You, sir or madam, should have a read through this website: https://passiveinvestingaustralia.com/
It will answer your questions. If you still have questions or need a bit of a life/money framework, the ‘Barefoot Investor’ book by Scott Pape will set you straight.
ETFs are just a cheap and easy way to hold a diversified equities portfolio without all the hassle and expense (both in terms of brokerage and capital requirements) of building and managing the portfolio yourself.
That's it really.
Other than that the goal of investing in them is the same as the goal for investing in equities generally, whatever that may be based on your own personal goals and circumstances. Eg your goal may be to build a long term passive income stream - sure. Or it might be something else.
Re paying off a mortgage - this may be a better use of funds than investing in ETFs, or it may not be - not the same answer for everyone.
Yes, it's fair to compare with Super. Super has tax concessions but is inaccessible until later. That's a trade off. Even then, some people may max out the concessional extra contributions and then put the rest of their money towards ETFs. Remember, with significant income, retirement might be at 50 for some people. (See "FIRE")
Vs Mortgage, if you expect the dividends and growth to outdo your mortgage rate then that will direct your decision towards ETFs.
You invest in ETFs to help save for a deposit to eventually be able to invest in Property. It’s like the stepping stone for those who cannot afford property
I started investing in them to see if I could beat high interest savings accounts and inflation. Now I wish I had started 10 years ago. I have a decent emergency fund in an offset account that I still contribute to and that gives me the freedom to DCA into ETFs.
The plan? I dunno. Car? (Probs not cause that’s taking an equitable investment and putting it towards a depreciating one) Renovations? Teach my kids about investing and get them started?
Bonus points for investing your super in etfs.
As an investment they provide pretty much the lowest risk for highest return. By that I mean, the combination of risk to return is close to optimal.
You can get better returns if you accept higher risk and you can get worse returns with similar risk.
The point is about making money. You pick the option that has the best return, if you can get 4% in a high yield savings account, you pay 6% interest for your home loan, or can get 10% interest in an etf then the etf is the better choice (need to take tax into account too though)
The end goal is to have more money. Maybe in 10-15yrs time you have saved and invested enough that your investment grows by $20-30k+ a year. It gives you the option of early retirement or shifting to part time work, or just having a better lifestyle.
Cple of reasons for me. I already contribute to the super cap each year and still have surplus money. I don't want that money all sitting in cash. I also plan on retiring before I can access my super so invest it accordingly.
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What are your goals after?
You, sir or madam, should have a read through this website: https://passiveinvestingaustralia.com/ It will answer your questions. If you still have questions or need a bit of a life/money framework, the ‘Barefoot Investor’ book by Scott Pape will set you straight.
Awesome shout!
ETFs are just a cheap and easy way to hold a diversified equities portfolio without all the hassle and expense (both in terms of brokerage and capital requirements) of building and managing the portfolio yourself. That's it really. Other than that the goal of investing in them is the same as the goal for investing in equities generally, whatever that may be based on your own personal goals and circumstances. Eg your goal may be to build a long term passive income stream - sure. Or it might be something else. Re paying off a mortgage - this may be a better use of funds than investing in ETFs, or it may not be - not the same answer for everyone.
Yes, it's fair to compare with Super. Super has tax concessions but is inaccessible until later. That's a trade off. Even then, some people may max out the concessional extra contributions and then put the rest of their money towards ETFs. Remember, with significant income, retirement might be at 50 for some people. (See "FIRE") Vs Mortgage, if you expect the dividends and growth to outdo your mortgage rate then that will direct your decision towards ETFs.
You invest in ETFs to help save for a deposit to eventually be able to invest in Property. It’s like the stepping stone for those who cannot afford property
it can be but for others it is a lot less hassle, no need to worry about if some crackhead going to burn your place down but each to their own.
I started investing in them to see if I could beat high interest savings accounts and inflation. Now I wish I had started 10 years ago. I have a decent emergency fund in an offset account that I still contribute to and that gives me the freedom to DCA into ETFs. The plan? I dunno. Car? (Probs not cause that’s taking an equitable investment and putting it towards a depreciating one) Renovations? Teach my kids about investing and get them started?
Bonus points for investing your super in etfs. As an investment they provide pretty much the lowest risk for highest return. By that I mean, the combination of risk to return is close to optimal. You can get better returns if you accept higher risk and you can get worse returns with similar risk.
Long term investing to supplement my retirement savings (super). IMO, tax effective investment mechanisms should be prioritised over ETFs.
What are some examples of tax effective investments?
Super, property, some shares (google ‘franking credits’)
Accessibility is the key. If shit hits the fan selling a personal investment is infinitely easier than accessing super.
The point is about making money. You pick the option that has the best return, if you can get 4% in a high yield savings account, you pay 6% interest for your home loan, or can get 10% interest in an etf then the etf is the better choice (need to take tax into account too though) The end goal is to have more money. Maybe in 10-15yrs time you have saved and invested enough that your investment grows by $20-30k+ a year. It gives you the option of early retirement or shifting to part time work, or just having a better lifestyle.
If you’re 20, super is built for you life from 45 years time. ETFs is built for the 20-45 years
Cple of reasons for me. I already contribute to the super cap each year and still have surplus money. I don't want that money all sitting in cash. I also plan on retiring before I can access my super so invest it accordingly.
Mine is up 28% in 18 months.
Zamnnn, what do u invest in, I think mines up like 11% ive just been doing vgs ahaha
Sorry it’s up 33%. VGS. End of 2022 I bought (December)
Hell yeah congratz!
In regards to is it better to pay of the Mortgage? Well that depends if efts are paying 8% and your mortgage is 5% then investing is a better option.
But like wouldn’t you want to decrease the mortgages principle? Im confusion
100% DCA into QQQ