Jump to content

Support Thread on Taking back financial control? (Barefoot Investor inspired)


  • Please log in to reply
450 replies to this topic

#26 4keykne

Posted 08 April 2017 - 09:09 AM

In regards to the super on the Hostplus and Australian Super Websites you can access the Chant plus comparison reports for around a 100 different funds. They are very comprehensive but the fees they listed for Hostplus were based on one of the more expensive options. Our switch from high fee fund to low fee will save $4k a year on the current balance, that is huge considering we have 30 years left in the workforce.

We have some shares were possible I reinvest the dividends as then I can have more shares without the cost of trading. There is a large variation in broking services prices so look around for the one that suits you best.

I am the process of selling down my managed share funds to change to investment bonds these offer tax advantage of no capital gains consideration if held for 10 years that would be my plan.

We also have education funds for the kids every Jan when my rather eye watering private school fee bill arrives it is nice just to send them the bill! I did not get roped into Australian scholarships fund the cost of that was high.

#27 IamzFeralz

Posted 08 April 2017 - 09:56 AM

View Postcordyline, on 08 April 2017 - 06:47 AM, said:

I'm with Australian super.

A lighthearted site that scores your fund as a Fat cat or Fit cat based on performance and fees.
https://www.stockspot.com.au/fatcat/

I'm about half way through barefoot investor book. Just last year I bought my first $10k of shares (at this stage it makes more financial sense to plug into our home loan but I really wanted to take the plunge and demystify the whole shares thing. I'm still a novice but now I'm less intimidated). Anybody purchased shares?

I'm with Australian Super too.  I have recently revamped my insurances through them as when I reviewed it, I was definitely underinsured according to the Barefoot book.  It doesn't seem to cost that much extra to increase it, to my surprise.

I plan to start investing in shares after my house purchase.  My own mother was a sole mother and her big strategy was to invest in managed funds from quite early on, using inheritance that my grandad started distributing to his kids before he died and it worked out very well for her.  She lives comfortably now in her 80s.

#28 zogee

Posted 08 April 2017 - 11:17 AM

I'm interested in this too :) I've been using YNAB for about 1 year and it's made a huge difference to knowing where our money goes. We've been cc debt free for almost a year. Next goal is to pay off the car loan and invest 2-3k in something like stock spot 'robo investing ' where they use an algorithm to maintain your investments according to how much growth you want.
I want my goals to be modest at this stage because we have lots of expenses with 2 kids, plus I've  just taken a small pay cut for a job that is more enjoyable.

#29 born.a.girl

Posted 08 April 2017 - 12:00 PM

View Post4keykne, on 08 April 2017 - 09:09 AM, said:


We have some shares were possible I reinvest the dividends as then I can have more shares without the cost of trading. There is a large variation in broking services prices so look around for the one that suits you best.

I am the process of selling down my managed share funds to change to investment bonds these offer tax advantage of no capital gains consideration if held for 10 years that would be my plan.



The investment bonds don't attract capital gains tax either way.  After ten years, the earnings are tax free.   Within the fund they're after tax anyway.  If you do cash them out within the ten years, the earnings that have been accruing are added to your taxable income, minus the 30% company tax that's already been paid on them.  Because it's not a capital gain, there's also no 50% discount. (There are concessions after about 8 years.)

One other thing you probably already know, keep your paperwork for all dividend reinvestments until they're sold.  My MIL threw out all of her info which went back beyond the years of the tax returns she had to keep.  It's been quite a job getting the information for her shares, some of it right back to the early nineties, in order to work out the CGT.

#30 Chicken Pie

Posted 08 April 2017 - 01:10 PM

To be honest I'm so scared in investing in shares I have no clue about any of it and I tend to avoid risk lol so any tips to get educated on that space would be awesome

#31 Chicken Pie

Posted 08 April 2017 - 01:12 PM

Also I have moved to hostplus and amended my life and god insurance although it wasn't too far off what it needed to be.

#32 born.a.girl

Posted 08 April 2017 - 02:45 PM

View PostPrincessPeanut, on 08 April 2017 - 01:10 PM, said:

To be honest I'm so scared in investing in shares I have no clue about any of it and I tend to avoid risk lol so any tips to get educated on that space would be awesome

That's most of us though.  I trained as an accountant, and although I knew the technicalities of risk and return, how to deal with it in the books, when it came to real life, I was clueless and suffered from inertia on the subject.

There's no end to the complexity of some types of investment, but they're not usually for the likes of most of us, who like to sleep at night.

Try the 'education' tab on the ASX site.
http://www.asx.com.au/index.htm#


They have heaps of short, online courses, free, which cover everything, or you can look at them as a PDF. They start from the absolute basics: 'what is a share'.

They also have a sharemarket game you could join before you dip your toe into the real market.

Good luck.

Edited by born.a.girl, 08 April 2017 - 02:46 PM.


#33 4keykne

Posted 08 April 2017 - 08:52 PM

Thanks born a girl a few years ago I went through the horror of selling shares which I had not kept the dividend statements for. A lesson learnt I now have a spread sheet and the electronic statements stored on two seperate computers.

Ah yes the not having to pay tax on my earnings is the reason I'm looking at the bonds. On my annual statements I get from the managed shares I get grumpy that I have "made money" which needs to be declared on Tax return yet the balance hasn't changed - I realise that this is due to shifts in the make up of the fund during the year but it doesn't feel like I made anything like the amount on the statement.

#34 happygoluckyinoz

Posted 10 April 2017 - 11:37 AM

The Chant website is very interesting. I'm currently with Kinetic Super which is an industry fund and does compare pretty well fee wise, although Australian Super is marginally cheaper on fees but then looks more expensive for insurance premiums. Also compared Hostplus and that came out much more expensive than Australian Super and Kinetic on fees but has had better returns. I think I'll read the barefoot book before making any changes to super.

DH was with AMP for a while and I checked the fees on that and they were horrific! So he is with Kinetic as well now.

I don't have any shares at the moment but have dabbled in the past, it's proved very lucrative - but sometimes feel like it is more luck than judgement! We need to sort out our finances properly before there is going to be any extra to go into a share fund.

Edited by happygoluckyinoz, 10 April 2017 - 11:45 AM.


#35 MarigoldMadge

Posted 10 April 2017 - 01:05 PM

View Posthappygoluckyinoz, on 04 April 2017 - 03:00 PM, said:

We have a car loan that we've just started to pay a bit extra off ($50, but will hope to build it up) and I've set up to start paying another $200 a month off the mortgage. We also owe my parents about $15k so we are slowing chipping away at that, anything that's left we try to send their way - probably not the most effective way as it's interest free and they aren't in a hurry for it back, but I don't like owing family.buffer.

I would have thought you would be better off pumping every spare cent into the car loan, and once that's paid off, then focus on the mortgage and family.

Thanks OP for the thread, great links and tips to follow!

#36 born.a.girl

Posted 10 April 2017 - 01:09 PM

View PostMarigoldMadge, on 10 April 2017 - 01:05 PM, said:

I would have thought you would be better off pumping every spare cent into the car loan, and once that's paid off, then focus on the mortgage and family.

Thanks OP for the thread, great links and tips to follow!


Agree.   The value you place on paying back an interest free loan from family is hard to put into cold hard figures, but the difference in interest between the car loan and the mortgage can be.

Pay off the car loan before putting any extra at all off the mortgage.

One proviso:  extra money you pay off the car loan cannot readily be accessed again (I'm assuming ...), whereas many home loans allow you to very readily access prepayments.

#37 happygoluckyinoz

Posted 10 April 2017 - 01:32 PM

Hmm ok interesting thoughts, you're probably right I just see the home loan as the one we need to get ahead on, but the car loan is a much higher interest rate.

I'll make the switch so we are overpaying $250 on the car loan and keeping the repayments the same on the home loan.

Still conflicted on the loan to my parents though... currently paying them back at $500 a month.

#38 MarigoldMadge

Posted 10 April 2017 - 01:41 PM

Assuming your home loan rate is @4% and your car loan is @10%, you are saving more than twice as much interest paying off car loan over home loan.

And re family loan, that's completely up to you - it's so much more than just dollars and cents - I'd probably pay family over saving money but that's because we have a legacy of ruined family relationships over money!

Edited by MarigoldMadge, 10 April 2017 - 01:45 PM.


#39 happygoluckyinoz

Posted 10 April 2017 - 01:49 PM

View PostMarigoldMadge, on 10 April 2017 - 01:41 PM, said:

Assuming your home loan rate is @4% and your car loan is @10%, you are saving more than twice as much interest paying off car loan over home loan.

And re family loan, that's completely up to you - it's so much more than just dollars and cents - I'd probably pay family over saving money but that's because we have a legacy of ruined family relationships over money!

Home loan is 4.21% and car loan is 6.45% so a bit of a saving there. The car loan min payment is $400 a month so upping that to $650 certainly helps.

My parents and I have a good relationship when it comes to money, as we've borrowed before and always repay. My brother on the otherhand not so much - they've always tried to be equal and lend to us all, but he never repays a cent!

#40 22Fruitmincepies

Posted 10 April 2017 - 02:17 PM

Happygolucky - maybe you could save the $500 you would give to your parents by putting it into an offset account, then give it to them in a lump sum once or twice a year. That way you are paying them back at the same rate overall, but having the benefit of the extra money sitting in your account. I don't really know the ins and outs of these things though, so I might be wrong.

DH bought the book last week, and it now making all sorts of changes as a result. I have promised to read it over easter. But I did groan at DH quizzing me about spending money at the shops yesterday - yes DH, DD does need winter clothes! We are actually in a very fortunate financial position, with only our mortgage to pay off, and no real need to budget our day to day expenses. DH wants to be in a position to invest more heavily (he used to dabble in shares before his work made that almost impossible).

#41 happygoluckyinoz

Posted 10 April 2017 - 02:50 PM

View Post22Fruitmincepies, on 10 April 2017 - 02:17 PM, said:

Happygolucky - maybe you could save the $500 you would give to your parents by putting it into an offset account, then give it to them in a lump sum once or twice a year. That way you are paying them back at the same rate overall, but having the benefit of the extra money sitting in your account. I don't really know the ins and outs of these things though, so I might be wrong.

That's a good idea actually. We have a few linked accounts to our offset, one for DS and one that we put 'household funds' into - so cover off the large expenses rather than paying for things monthly like Home Insurance, Car Insurance, Rates etc. So could create a new one for mum and dad, or just put it in the household one and try and remember how much is theirs!

#42 Overtherainbow

Posted 10 April 2017 - 03:25 PM

By saving the money in an offset, you are still making them wait and temptation is there to spend it.

My idea of snowball would be friends and family first then debts in order from lowest to highest by amount not interest.  

We have always paid family at the same interest as our mortgage rate.  It's important to me that they are not out of pocket financially either.

Listen to Dave Ramsey on gazelle intensity and apply that to all bad debt (credit cards, holiday loans) and necessary debt (car loans).  When you get to paying off mortgage, investment loans and student loans, I feel we can have more balance as gazelle intensity is short term.

Also look at how to avoid it in the future.  Have your mojo or emergency fund set aside and be working towards one month living expenses saved and then two and so on.

We did the gazelle intensity for a year and ditched all bad and necessary debt.  An amazing opportunity presented itself and we were able to say yes because of the improvement we had made to our finances.

Our income has dropped in the past year, some of our expenses have grown but we are still making headway on our loan from what we've learnt.

Listen to Dave Ramsey podcasts as a motivator.  He is Christian so does include giving to the church, personally I believe we should be helping out those with less than us, so you can apply the giving to the charities you believe in: health, homeless, developing nations, etc.

#43 Lees75

Posted 11 April 2017 - 11:34 PM

I am about half way through the book and am loving it!  I am a YNAB-er, although I fell of the wagon around Christmas. I think a combination of Barefoot and YNAB will be perfect for me.  I am not going to open the specific accounts he mentions, as I have zero transaction fees though my current BankWest accounts, and already have too many accounts to manage between my business and personal. But I have used YNAB to set up the "accounts."  I did open a separate Mojo account, though.

I found the book quite challenging and relevant to me, where he dealt with excuses. So many I have used the single mum one income excuse. I also liked where he said it might take 5-6 years to get on top of things, but think of how quickly 6 years generally goes.

So I am going to see if we can live off the 60% - not sure how it will go, but I'll try. The fire extinguisher account will be used to pay off my ATO and CC debt. I will still just pay off the minimum to ATO, as the interest is minimal and then put everything else in the "fire extinguisher account" on to the credit card debt.

I showed the 13 year old how I have set it up, and he wants to do something similar, as he is getting $40/week for football umpiring, sometimes $80.

#44 4keykne

Posted 26 April 2017 - 10:26 AM

We are almost through the process of changing super. I can see why some funds can charge huge fees and people stay with them, it is quite and involves process to get it sorted properly.

Lees75 my 11 yr old has just had a birthday and I used the three money boxes with him to make sure he used his birthday money wisely. Win win as then I have less plastic toys that seemed like a good idea at the time hanging around too😀

#45 happygoluckyinoz

Posted 26 April 2017 - 10:51 AM

So I've just got into the 'grow' section of the book - I'm finding it such a good read and the simple steps are just so helpful!

So I've opened up the ING accounts he suggested and working towards switching all our direct debits over now. I don't have $2k in Mojo yet, but hopefully will get there over the next couple of months. We normally spend everything on a credit card and pay it off at the end of the month, so it will take us a month or two to wean back into cash accounts and get rid of the credit card completely.

I know he says to have mojo in a separate institution, but I think we'll keep that as an offset account, as once we've moved everything out of there we wouldn't use it anyway and don't have cards for it.

Working with our pay will also help - I've kept a monthly budget for years when we get paid fortnightly, which always means we run out of money towards the end of the month, if we try and switch everything to fortnightly then we might actually manage to live off the 'splurge' account.

Super funds I think we are going to stay where we are as we are in a growth fund, from my understanding switching to Hostplus means we'd be in a balanced fund whereas he said if you're under 45 you should be in a growth one? The growth one with Hostplus is more expensive than the Kinetic one we have now. I am going to change my life insurance and IP etc though as think we are over-insured there.

The Insurances chapter was a real eye opener!! What he said made so much sense... when i worked it out we are paying over $600 a month just in insurance, which is crazy. So going to up the excesses on our policies and remove some of the personal item cover we have on our home insurance (iphones, ipads, rings & watches) and also remove extras and just have hospital only cover.

Using the 20% fire extinguisher account to pay off debt will see our car loan disappear by the end of the year (crazy considering we still have 5 years left!) and then we'll pay my parents back and they should be gone in a few months after, so in a year we'll be debt free (ignoring the mortgage). Feels like we've just found a whole heap of cash!

#46 Chicken Pie

Posted 27 April 2017 - 10:27 AM

happygoluckyinoz - its an awesome read isn't it? Though I want to get a hardcopy as well...

I finished switching over debit orders etc to ING, I have ME account for when I can afford to build a good mojo - though for now, my focus is paying off my debt in big chunks and get it over with - if I can be good I can do cc's and loan by end of the year leaving our shared car (at 4.2% and was a have to purchase).

#47 happygoluckyinoz

Posted 27 April 2017 - 10:41 AM

Started on the insurances yesterday, got a refund of $278 on our home insurance by upping the excess and taking off personal items cover. Brought the premium down from $1,198 a year to $845.

Phoned the health insurance, removing extras saves us $780 a year. DH wants to get rid of it completely, I'm still nervous about doing that! Saves us $3,300 a year, but it's committing to having baby number 2 public and removing that safety net of private hospital.....

#48 Chicken Pie

Posted 27 April 2017 - 10:51 AM

Yeah with us removing hospital isn't an option as we will pay the surcharge as a result...extras I'm not sure about yet - I have weak teeth and dd is 8 so don't know what her teeth will do, plus I need specs and lenses.

I have actually downloaded our claims statements for past 3 years to compare cost versus what we get back versus what we pay for the extras cover to see if it balances out - would need to put it in savings account through and use as required and some years will be quieter than others.

good idea I'm gonna review our insurance we have too!!! it all adds up at the end of the day.

also dd has a commbank account due to school banking, her friends do it and it gets her saving, but going to do the jars which is visual and there and will transition to stopping school banking - challenge is others do it, it is all schools have "on offer" etc

#49 happygoluckyinoz

Posted 27 April 2017 - 11:01 AM

We don't earn over the threshold for the medicare surcharge so it does sort of make sense not to have it, although DH is hoping a promotion is coming his way towards the end of the year which would then push us over it. I don't want to cancel and then have to go and get it again anyway and we might be slugged with waiting lists and the lifetime levy as we are over 31.

Going to compare different policies and see if we can make more of an improvement on saving just the $780 a year and keep hospital cover. I'm also going to order some contact lenses today to make use of that extra whilst I still have it!

#50 foom

Posted 27 April 2017 - 01:45 PM

View PostPrincessPeanut, on 27 April 2017 - 10:51 AM, said:

also dd has a commbank account due to school banking, her friends do it and it gets her saving, but going to do the jars which is visual and there and will transition to stopping school banking - challenge is others do it, it is all schools have "on offer" etc

I choose not to do the school banking. We set up DS with a children's bank account at Suncorp - they had the best deal on at the time. He gets a statement mailed to him, just like Mum & Dad. He has his own folder for statements, just like Mum & Dad's folders. When he deposits money he goes up to the teller himself (with me hovering ready to help if there is an issue). So he sees it as banking the "grown up way". We go through the statement with him and show him how much extra interest he got for putting money in that month. Would that angle appeal to your daughter?




0 user(s) are reading this topic

0 members, 0 guests, 0 anonymous users

 

'My parenting style is Survivalist'

A helicopter or tiger mum, I am not.

8 mums reveal their favourite nappy bags

We asked a bunch of mums which nappy bags they love the most.

Why you shouldn't bother throwing a big first birthday party

If you're feeling the pressure to host an all-out, over-the-top shindig for your baby's birthday, I hereby grant you permission to throw the rules out the window.

The 24 baby names on the verge of extinction this year

If you're on the hunt for the perfect baby name and don't want a chart-topper like Oliver or Olivia, then do we have the list for you.

'My mum doesn't seem that interested in my baby'

Q: My mother and I have always been close, but now that I have a baby, she has not helped out as much as I thought she would.

New guidelines: "Bottle-feeding mums need support too"

Breast is best, but mums who can't, or choose not to breastfeed need support too.

Dads also struggle to 'have it all', study finds

Men and women both experience work-family conflict.

Language development may start in the womb

Study found babies can recognise foreign languages before birth.

Meet the baby born from an embryo frozen for 24 years

Experts say little Emma is a record breaking baby.

 
Advertisement
 
Advertisement
 
 
 

From our network

Five things you need to know about flu and pregnancy

As the 2017 flu season begins in earnest, here?s what you need to know to protect yourself and baby.

Mum tips to keep your pre-baby budget in check

Money might be funny in a rich man's world (or so ABBA told us), but for the rest of us it's a major consideration – particularly before having a baby.

5 easy ways to make your maternity leave last longer

Maternity leave is a special time for you, your partner and your new little bundle. The last thing you want is for financial worries to stand in the way of that joy.

10 ways to keep your 'buying for baby' costs down

Becoming a parent is full of surprises – not least of all finding out that, for such small beings, babies cause a lot of chaos and expense.

5 ways to prepare to go from two incomes to one

Here are some ideas for getting that budget in shape, ready for being a one income family.

 

Baby Names

Need some ideas?

See what names are trending this year.

 
Advertisement
 
 
Essential Baby and Essential Kids is the place to find parenting information and parenting support relating to conception, pregnancy, birth, babies, toddlers, kids, maternity, family budgeting, family travel, nutrition and wellbeing, family entertainment, kids entertainment, tips for the family home, child-friendly recipes and parenting. Try our pregnancy due date calculator to determine your due date, or our ovulation calculator to predict ovulation and your fertile period. Our pregnancy week by week guide shows your baby's stages of development. Access our very active mum's discussion groups in the Essential Baby forums or the Essential Kids forums to talk to mums about conception, pregnancy, birth, babies, toddlers, kids and parenting lifestyle. Essential Baby also offers a baby names database of more than 22,000 baby names, popular baby names, boys' names, girls' names and baby names advice in our baby names forum. Essential Kids features a range of free printable worksheets for kids from preschool years through to primary school years. For the latest baby clothes, maternity clothes, maternity accessories, toddler products, kids toys and kids clothing, breastfeeding and other parenting resources, check out Essential Baby and Essential Kids.