Ideas... not advice

[ducati916]

Re. the 'trading' aspect of your plan. Here are some [long] threads that will help you decide on a style of trading that might suit you.

https://www.aussiestockforums.com/threads/dump-it-here.34425/

Long thread, but read from start to finish, it will definitely give you something to think about with regard to mechanical or non-discretionary trading.

If you think 'safe' investments, here is a thread on 'fundamentals'.

https://www.aussiestockforums.com/threads/the-education-of-an-investor.34402/

Discretionary trading

https://www.aussiestockforums.com/threads/tech-as-technical-charts-of-interest.31431/

Probably keep you occupied for a while.

jog on
duc

 

[willoneau]

My god Kahuna1 why would you tell someone to sell a positively geared investment property? , the return is probably more than the interest payable on the home .

 

[kahuna1]

My god Kahuna1 why would you tell someone to sell a positively geared investment property? , the return is probably more than the interest payable on the home .

CAPITAL RETURNS ... is why .... I dont know the property but 100% of all assets in one class making maybe ... capital appreciation is NOT as good as buying prudently a share, when its got no friends, a decent company which will appreciate at inflation and PAY ... Return an income after tax ... and franking credits of 5% MORE ...

Your ahead of the investment property EACH and EVERY single year ... by a very long shot.
Its simple maths. Putting all the loans against the investment properties and claiming an allowable tax deduction ... if you decide the property has MORE upside due to say some special reason, again .... getting say a 20k tax deduction and not paying tax on 20k income say at close to 50% marginal rate for the top end of your income ... is WHAT a good financial advisor or a top line accountant should tell you. All be it for $500 an hour or so.

It is a pragmatic and hard nosed approach which one must take. Having the investment property which YES due to a large portion of the value being NOT leveraged you break even on the interest of the leveraged portion of the value, SOUNDS nice, but its a wank !! If you make 1% over inflation .... on capital appreciation and over time with repairs and so on break even on the loan service .... in 10 years your maybe 10% ahead !! Maybe. Sure rents go up, but so too do other costs and rates and so on.

I prefer, taking the say 400k out of a 750 k investment and getting a 5% return on the 400k and being ascab buying into terror and selling or reducing into times like NOW ... getting an overall above inflation outcome of say 5% ... if not a lot more, instead of ending with a 10% or 20% at the end of 10 years ... you end up with 5% income times 10 years plus 5% above inflation after 10 years and compounding as time goes on, well .... one .... MAYBE and MAYBE 20% return ... the other, with some work and supreme discipline and NOT trading but buying out of favor blue chip stocks ... with dividends and you end up with not a REAL return of 20% at best but one that's 250% or so.

Your question and .... belief ... obviously is not based upon any fundamental analysis or rational basis.

Maybe, as I said the investment property has redevelopment potential or some other factor which makes it different, say a massive block with added things, but that ... to one side, the long term holding of an asset that likely will whilst do well, fairly safe, but not even in the same ballpark as one that's producing an income and if your judicious in your buys, and patient to reduce and take some risk OUT from time to time, their is no comparison in the two as long term investments.

NONE. Buying for example a long list of quite decent stocks, massive ones late last year such as a few banks like NAB, WBC and so on, a longer list of very much out of favor great and massive companies and listed infrastructure things with yields that hit 7% or so late last year, and hey presto, now 25% higher and in some cases 40% even 100% .... is not something any property is likely to do. Sure we are in interesting times, but buying something and being paid 7% tax free with franking credits to hold and be patient and then going, OK .... let the new hero own it at 4% yield or 5% ... await the next correction and as the price slides, the yield and dividend potential rises and you go, OK i sold it at $28.50 at $26 its getting cheap, at $25 very cheap and at $24. well the world ends, or Its a good buy ,,,, and 7% yield with franking credits and tax paid ....

Hard investment strategy but holding a unit in a decent area that MAY increase at say 3% over 10 years a mere 1% over inflation over 10 years whilst sounds nice, the kitchen is now needing replacement and bathrooms and whilst 30% sounds good, I have taken this OUT of the returns one must demand from investments in stocks, Bottom line you need 3% for just inflation and 8% .... overall which requires some work from time to time to let things go ... when things go well and then conversely as cash piles up ... from dividends and divesting a bit at one extreme and sometimes a lot, in times of euphoric stupidity, the pile of cash or slight leverage on a share portfolio ... say 10% on the DIP .... you go from 110% invested and over a few years, to 10% in cash if no standout cheap stock strikes you and if your your lucky, you sell a little more at the top end of things and reduce ... to say 70% overall invested, market has a cow .... goes down 15% ... as it will and does periodically, your back 100% in vested or 110% invested and start it all over again.

Complex but a plan. A good one, which well is LOST on most.

Take care

 

[barney]

Me 55, wife 48..both working part time and this can be the case for the next at least 5 years. Combined income about 100k. No remaining dependents. Good at frugality.

Hi Lindsay. I think you are doing just fine and don't really need any advice

But since you asked ….

If you remain healthy, and assuming you like your job, keep working!

It is providing you with all the available cash you need to live happily, plus you have plenty of passive income with your RP's … and spare time!

You obviously like to trade, so simply trade with risk as your main priority, and only a small portion of your funds (I doubt you need to trade for the money)

If or when you or any of us get too old or too unwell to work, all the money in the world is of little use anyway, so my advice, keep doing what you are doing!

Perhaps in a few years, you might simply cut back on the job (if that's possible) to give you more spare time …… $50K annually will still get you enough pizza and Chinese takeaway to keep the wife happy cause she doesn't have to cook every night! (I actually assume you do a lot of the cooking anyway because most of us men do now days)

 

[tech/a]

It really depends on how you want to live in retirement and for how long——
Often a guess

The best way in my view is two simple things which are in their implementation
Complex.

(1) Save or accumulate enough asset that you can liquidate if needed
(2) Have one or more ways of having a continuous income stream through retirement.

(1) Gives rise to (2)

Keep working can be part of (2) keep your business and draw a wage is similar
Endless opportunities which you should put into place leading up to retirement or semi retirement.

Everyone else are filling in the possibilities.
Your well on your way!

 

[willoneau]

I'm sorry Kahuna1 , I started to lose interest when you started to make a lot of assumptions to back up your statements. I agree my fundamental analysis or rational basis has no base but wait, how quickly we forget about the housing boom (which i did well more luck though at time) and 4 years of positive trading profits in this hard stock climate must be luck too. So i guess forget what I said as i have no idea what i'm talking about.
PS I only have 1 positively geared investment property so am jealous of Lindsay
Take care.

 

[kahuna1]

I started to lose interest

Yep ... 4 years, bravo .... positive returns in a rising market that's gone from 4,200 to 6,800 on the ASX 200.
You are my hero.

Race 3 .... horse 3 .... at the TAB. Better still use a chart and follow a chart .... or maybe moon cycles ? I hear they work for some !!

 

[willoneau]

No hero here, simple facts based on actual results, don,t go to TAB or Casino that's gambling.
I think others that actually trade the aussie market will agree that 2017 and to some extent 2018 have been difficult.
I forgot to mention 17 years of losses before it.
Moon cycles is Gann theory which i did try but failed at.
I did try system betting on the horses for 6 weeks but the odds are stacked against you so gave that away.



Not my definition of a trending bull market.
Take care.

 

[kahuna1]

Not my definition of a trending bull market.

ASX 200 going from 4,200 to 6,800 ...

RISE OF 62% in 4 years, not a trend ?

Okay. When talking about long term investments and incomes for say the Gent and his wife needed for 40 years, perspective and actual MATHS is needed I suspect. Long term hard nosed maths.

Anyone, even my pet goldfish makes money in wildly bullish markets. As they say, Sh&T floats and its amusing some of the ones floating right now.

Enuf from my perspective. If I didn't make money, I could not eat or exist. ITs all i do and have done for a very long time, all my adult life.

Take care

PS I was not talking about TAB the share ... but going to the TAB and the poor fellows betting on horses or say buying a lotto ticket expecting to win every week. NOT the TAB business or TAB share which I might add, down here, merged with tatts and paying over 5% dividend is NOT a bad bet with so many suckers spending at their various gambling ventures. .TAB paying 5% fully franked and invested say in 2000 ... if one reinvested the dividends the end result of the $3.06 ish starting price, well .... close to $8.00 ... so not a great example .... but far better than most. A stock like say CSL ... $7- to over $200- and a blue chip all that time let alone dividend reinvested so $300- ... and maybe perspective is lost ... MFG pre say 2008 at $1- and below ... to $62 peak and a lot of dividends ... about 100/1 .... blue chip .... even CBA mid-range $25 to $80 .... without dividends and with them at 7% ave .... 6 times increase in value. I doubt any property does that well over time ....

 

[willoneau]

BE an investor .... NOT a trader.
Now I sent you to the TAB ... next trip ... LOOK and find some homeless person and SIT and study them, and elderly one ... and ask yourself DO you love your wife ? Do you love yourself ? Have a good look ... a very good look ... and remember less than 1% of traders actually make money over time.

Why carn't you be both?
Less than 1% of traders actually make money over time , were did you pull that one out of?
64% raise in 4 years , really i just showed you a chart of 2017 to 2019
6/1/17 high of 5818 - 4/1/19 high 5760, i would say down not up but again only a fact.

 

[lindsayf]

Ok thanks for all the replies.
No time to digest them just now but just for added context...Note my membership date here..I have been trading on and off for about 10 years...I am no beginner so we can skip any thoughts that come from there. I wont be blindly beginning a trading system at a market high and I wont be putting ppr or any property at risk with silly trading dreams. I am educated about what and how trading returns, if they come, are realistic.
I will have a good look at replies over the next few days...
All ideas much appreciated thks again

 

[willoneau]

Hi Lindsayf, I think the discussion i and Kahuna1 got into was because of such a very open set of questions that have many different interpretations. Discussing one question at a time might be more thought provoking?

 

[Smurf1976]

A lot of this reminds me of a fairly common saying:

"Time in the market not timing the market"

The point to realise is that the above is either absolutely true or is a load of nonsense depending on when you choose to put it to the test.

Toward the end of a bull market - time in the market is all you need to have made a profit.

Toward the end of a bear market - too much time in the market will have seen your funds diminish greatly.

Whenever one approach is clearly superior to the other based on past performance it's time to be doing the opposite.

When fund managers start widely quoting that saying, because at that moment in time it is actually true, then it's time to sell.

 

[Sir Burr]

the world is ending and IT WILL OCCUR

Just some stats on the Allords I've plucked out of the www. Interesting looking at the worst years and within 1-2-3 years a rebound.

I like buy and hold index ETFs (more global) plus a portion towards a trading system on the ASX. Dividend ETFs/LICs, not bothered as an income. Mainly capital gains will do

Also, depends on your situation but paying off debt first then $25K salary sacrifice into super seems a good idea (to me) getting closer to retirement.

Decade Average Return
1880s +15%
1890s +7%
1900s +12%
1910s +8%
1920s +14%
1930s +10%
1940s +9%
1950s +14%
1960s +13%
1970s +10%
1980s +21%
1990s +13%
2000s +14%

Decade Negative Years
1880s 1
1890s 2
1900s 1
1910s 2
1920s 1
1930s 2
1940s 1
1950s 2
1960s 2
1970s 4
1980s 4
1990s 3
2000s 3

Worse years
1889 -1%
1891 -10%
1901 -3%
1915 -4%
1929 -5%
1930 -30%
1941 -6%
1952 -13%
1965 -8%
1974 -26%
1982 -14%
1990 -18%
2008 -40%

Best years
1883 +29%
1895 +26%
1903 +22%
1919 +19%
1922 +21%
1933 +26%
1942 +18%
1959 +44%
1967 +43%
1975 +55%
1983 +67%
1993 +44%
2009 +34%

 

[Smurf1976]

Just some stats on the Allords I've plucked out of the www. Interesting looking at the worst years and within 1-2-3 years a rebound.

Don't forget that a 33% decline needs a 50% increase just to get back to the starting point.

 

[willy1111]

Putting all the loans against the investment properties and claiming an allowable tax deduction ...

@kahuna1 are you saying if he transfers the $350k loan he has owing on his home to his investment property, the interest on the $350k will suddenly become tax deductible?

 

[qldfrog]

@kahuna1 are you saying if he transfers the $350k loan he has owing on his home to his investment property, the interest on the $350k will suddenly become tax deductible?

I think you can more or less do that
In any case always minimise or better pay off your ppor mortgage
In term of risk and tax advantage, very rarely beaten

 

[kahuna1]

Yes ... but the security for the loan .... MUST be the investment property .... it may be the bank needs more security such as the title of the home as the loan.


The LOAN is a NEW loan with the bank with the investment property FOR a new amount and primary security for the loan is the title over the investment property .... it may be they require secondary security like the title of your house as well ... but the loan is over the investment property.


And yes the loan will become deductible ... it already WAS ... that you have to refinance and make it bigger is irrelevant !!

 

[willoneau]

I don't agree but you can try.

investment worth 500,000 and 400,000 paid off
home owing 400,000
refinance investment to 500,000 but no new investment property only paying off home mortage.
I think tax department might have soming to say about reclaiming interest on the investment property again.

 

[kahuna1]

Howdy

Having an accounting degree, and masters along with tax qualifications I have NO idea .... what the hell you think your talking about.

Sorry but absurd, what your saying.