Aussie Firebug

Financial Independence Retire Early

Nothing written below is financial advice. The below questions and answers are for general information only and should not be taken as constituting professional advice. You should always do your own research when making any financial decisions.

 

Question


Hey mate,

Just quickly, Very close to finishing my finance degree and after learning so much about stocks over the past 8 months along with your blog and videos has opened my mind up to a whole new can of worms in terms of investing.

Firstly, I just wanted to say thanks for clearing a few things up with me that I was unsure about and secondly, I was wondering if you have like a template, like your net worth one, that you could send me. I’m looking at buying my first stocks at the end of the month (all my money is in a term deposit until then haha) and would like to use a template similar to yours to track my progress. No worries if you can’t just thought I’d ask.

Cheers

Riley

Firebug’s Answer


Hi Riley,

So glad you’re enjoying the blog mate 🙂

You can get my net worth sheet by filling out the below form and I’ll email it to you. I have removed all my personal details from it but you’ll get the picture.

Net Worth Sheet

Youtube video that explains how to use the net worth sheet.

-AFB

 

Question


My partner and I are currently paying an additional 50% onto our mortgage per month to get it down as fast as possible.

We are now looking into the option of buying an investment property. Is it better to keep paying down our mortgage at this rate or should we be putting that money into our offset for additional money for the deposit?

There seems to be a lot of information regarding first deposits and then allocating money to ETFs/shares but not a lot for second deposits. Any advice would be greatly appreciated!

Mary

 

Firebug’s Answer


Hi Mary,

I like to put down a minimum deposit of 20% to avoid paying LMI (Lenders Mortgage Insurance). Once this has been paid for investment properties though, I don’t like to pay any more off the loan. I dump all additional funds into the offset which gives me flexibility and easy access in case I need it.

The banks are currently making it harder though because they have jacked up the interest rate for I/O (interest only) loans and the difference between them and P/I (principal and interest) are becoming significant now.

If I were you, I would only put down a 20% deposit (to avoid LMI) and use the rest of my spare money to pay down the PPOR.

Why? Because your PPOR interest is not tax deductible but the investment properties loan interest is! I always want my loans to be backing an asset so I can claim it on tax.

Paying off your PPOR is what I would do.

-AFB

 

Question


Hello!

I’m a dual US/NZ citizen with no US savings and a small NZ superannuation. I now reside in Australia and am new to Australian superannuation. I am 51 and registering for the first time and seeking advice on preferred providers. It seems the FI community prefers Australian Super and Host Plus. Other suggestions, pros and cons? I started late and lost a significant amount of money when my late husband was ill, so focusing on intensive saving. I really enjoy your podcast and am excited to have found you.

Also, are there restrictions or considerations for me as a dual US/NZ citizen and Australian permanent resident when signing up for Self Wealth? I’m very keen to begin investing in EFTS/index funds.

Thank you,
Michelle

Firebug’s Answer


Hi Michelle,

Welcome to Australia! I’m sorry to hear about your late husband and financial losses. But as you’ve mentioned, it’s never too late to start! I’m definitely no expert in this area so I would like to preface this with not financial advice and also do your own research.

If I were you, I would find out the rule about when you are able to access your Super. Are you planning to retire in Australia and are you currently working right now?

If the answers to both of those questions are yes. I would look into salary sacrifices as much money up to the cap ($25,000) into Super because it offers the best tax advantages.

There are special rules for New Zealand citizens that you may allow you to transfer any Super between NZ and Aus. See this article HERE.

There’s Super for temporary residents leaving Australia also which you may want to look into.

Australia Super and Host Plus are great options. To be honest, I haven’t done a whole bunch of research in this area as Super for me is not going to help me retire early and I focus on strategies outside Super. But for your circumstances (nearing preservation age) I would be investigating Super options for sure. You can’t go too wrong for any industry Super Fund as long as the fees are kept to a minimum.

As for the SeflWealth part. Speak to the guys there (they are fantastic with support). I don’t know the answer to this specific query but they will!

I hope that helps

-AFB

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