long term partner overseas.

  • TightAl on 10/12/2023 - 10:47
    +3

    ozBS.com.au

  • Korban Dallas on 10/12/2023 - 11:06

    Ozbargain isn't ausfinance

  • zoombie on 10/12/2023 - 11:08
    +9

    I think it should be you giving us financial advice rather than the other way around. A 25 yr old with $1.2m in assets, you're in the top 0.001 of your age group. Congratulations! I'm not sure even an NRL or AFL stars would have this sort of asset.

    I'm curious, how did you manage to get this wealth at such a young age? I've looked up mechanical fitter on seek. Average pay is about $70-$80 an hr. Assuming you work 40 hrs a week, thats around $160k a year. Your net income after tax is about $110k. But let say you did lots of overtime and manage to bring in $250k a year, thats $160k net. If you've worked for 5 yrs at this rate, that $800k but this is a big assumption!

    • Parasite on 10/12/2023 - 12:57
      +7

      Clearly you missed the profit income from boost mobile cashbacks in your calculations

  • tighttighttight on 10/12/2023 - 11:14
    +5

    You probably should give us advice rather than us providing you with one.

  • OneJay on 10/12/2023 - 11:20
    +3

    Do you have large trees kerbside outside your PPOR? In the spirit of Xmas, first thing is to wrap red ribbons around around them to remind the peasants of their place in the social hierarchy.

  • ar7ist on 10/12/2023 - 13:18
    +8

    Should I be feeling bad that at 30, my total portfolio is just cash in a bank account which is half of OP's emergency fund. And I work in Tech.

    • siresteelhell on 10/12/2023 - 13:22
      +8

      dont stress too much, its probably a full of crap troll post.. he`s just created his account to make it…

    • zorodluffy on 10/12/2023 - 13:25
      +1

      Yes

    • 900dollaridoos on 10/12/2023 - 13:36
      +2

      Depends if you like your job/life.
      As someone from mining, you lose out hard on life experiences, social, relationships and the jobs usually suck.
      Also if you're in tech you probably had a cruisey and fun uni experience while old mate was grinding out under trucks.

      Not saying either are right, just saying every choice has sacrifices.

    • ThithLord on 12/12/2023 - 15:55

      OP has failed to answer literally any question asking where they generated their wealth from. They wanted to appear smug but knew they relied on a "small loan of a $million" to get started

  • shap08 on 10/12/2023 - 13:51

    Not much of a super balance

    • Dreamcast on 11/12/2023 - 07:58

      True. But at 25 that's not bad. If legit of course…

  • drprox on 10/12/2023 - 14:16
    +5

    lol well I guess I'm 24 and have like $2.25m, anyone got some advice for me?

  • nigel deborah on 10/12/2023 - 14:41
    +12

    Just turned 16, I've got $12.6B. It's in trust until I get to 18, and advice for once that date hits?

    • ThithLord on 12/12/2023 - 15:55
      +1

      Buy yourself a nice ice cream

    • AlienC on 13/12/2023 - 07:17

      Hire a Spanish butler in nyc

    • 900dollaridoos on 13/12/2023 - 11:23

      Buy adspace on ozbargain so absolutely everyone knows about it

  • mrvaluepack on 10/12/2023 - 15:04

    You should add some bond etfs to your portfolio as interest rates are high right now.

    • Malik Nasser on 10/12/2023 - 19:01
      +1

      If he doesn't need income (which I assume he does not), then bonds are a bad option as you need to pay the tax man each year.
      Better to invest in ETF's with companies that don't pay much in dividends, but retain their earnings to accelerate growth. As such you pay minimal taxes, unless you sell at a gain (preferably dont sell at all, so pay no taxes. If you need funds, borrow against the assets, so this becomes tax free money, only have to pay interest expenses, which may also be tax deductible. This is how the rich work the system).

      • mrvaluepack on 10/12/2023 - 20:11

        Thats where a lot of people fall into the trap of just set and forget or use their age as a justification for asset allocation or tax minimization. The most optimal strategy is what would provide the best total returns today. And today, interest rates are high and inflation is falling. The yield curves have also become inverted, long term yields are lower than shorter term bonds which is a strong indicator of either a recession or that central banks will start lowering rates. When interest rates start falling, bond prices go up. There are 20 year periods throughout history where bonds have outperformed stocks.

  • Randolph Duke on 10/12/2023 - 15:13
    +15

    I remember been bored at 17 and making fake posts on the internet

  • Lunarboogie on 10/12/2023 - 15:46

    At your age, your ETF portfolio should be 100 per cent international shares and keep it there until you turn 50. Then start incorporating VAS to the mix, gradually.

    You also need to learn to live with debt. It can be your friend.

  • darque on 10/12/2023 - 15:49
    +1

    I think you're better off posting this on reddit r/aushenry or whirlpool, assuming you're not trolling. Plenty of folks in their 20s in the top 0.1% net worth.

    But jokes aside, is there a compelling reason for the all vanguard portfolio? I have a similar split, albeit more geared towards Betashares with A200/BGBL/VGE.

  • zooter on 10/12/2023 - 17:05
    +3

    I notice that you have no allocation to enloops which is worrying to say the least for somebody with a 1M+ portfolio….

  • Drakesy on 10/12/2023 - 17:26
    +1

    Should invest in a banana stand.

  • Briefcase Mong on 10/12/2023 - 19:22
    +1

    I find this very hard to believe

    • Nillionaire on 11/12/2023 - 10:27

      Eh why? It could be bs but I do know people irl with that type of money at that age

      • Drakesy on 11/12/2023 - 13:30
        +1

        Unless it's a whopping great inheritance there's a very high chance it's largely BS, even in mining you'd struggle to get to this wealth this early.

  • oddyseeh on 10/12/2023 - 19:54
    +1

    stroke my ego please

    • Aerith-Waifu on 10/12/2023 - 23:12
      +1

      He can also stroke something else too……lol

      • illusion99 on 11/12/2023 - 07:52

        Are you referring to his penis? Or your penis?

  • Diji on 10/12/2023 - 21:56

    Put it all on dogecoin

  • OzzyOzbourne on 10/12/2023 - 22:41
    +4

    Yeah ok champ

  • Aerith-Waifu on 10/12/2023 - 23:05
    +1

    Ok YouTuber I believe in you whole heartedly!

    Any advice on the following situation? Just got my revocation back from Crown after been banned many years ago winning 3.8m in Blackjack (Card Counting)

    Shall I go all in on black or red?

    • localhost on 11/12/2023 - 12:28

      Green, green, green!!! I mean green energy :)

  • jeeg on 11/12/2023 - 00:31
    +1

    So I am curious how a 25 year old could accumulate this amount of wealth that I think warrants him to have a seat next to Warren Buffet…..I have no idea how so I ask ChatGPT to do some thinking for me…this is what it says:

    To achieve the specified amount of wealth by age 25, let's break down the targets into yearly accumulation goals:

    Stock Market: $455,000
    Assuming an 18-year-old starting point and a target of $455,000 by age 25, you would need to accumulate approximately $65,000 per year.

    Superannuation: $100,000
    Since superannuation contributions are typically made through employment, it is difficult to calculate the exact annual accumulation needed. However, assuming regular contributions from age 18 to 25 and taking into account potential employer matching contributions and compound interest, aiming for an average annual contribution of around $10,000 could help you reach the desired amount.

    Emergency Fund: $40,000
    Allocating funds to build an emergency fund depends on personal circumstances and income levels. Saving around 15% of your yearly income could help accumulate the desired $40,000 emergency fund by age 25.

    Property (paid off): $650,000
    Assuming the property is paid off by age 25, you would need to save or invest in such a way that your property appreciates in value over time. It's challenging to determine an exact annual accumulation goal for this scenario since there are several variables involved, including property market fluctuations. Regularly monitoring the property market and seeking professional advice can help guide investment decisions.

    Considering these breakdowns, the individual would need to strive to accumulate approximately $75,000 - $80,000 per year across different areas (stock market, superannuation, emergency fund) to achieve the desired wealth targets by age 25. These figures are approximate estimations and will depend on individual circumstances, market conditions, investment returns, and personal discipline in saving and investing.

    • Aerith-Waifu on 11/12/2023 - 02:31
      +10

      It's not hard when the parents give him 2m and he end up blow 800k on drugs and ladies which end up with 1.2m now

  • Sammy Boi on 11/12/2023 - 00:32
    +4

    You should spend all of that money to get launched into space where you belong

  • Smol Cat on 11/12/2023 - 00:42

    Hey I’m about to get a mad inheritance payout from a Nigerian Prince. Any of you peasants got any ideas on what to do with all the brazzillions of dollars I’m about to be swimming in?

  • ddilrat on 11/12/2023 - 02:58
    +1

    Classic ozbargainer. 25 and house fully paid off

    • cunningdrew on 11/12/2023 - 09:14
      +2

      And still looking for coffee coupons and KFC hacks.

  • loadofrubbish on 11/12/2023 - 05:57

    Congratulations, when I was 25 I had a huge student loan and had only been in my first job 2 years. It is an outrageous achievement to have your own home and have 500k in the share market.

  • Duckie2hh on 11/12/2023 - 07:32
    +1

    How did you get to 1.25m worth of assets with 7 years of work (assuming you started at 18)?

    • Homr on 11/12/2023 - 08:59
      +4

      inheritance

      • ThithLord on 11/12/2023 - 09:18
        +1

        BRO I DON'T DO DEBTS - I JUST DON'T SIMPLY HAVE THE DEBT. I AM SELF MADE, THAT'S WHY I IGNORE EVERY OZBARGAINER ASKING QUESTIONS ON MY MEFFODS

        • R4 on 11/12/2023 - 14:19

          I don't think you were asked?

          And why are you shouting?

          • ThithLord on 11/12/2023 - 14:40
            +2

            @R4: I was mockingly impersonating OP, friend

  • Homr on 11/12/2023 - 08:59
    +5

    Wow, nice inheritance

    • AlienC on 13/12/2023 - 07:19

      Is it still an inheritance if foul play is in place?

  • cunningdrew on 11/12/2023 - 09:14

    I was having a decent start to the week. And then this. I have now crawled back inside of whence I came from. Carry on.

  • pnt on 11/12/2023 - 09:21
    +1

    Looks good to me. Live a little, look after yourself, don't burn out.

  • May4th on 11/12/2023 - 10:15

    assuming this is semi serious you are missing an asset class: crypto

    • Exorcist on 11/12/2023 - 11:01

      And more pyramid schemes

      • cunningdrew on 11/12/2023 - 12:02

        You didn't hodl, did you?

      • May4th on 11/12/2023 - 15:39

        have you watched billions? the stock market is the biggest pyramid scheme - the retail investor is always the bag holder

  • Penguin30 on 11/12/2023 - 11:02

    Stay away from government bonds huge possibility some govs default in the coming years. China was the biggest holder of US bonds and have exited most of their position…. Increase chances of war and sanctions have caused this.

  • mightyfes on 11/12/2023 - 11:29

    I don't think you have enough money to need advice on your portfolio. Don't fret it's normal to be poor at your age. Maybe save up for a couple of years and then come back.

  • mousie on 11/12/2023 - 11:37

    Please take out a life insurance policy and get a motorbike.

  • LollardHeretic on 11/12/2023 - 12:25
    +3

    Ah another Bank of Mum & Dad customer!

  • R4 on 11/12/2023 - 12:39
    +3

    This is pointless.

  • pistachio on 11/12/2023 - 13:27
    +2

    bragging troll?

  • drfuzzy on 11/12/2023 - 14:17

    Based on your views on diversification it is highly likely you inherited or were gifted the majority of this money.

    An entrepreneur who self-made this money by 25 years of age would have a different perspective to investing entirely.

  • SpicyStew on 11/12/2023 - 15:35

    its only AUD

  • Poor Ass on 11/12/2023 - 17:44

    is VGS also as annoying as VTS where you have to fill in bloody Ben8 US forms???

    • Briefcase Mong on 11/12/2023 - 19:01

      No you don’t need W8BEN with VGS it just has a higher management fee

      • Poor Ass on 11/12/2023 - 19:54

        Cool

        Really hate US domicile shares listed on ASX so difficult to fill in when you have a corporate trust and complosury withholding

  • lachhelix on 11/12/2023 - 18:09

    Lmao yeah righto mate 😂

  • Empharand on 11/12/2023 - 22:36
    +1

    Member Since
    09/12/2023

    BS, Troll, or Gloating/Bragging? Either that, or OP was born with a silver spoon in their mouth and had everything handed to them

    I guess we will never know…

  • Talonparty on 12/12/2023 - 00:27

    lol is this bait? are there really people who would post this kind of thing?

  • Oofy Doofy on 12/12/2023 - 02:04

    What makes you think anyone with half a brain would want to give you advice? This dude is straight larping.

  • Thaal Sinestro on 12/12/2023 - 07:45

    1.25 million wealth at age 25? The profile of a typical OzBargainer. You don't need to work; you can retire early. That's why Australia has a skills shortage; everyone retires early.

  • cashless on 12/12/2023 - 09:27
    +1

    Quick glance at your list of assets tells me you have got nowhere near enough invested in Superannuation, the most tax efficient way to invest for the long term.

    • shap08 on 12/12/2023 - 09:30
      +1

      yup, I'd say he needs to really pull up his socks if he wants to retire by 60

  • BeoWulf on 12/12/2023 - 09:46
    +1

    Get ready to have your inbox filled by indian scammers.

  • GuitarXXX on 12/12/2023 - 10:18

    I thought I would see someone saying this is troll.

  • hasher22 on 12/12/2023 - 11:45
    +1

    I honestly don't see a constructive post?

    I simply just see bragging or just a lonely man wanting validation (if the figures are true).

  • Eeples on 12/12/2023 - 19:16
    +1

    OP ought to be telling us his insights on how he acquired so much money.

    Then we all could do that.

    • drprox on 13/12/2023 - 07:40

      how do we get born into OPs family :(

  • cd54 on 12/12/2023 - 21:26

    Hey Ozbargainers. I wrote a post on my general thoughts re: personal financial planning - hope it helps OP and those participating. Cheers

    https://www.ozbargain.com.au/node/820024

  • bobolo on 12/12/2023 - 22:05

    Not bad, but not great. My portfolio was roughly triple yours when I was your age. Around $4m net value (net of debt as well). 100% property though. Keep at it lil bro

  • AlienC on 13/12/2023 - 07:21

    You are missing a taste of AlienC i appreciate like bitcoin in the 2011s come get some young meat flesh

  • Ciderfizz44 on 13/12/2023 - 08:46

    Weird flex but okay.

    Whirlpool is calling

  • ninnypoop on 13/12/2023 - 08:55

    Could you briefly detail your trajectory from hen you started working and saving to achieve what you have. Did you receive any sort of mum/dad bank help or inheritance?

    You've done amazingly well and I'm genuinely curious. Keen to know what I could have done better to set myself up like you have! Well done.

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