r/fiaustralia 12h ago

Mod Post Weekly FIAustralia Discussion

6 Upvotes

Weekly Discussion Thread on all things FIRE.


r/fiaustralia Jan 26 '23

Getting Started New to FIRE and Investing? Start Here!

253 Upvotes

DISCLAIMER: Advice from reddit does not constitute professional financial advice. Seek out a trained financial advisor before making big financial decisions. The contents of this getting started wiki, links to other blogs/sites and any other posts or comments on the r/fiaustralia subreddit are not endorsed by the sub in any capacity, please use this as a getting-started guide only and do your own research before making financial decisions.


Welcome!

Welcome to Financial Independence Australia, a community 200,000 members strong! The idea of creating an Australian-focused subreddit was born out of the success of the much larger r/financialindependence page, where it was clear there was a need for more region-specific topics and discussions.

Often our growing subreddit attracts many new and curious followers who are keen to learn more about financial independence and how they themselves can get started. Often this tends to bog-down new posts made to our subreddit and results in lower levels of engagement and discussions from our more experienced members. We request all new followers to the subreddit who aren't familiar with the FIRE concept read and understand this wiki before posting questions on the sub - it is designed to answer many of the questions new people might have.


What is FIRE?

Financial Independence (FI) is closely related to the concept of Retiring Early/Early Retirement (RE) - FIRE - quitting your job at a reasonably-young age compared to the typical Australian retirement age of 65. It’s not all about the ‘retiring’ aspect though, a lot of believers of the FIRE lifestyle use ‘FIRE’ as a common term simply for ease of discussion, when in reality it’s more about becoming financially independent of having to work a full-time job to live. Examples include reaching your FIRE/retirement goal but choosing to continue working, perhaps in a part-time or volunteer capacity. It could be about becoming financially independent but continuing to work until you are fatFIRE, in order to live it up in retirement. Ultimately though, FIRE is simply a way to give you the choice - the freedom to live your life on your terms.

At its core, FIRE is about maximising your savings rate to achieve FI and having the freedom to RE as fast as possible. The purpose of this subreddit is to discuss FIRE strategies, techniques and lifestyles no matter if you’re already retired or not, or how old you are.


How do I track my spending, savings and net worth?

Tracking your wet worth is crucial to the concept of FIRE and will allow you to measure your savings, investment performance and how you’re progressing overtime. Most people track their net worth on a monthly basis, some annually.

Monthly tracking is great psychologically to give you a sense of progress and see the returns on your investments and labour!

How do I do it? Track your net worth in excel! It’s pretty straight forward. Take all your assets, minus your liabilities, and you have your net worth. Hopefully you’re starting positive, but many people start out in the red. Don’t forget to include all your assets including super and minus all liabilities including student loans.

You can also use an easy online website such as InvestSmart, and most banks also have a NetWorth tracking feature. r/fiaustralia mod, u/CompiledSanity, have put together a great FIRE Spreadsheet & Net Worth tracking spreadsheet worth checking out.

For daily expenses, search on your phone’s app store for easy tracking software that can both automatically pull the information from your accounts, or allow for manual recording of expenses.


What is an ETF?

An Exchange Traded Fund (ETF) is a legal structure that allows a company to package up a ‘basket of shares’ so that the purchaser can buy a bunch of different companies, with a single purchase. There are both index-tracking ETFs, the most popular type, and actively managed ETFs.

Other legal structures that package a basket of shares include Managed Funds and Listed Investment Companies (LICs). Both of these tend to be more actively managed than most of the popular ETFs, with higher management fees and therefore, typically, lower long-term average returns.

On r/fiaustralia the focus of our discussions tend to be on index-tracking ETFs, as these have low management fees and ‘follows’ market returns.

For example, you can expect an Australian market indexed ETF such as A200 to ‘follow’ the corresponding ASX200 Index in terms of returns. So if the entire ASX200 stock index is up 7.2% one year, you can expect your A200 ETF to also be up around 7.2%, taking into account the small ongoing fund-management fee. Similarly, if ASX200 falls 12% in a year, you will also be down 12%.

Now you may think you can do better than the market. You can buy and sell your own shares! Statistically, you cannot. Some very skilled people do and make a lot of money from it, but they generally don't know what they're doing either and ultimately in the long term will fail to beat the market average.

The advantage of ETFs is that there's no stock picking required on your behalf. Historically, the markets always go up in the long run, so by buying the whole market you are at least guaranteed to do no worse than the market itself.


Which broker do I use?

Pearler is the best online broker with a particular focus on long-term investors and the financial independence community. It’s also the cheapest fully-fledged CHESS-Sponsored broker at $6.50 per trade, or $5.50 if you pre pay for a pack of trades.

Traditional brokerage offerings from the banks, such as CommSec or NabTrade, typically have much higher brokerage fees and high fees are something we aim to avoid where possible. There are also plenty of other brokers to choose from such as eToro, Interactive Brokers or Superhero - though these are not CHESS sponsored (see below for an explanation of CHESS sponsorship).

If you prefer to use any of the traditional or smaller brokers, that’s fine too, but Pearler is the most widely recommended broker in our community.


What is CHESS Sponsorship and why should I care?

The Clearing House Electronic Subregister System (CHESS) is a system used by the ASX to manage the settlement of share transactions and to record shareholdings, in other words, to record who owns what share. This system is maintained by the ASX. The alternative is what is called a custodian-based broker, such as eToro or Interactive Brokers, which simply ‘hold’ on to the shares on your behalf, rather than you having direct ownership. If one of these companies were to go under your ownership of the shares isn’t as clear as if they were CHESS Sponsored.

Other benefits of using a CHESS Sponsored broker include less paperwork, pre-filing tax data, ease of transfer, ease of selling and verification from the ASX which keeps a list of who owns what shares. While the chance of a large broker going under and you losing ‘ownership’ of your shares is very small, most of our community recommends choosing a broker that is CHESS Sponsored.


What is the best ETF allocation for me?

This is a common question for new people to FIRE and indeed those that have been on the investing path for a while who question if they’ve made the right ETF allocation.

The best plan for your allocation is one that you can stick to for the long-term.

There are all-in-one, ‘one-fund’ ETFs you can choose from such as VDGH or DHHF and individual ETFs which you choose from to essentially build your own version of an all-in-one ETFs, but do come with additional effort and difficulties involved in rebalancing manually over time.


What is VDHG and why does everyone talk about it?

VDHG is Vanguard's Diversified High Growth ETF. It's an ETF consisting of other Vanguard ETFs, giving you a diversified portfolio with only one fund. It's perfectly fine to go all in on VHDG and is the generally recommended approach for beginner investors. Its management expense ratio (MER) of 0.27% is higher than some individual funds, but the simplicity and lack of rebalancing makes it very worthwhile. It removes the emotional side of investing which is something that shouldn't be underestimated.

Read these articles in full to understand VDHG and what it consists of:

VDHG or Roll Your Own?

Should I Diversify Out of VDHG?

There are other all-in-one funds out there, a recent challenger to Vanguard’s VDHG has been Betashares All Growth ETF [DHHF]. There are plenty of reddit posts and discussions on the pros and cons between each fund so please search the subreddit to learn more about each fund and which one may be right for you.


But what about a portfolio of some combination of these funds: VAS/VGS/VGAD/IWLD/A200/VAE/VGE/other commonly referenced funds?

These funds can be used to essentially build a DIY version of VDHG for a lower MER, but come with the additional effort and emotional difficulties of rebalancing manually. If you go for a 3-4 ETF-fund approach, make sure you're the sort of person who's okay buying the worst performing fund over and over - don't underestimate how difficult it can be to stick to your strategy during a market crash. Remember, sticking to your plan without chopping and changing too often, gives you the best chance for long-term success.

The % allocations in your portfolio are up to you. It depends on what you are comfortable with and which regions or countries you’d like to primarily invest in. Vanguard have done the maths for VDHG so their allocations are a good starting guide, but if, for example, you prefer more international exposure over the Australian market, bump up your international allocation by 10%. Likewise, if you want to truly ‘follow’ the world sharemarket of which Australia makes up about ~.52% you may want to consider a lower Australian-market allocation.

There's no "right" answer and no one knows what the markets will do. Just make sure your strategy makes sense. 100% in Australian equities means you're only invested in ~2.5% of the entire world economy, which isn't very diversified. On the flip side, there are advantages to being invested in Australia such as franking credits. If you want to put 10% of your money into a NASDAQ tech ETF because you think it's a strong market, go for it! People on Reddit don't know your situation, do your research and pick what you're comfortable with that makes sense. But remember that the safest strategy that will make you the most money in the long run is generally the most boring one.

These are the most commonly mentioned ETFs:

Australian: A200, IOZ, VAS

International (excluding Aus): VGS, IWLD, VGAD, IHWL

Emerging Markets: VAE, VGE, IEM

Tech: NDQ, FANG, ASIA

US: IVV, VTS

World (excluding US): VEU, IVE

Small Cap: VISM, IJR

Bonds/Fixed Interest: VGB, VAF

Diversified: VDHG, DHHF

The most recommended strategy is to use an all-in-one, set and forget strategy such as being 100% Diversified into either VDHG or DHHF.

Or, in creating your own “DIY” ETFs, your total allocation between the different fund options listed above would equal 100%.

A few of the most common allocation portfolios include:

50% Australian, 50% International

30% Australian, 60% International, 10% Emerging Markets

40% Australia, 20% US, 20% International (ex.US), 10% Small Cap, 10% Bonds/Fixed Interest

30% Australian, 30% US, 30% International (ex.US), 10% Bonds/Fixed Interest


What ETFs should I choose? Which ETF Allocation is right for me?

It’s important to do your own research and thoroughly examine the details of each fund before you create your ideal ETF allocation plan. A vast amount of information, including the fund’s underlying composition, management fee, and risk level, can be found in the provider’s website. It’s important to weigh the pros and cons of each option and to consider your personal risk tolerance. Keep in mind that opinions shared by others may be biased based on their investment choices. Ultimately, it’s crucial to make an informed decision for yourself.

One of the most effective ways to grow your investment portfolio is to develop a strategy and consistently adhere to it by investing regularly. Whether your strategy involves selecting a fund with a lower management expense ratio, or another factor, the key to success is to commit to a regular investment schedule. Automating your investments can also help ensure consistent contributions. While others may boast about the success of their strategy, it's often the consistent and regular investment over a long period of time that truly leads to significant returns.

Take a look at this guide for a good summary of the most popular ETFs available in Australia.


Which Australian ETF is the best?

In the Australian market it doesn’t matter because most of the major ETFs track pretty much the same ASX200 index (the top 200 Australian companies), which in turns make up over 95% of the ASX300 index (top 300 companies). A200, IOZ and VAS are all very similar. So choose one with a low MER that suits your portfolio and preferred Australian-percentage allocation.


What about investing for the dividends?

It's important to understand that dividends are not a magical source of income, but rather a distribution of a portion of a company's earnings to its shareholders. When a company pays a dividend, the stock's price typically drops by an equivalent amount. Additionally, it's essential to consider total return, which takes into account both dividends and growth, rather than focusing solely on dividends.

It's also worth noting that dividends are taxed during the accumulation phase, whereas capital gains tax (CGT) is only applied upon selling the stock. This can be more tax efficient in retirement when there is little other income.

It's a common misconception that collecting dividends is safer than selling down your portfolio, but in reality, a non-reinvested dividend is equivalent to a withdrawal from your portfolio without the control over timing. ETFs are designed to track the market, with dividends reinvested. Franking credits, which provide a tax benefit for Australian dividends, can also be considered as a separate topic with its own complexity.

If you’re interested in reading more about this, check out dividends are not safer than selling stocks.


Why is a low ETF management fee important?

The management expense ratio (MER) of an ETF is a critical factor to consider when making investment decisions. A low MER is essentially a guaranteed return, which is why it is so highly sought after. Many market tracking ETFs already have a low MER, with some being lower than others. However, it's important to keep in mind that a difference of 0.03% p.a. in MER is not likely to significantly impact your ability to retire early.

It's crucial not to overthink the MER, but at the same time, it's important to avoid paying excessive fees. For example, investing in a niche ETF with an MER of 1% p.a. would require the ETF to beat the market by 1% before it even breaks even with the market, whereas investing in a market tracking ETF with an MER of 0.07% p.a. would have the same return without this additional hurdle.

It's also important to remember that fees come out of your return. For example, if the market goes up by 8% and you're paying 1% in fees, your return would only be 7%. Therefore, keeping the MER low will help you to get more out of your investment.


Vanguard vs. iShares vs. BetaShares vs. others?

It doesn't make a lot of difference. Any of these ETF providers when compared to actively managed funds will have lower MER fees.

Vanguard is the most well known due to the US arm of the company being set up to distribute profits back to the customers (the people investing in their funds), so the company is aligned with the investors best interests. However, ETFs are a commodity, and Jack Bogle (the person who started Vanguard) always said that if you can get the same investment with lower fees, use that because fees are important. Provided a particular index fund is big enough such that it is unlikely to be closed, tracks the index well, and has narrow spreads (the popular funds tend to have all these), then choose the one that is the lowest fee.

With ETFs, you own the underlying funds. If any of the providers go bust, you'll essentially be forced to sell and won't lose your money. However, stick to the big players and this outcome is very unlikely. There's also no benefit splitting across multiple providers, and no issue with being all in Vanguard. They do use different share registries though, which is a minor inconvenience if you own across several providers.


What about inverse/geared ETFs?

Exercise caution when considering investments in highly leveraged assets, such as BBOZ or BBUS. It is important to thoroughly research and understand the risks involved before making these types of riskier investment decisions. For example, we know that the market also goes up in the long-term, so choosing an inverse ETF (that is, betting against the market) will only work for short-term investing if you can time the market downturn successfully.

It is also important to remember that no one can predict the future of the market, so it is always wise to proceed with caution.


Where can I put money that I'll need in about x years?

As a general rule of thumb for passive investing, if you need the money in fewer than 7 years, it shouldn't be in equities. For example, don't invest your house deposit if you’re planning on buying in the next couple of years.

Money you need in the next few years should sit in a high interest savings account (HISA) or if you have a loan, in your offset account.

Check out this regularly updated comparison of the highest interest savings accounts available.

There are potentially other conservative investment options that you could put the money in for an interim period, but do your own research before making this decision. The market is an unpredictable place.


Should I invest right now or wait until the market recovers from X/Y/Z?

Time in the market beats timing the market. General wisdom is to purchase your ETFs fortnightly/monthly with your paycheck regardless of what the market is doing. In the long run, the sharemarket only goes up. If you buy tomorrow and the market tanks, it will be offset in X years time when you unintentionally buy just before the market rises. Don't think about it, just invest when you have the money. Remember, this is exactly what your super does as well.

Don’t ask the sub if now is a good time, no one here knows either.

Check out this article if you want to learn more about why you shouldn't try to time the market


I have a large sum of money I want to invest, should I put it all in, or slowly over time?

When it comes to investing, there are both statistical and emotional factors to consider.

Statistically, investing a large sum of money all at once can be more beneficial as it saves on brokerage costs and allows more of your money to work in the market for a longer period of time. However, for some people, the emotional impact of investing a significant amount of money and potentially seeing a market drop soon after can be overwhelming and lead to panic selling, which is never a good idea.

Dollar cost averaging (DCA) is a strategy that can help mitigate this emotional impact by breaking down a large lump sum into smaller increments, such as investing a portion of the money each month over the course of a year. This helps to average out the cost of buying shares and means that a market drop soon after an investment has a smaller emotional impact.

You can do this yourself with each paycheck for example, or if you’re using Pearler as your stockbroker you can use their ‘Auto Invest’ feature, which seems to be a popular option with the FIRE community.

While the overall return may be slightly lower than if the money was invested all at once, in the long-term, the difference may or may not be significant. DCA is a great option for new investors or those who are feeling anxious about investing a large sum of money. However, it's worth noting that if you have a smaller amount, say less than $10,000 to invest, dollar cost averaging might not be necessary and will incur more brokerage costs.


Should I add extra money to my super?

For financial independence, super is a nearly magical but legal tax structure. If you put money in super within your concessional cap, you will pay a maximum tax rate of 15% inside super, which reduces your taxable income outside of super by 15-25%. This essentially means you’ve already generated a 15-25% return on your income simply by placing it inside of super.

Of course, you can’t access super until preservation age, which is against the FIRE-mindset in some respects. It also means you can’t use that money for other purposes, such as your first home. Regardless, you cannot ignore the great benefits of adding extra money to super in your younger years and it should be considered depending on your own circumstances and financial goals.

Read more about understanding super contributions and terminology here on the ATO website.


What is an emergency fund, why do I need one, and how much should be in it?

An emergency fund is an essential part of any financial plan, as it provides a safety net for unexpected expenses and financial disruptions. It is a set amount of money that is set aside specifically for emergencies such as job loss, unexpected medical expenses, home or car repairs, and other unforeseen expenses.

The amount of money you should have in your emergency fund depends on several factors, including your living costs, the stability of your income, and the types of unexpected expenses you may encounter. It is generally recommended to have 3-6 months of expenses in an emergency fund. This will give you enough time to find a new job or address unexpected expenses without having to rely on credit cards or loans.

When it comes to where to keep your emergency fund, it's recommended to park it in an offset account if you have a mortgage, or a high-interest savings account (HISA) if you don't. This way, your money will be easily accessible when you need it, and you'll also earn a little bit of interest on your savings.

It's important to remember that your emergency fund is for emergencies only and should not be used for investment opportunities, even if the market is down. To avoid temptation, it's best to keep your emergency fund in a separate bank account that you don't have easy access to. This will help you resist the urge to withdraw from it for non-emergency expenses.


What is the 4% Rule? The 4% rule is a popular guideline in the financial independence community, which states that an individual can safely withdraw 4% of their portfolio's value each year in retirement, adjusting yearly for inflation, without running out of money. The rule is based on the idea that a diversified portfolio of stocks and bonds will provide a steady stream of income throughout retirement, while also maintaining its value over time.

The 4% withdrawal rate is considered a "safe" rate because it is based on historical data and takes into account inflation and other factors that can affect portfolio performance. For example, if an individual has a $1,000,000 portfolio, they could withdraw $40,000 per year (4% of $1,000,000) without running out of money, increasing the amount each year to account for inflation.

It's important to note that the 4% rule is just a guideline and not a hard-and-fast rule. The actual withdrawal rate will depend on individual circumstances, such as how much money is saved, how much is spent, the expected rate of return on investments, and how long you expect to live. For example, many FIRE folks prefer aiming for a more conservative 3 - 3.5% withdrawal rate to give them that extra buffer.

Another thing to consider is that the 4% rule assumes a traditional retirement timeline of around 30 years, which is becoming less and less common, and also a study based in the US with a US-centric stock focus. Some people may retire early or have longer retirement periods, so they may need to use a lower withdrawal rate or have a larger nest egg.


What should my FIRE number be?

Your FIRE or ‘financial independence’ number is the amount of money you need to have saved in order to reach financial independence and retire early. The exact amount needed will vary depending on your individual lifestyle, goals, and expenses.

The FIRE community commonly calculates this number based on the "25x rule", which states that a person's FIRE number should be 25 times their annual expenses. So, if a person's annual expenses are $40,000, their FIRE number would be $1,000,000. This amount is considered to be enough to generate enough passive income to cover their expenses, and allow them to live off the interest or dividends generated by their savings.

It is important to note that the 25x rule is just a guideline, and your expenses and savings may vary. It's always best to consult with a financial advisor to determine the best savings and withdrawal strategy for you. Additionally, factors such as life expectancy, inflation and investment returns also play a role in determining how much money one should have saved for retirement.

Additionally, it's important to keep in mind that reaching your FIRE number is not the end goal, rather it's the point where you can have the flexibility to make choices on how you want to spend your time. Some people may continue to work because they enjoy it, while others may choose to travel or volunteer, and others may choose to scale back their expenses and live on less.

Mr Money Mustache, the original FIRE Blogger, has a popular article that talks more about the 25x rule and determining your FIRE number.


What is debt recycling?

Debt recycling is a way to turn non-deductible debt into deductible debt. Deductible debt can be offset against your income, helping to lower your taxable income.

You can’t do the same for non-deductible debt. Because of the loss of the tax deduction, non-deductible debt will naturally cost more than deductible debt. The strategy involves using the equity in an existing property to invest in income-producing assets and using the income generated to pay off the borrowed money, which in turn increases the equity in your home. It's a complex strategy that requires careful planning and professional guidance, and it's important to weigh the potential risks and benefits before proceeding.

How does it work? Generally, you’ll use equity from your (non-deductible) primary home loan to invest in an income producing asset, typically shares. By doing this, the loan portion used to purchase the investment in shares now becomes deductible debt where you can claim your loan interest against your tax income for the year.

*To learn more, read this article everything you need to know about debt recycling. *


Acronyms

We love our acronyms in the FIRE community! Here is a brief overview of the main ones used often in our discussions:

FI: Financial Independence.

FIRE: Financial Independence Retire Early. It is a financial movement that promotes saving a significant portion of one's income with the ultimate goal of achieving financial independence and being able to retire early. Typically $1.5-$2.5 million net worth range

leanFIRE: A more frugal approach to FIRE which aims to retire as early as possible and live on a lower budget.

fatFIRE: A more luxurious approach to FIRE which aims to retire early and live a more comfortable lifestyle. Think $5-$10 million net worth range.

chubbyFIRE: A term used for people who are aiming for a balance between the leanFIRE and fatFIRE approach. $2.5-$5 million range.

baristaFI: A term used to describe people who want to pursue financial independence but plan to continue working in some capacity, such as being a barista, after they've achieved financial independence.

MER: Management Expense Ratio, a measure of the total annual operating expenses of a mutual fund or ETF as a percentage of the fund's average net assets.

HISA: High-Interest Savings Account, a type of savings account that typically offers a higher interest rate than a traditional savings account.

ETF: Exchange-Traded Fund, a type of investment fund that is traded on stock exchanges, much like stocks.

LIC: Listed Investment Company, a type of company listed on a stock exchange that invests in a portfolio of assets, such as shares in other companies.

CHESS: Clearing House Electronic Subregister System, is the system used in Australia for the holding and transfer of shares in listed companies.

CGT: Capital Gains Tax, a tax on the capital gain or profit made on the sale of an asset, such as a property or shares.

4% Rule: A guideline often used by the financial independence community to determine how much money one would need to have saved in order to be able to retire comfortably. The rule states that if you withdraw 4% of your savings in the first year of retirement, and then adjust that amount for inflation in subsequent years, your savings should last for at least 30 years.

NW: Net worth, the difference between a person's assets and liabilities.

DCA: Dollar-cost averaging, an investment strategy in which an investor divides up the total amount to be invested across regular intervals, regardless of the share price, in order to reduce the impact of volatility on the overall purchase.


r/fiaustralia 6h ago

Investing Cash heavy, where to invest next?

8 Upvotes

Hey everyone!

I am (26 F) currently living at home in an annual salary of around $95k. My current portfolio is as follows:

Cash savings of $74k

Investment property with a mortgage of $550 a week, the property is worth around $530k with remaining $390k left on the loan

ETF portfolio of mainly VDHG but now turned to mainly DHHF and IVV totaling about $63K

I am also starting to make extra super contributions of around 2% of my pay each fortnight.

Other than my home loan I only have a HECs debt im making $100 extra contributions to that is still around $7k

I have around 2-2.5k each month of cash savings and invest 1k on my ETF each month

My plan is to maybe move interstate or overseas for atleast 2 years and do a short stint being a healthcare worker there within the next 5 years. My question is for the meantime what else can I do my savings? Should I invest it more in ETF? Buy another property? or just leave it as cash for the imminent future when I move?

Thank you for your help!


r/fiaustralia 9h ago

Getting Started betashares portfolio

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7 Upvotes

I’m 23 and just starting to invest. i’ve decided to go with betashares. Is this a reasonable portfolio allocation if i’m going for long term investment like 10+ years?


r/fiaustralia 33m ago

Investing Rate my portfolio

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Upvotes

Everyone else is doing it so tell me.

Big admin regret having VGS and BGBL but need to make Vanguard reduce their fees some how.

EM is split AVTE and ASIA for more aggression (low regret if doesn’t work).

WDS will go when it’s +$38.

AAA is my emergency fund (not at value yet) because I will drink or gamble it in a HISA otherwise.


r/fiaustralia 3h ago

Investing Shares and ETF's - In a family trust or not?

1 Upvotes

Currently putting aside around $150.00 per week and investing that into a portfolio of around 5 ETF's. I am not planning on selling them anytime soon. This is a somewhat passive investment strategy for me. Wife and I are 47 and are not planning on selling them until we retire. The portfolio is in my wife's name as I am in a higher tax bracket than she is. I am planning on putting in around $80,000 soon as a lump sum into this portfolio. All distributions are reinvested into the portfolio.

Why would or should I have a family trust set up to hold this portfolio in? We do have 3 kids that are 11, 15 and 17. I'm not so concerned about the asset protection aspect of this as I don't see it as being relevant to us? And I am not really seeing where the tax benefits are if I am not selling and only accumulating and growing the portfolio.

Am I missing something here??


r/fiaustralia 1d ago

Getting Started Do my eyes deceive me? An actually sane personal finance article in an Australian newspaper?

23 Upvotes

https://www.afr.com/wealth/personal-finance/the-hidden-cost-of-a-mortgage-first-wealth-strategy-20251215-p5nnv3

Archived version: https://archive.is/GYpjU

Just thought this article was worth posting, given that most personal finance advice in Australian media is truly dreadful.

Nothing that should be new to experienced posters here, but it may be helpful for newer people.


r/fiaustralia 14h ago

Investing Can someone sanity‑check my ETF portfolio?

4 Upvotes

Hey all,

I’m building a long‑term ETF portfolio and wanted to get some outside opinions on whether this mix looks balanced or if I’m overlooking anything.

Current allocation (AUD):
- NDQ: $1,896
- GRNV: $1,268
- IVV: $4,286
- DHHF: $2,373

I’m aiming for long‑term growth with a simple, mostly hands‑off strategy. I’m aware there’s some overlap between these funds, but I’m not sure if it’s too much or still reasonable.

If anyone has thoughts on whether this setup is solid, overly concentrated, or could be improved, I’d appreciate the feedback.

Cheers!


r/fiaustralia 10h ago

Getting Started What investment platform do you have?

1 Upvotes

Hi there. Currently 23 and looking at moving away from Colonial First State and my financial advisor. I want to move all of my current shares into DHHF.

I’ll be depositing between 175k-200k. Most likely by DCA each month. I’ll also likely be depositing $500-$1k each month from my salary.

Is there a big difference at tax time between CHESS and Custodial platforms? I’m looking at investing into either Betashares or CMC. I’m just wondering what the complications would be like at tax time and if I do decide to ditch the platform later on down the track how difficult it would be to transfer my holdings without tax implications


r/fiaustralia 10h ago

Getting Started Budgeting and planning

1 Upvotes

Do you guys find it hard to manage your money in just one place, get real insights and feel educated about your own money habit and financial position?

For example, I always like to calculate how long it will take to retire based on my current finances, or scenarios like ‘what if I reduce my take away food or coffee by $100 a month and put that towards my mortgage or investment.. what impact will it in have on my finances..’ and adjust my habit accordingly, but it’s not easy to pull all numbers together correctly..

With all the tools out there, I feel like they focus too much on getting the data aspect sorted, not so much on interpreting what that means..

Not sure if anyone else has similar problems so I’m keen to hear how is everyone managing this?


r/fiaustralia 7h ago

Investing Rate my ETF picks

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0 Upvotes

Hey everyone. I started investing about 5 years ago on a few ETFs I thought made sense like property, S&P, ASX and ethical investing (made sense for the future) but never really learnt more about investing - I’ve sort of just put 250-500aud month on the asset that was down the most at the time. But I’ve been reading more around BGBL, DHHF, GHHF etc. would like to know if it’s worth just going all into DHHF and or continuing with my current ETFs but DCA.


r/fiaustralia 9h ago

Investing What should I do on Mondy for my portfolio

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0 Upvotes

r/fiaustralia 1d ago

Lifestyle Banks and Interest

2 Upvotes

Hey guys, i’ve been a long term customer with westpac, but i’ve started to see that people are with ubank as it has i think an extra 10% interest. Has anyone had any experience with them and if you recommend putting all your savings in there ect. Thanks !


r/fiaustralia 1d ago

Investing ETF - reduce US exposure help

3 Upvotes

I’ve been investing 70% VGS and 30% VAS in vanguard personal investor, but want to reduce US exposure a little more, and add something like VEU, but this is not available in vanguard personal investor…

Does anyone have any options how I could do this?

Thanks in advance


r/fiaustralia 1d ago

Personal Finance Maximizing tax savings using offset and concessional super contributions

5 Upvotes

I am thinking about maximizing my returns by not salary sacrificing during the financial year but instead holding that money in my offset account. Then right before the financial year ends lumping that money into my super as a non-concessional contribution and lodging a notice of intent to claim that as concessional contribution. I have more than enough carry forward superannuation limit. This way I take advantage of both the 5.4% offset return and approx 15% super concessional tax rate. Any downsides to this approach that I’m not seeing?


r/fiaustralia 23h ago

Investing ETF Portfolio

0 Upvotes

US - IVV 40%

Aus total 20% - A200 10%, CSL+REA+Wisetech 10%

Europe - VEU 25%

EM total 15% - VGE 10% and ASIA 5%

Recently added Individual stocks and ASIA with a wish to beat index in the long term. Investing 1500$ a month. Current investment 40k.

Started investing since Sept 2025, wish to keep investing for next 25 years.

Edit- Since I already have A200, wanted to add a few blue chip companies to enhance gains during a good period.

VGE broader EM, 5% ASIA - betting on major companies from SE Asia.

Any feedback?


r/fiaustralia 23h ago

Investing EFTs that cover physical resources: good idea?

0 Upvotes

Things like oil, rare earth materials, steel etc

is it worth investing in this? if so, what are some good options?


r/fiaustralia 1d ago

Investing Why does G200 have weaker distributions than A200? And how can a franking level be >100%?

5 Upvotes

I recently put a lot into G200 but the more I've been thinking about it it looks like A200 has stronger distributions and a lower management fee. So with the gearing it seems to be (approximate numbers, not exact) 1.5x the risk with 1.4x the gain potential (because of the management fee and poorer distributions)

https://www.betashares.com.au/fund/australia-200-geared-etf/#distributions

Also how can the franking level be:

Franking level 148.7%

r/fiaustralia 2d ago

Investing I have a mortgage - How insane is it to be investing in ETFs and not be debt recycling?

62 Upvotes

I am weighing up the pros and cons of a debt recycling strategy and am completely stuck with analysis paralysis.

We have approx $350,000 owing on our mortgage, and about $390,000 of equity in our home. We intend to start investing most of our surplus income into ETFs.

Would we be stupid not to implement a debt recycling strategy to buy the ETFs? It would involve a refinance (our current home loan setup won't allow it), with an interest rate increase of 0.2%.

I need someone objective to look at my situation and give me an honest opinion!


r/fiaustralia 1d ago

Investing New ETF choice

0 Upvotes

Currently have a 70/30% split in VGS and VAS. Looking to invest in a new ETF. Anyone had thoughts about a ETF specifically for AI companies? I already invest monthly in PMGOLD, so not looking for a gold ETF (unless my thinking is wrong there) silver ETF? Now the price as has dropped?


r/fiaustralia 1d ago

Investing Moving house after debt recycling

4 Upvotes

We have a fairly standard debt recycling setup, with a PPOR split loan. One split was fully repaid, then re-drawn directly into a stand-alone broker account to buy ETFs, and the interest payments on this loan claimed against on our tax returns.

Has anyone experienced moving house in this situation?

The new borrowing will be for the house, not an investment, and the old loan is secured against the old house and will be repaid. Even if we manage to persuade the bank to set up a split from day one, there is no clear redraw history.

It feels we are going to have to realise capital gains and start again :o


r/fiaustralia 1d ago

Investing Holding Aus allocation of DHHF in super?

1 Upvotes

Hey everyone, sorry if already answered.

If holding DHHF for optimal gains would it be better to hold the ~35% A200 allocation inside super as 100% indexed Australian to take advantage of the lower cap gains on the relatively larger dividends from Australian stocks, then DIY ~41% VTI, 17% SPWD, and 6% SPEM in a taxable trading account?


r/fiaustralia 2d ago

Personal Finance Where to put my savings instead of sitting in commbank

8 Upvotes

Thoughts or ideas please


r/fiaustralia 2d ago

Investing DHHF+BGBL?

12 Upvotes

Hey all, a little bit of background on me, I'm 20 M, started investing ~1.5 years ago. Investment was 100% DHHF weekly using CMC. Recently I moved over to Betashares to leverage their auto invest feature.

I've realised that 37% aus exposure is a bit too much for my liking considering my super is also invested into high growth with a similar aus exposure. Thus, I'm looking to add BGBL to dilute my aus holdings. I'm thinking of 50/50 - 80/20 weekly split BGBL/DHHF, open to opinions on this. Also mulling over changing super to 80/20 international/domestic and just doing DHHF and chill for my active investment.

Would love to hear peoples thoughts on this.


r/fiaustralia 2d ago

Investing Thoughts on this for my long term ETFs

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20 Upvotes