New guy on the block

[SHARE]

Hi all,

Completely new to investing so I thought I would throw my situation out there and see what some more seasoned investors think – and hopefully point me in the right direction where I can learn more.

Disclaimer: I will definitely be getting professional legal and financial advice soon – I am just stuck on a boat with a slower than dial up connection right now.

I’ll start off by giving my financial situation, then my goals and see where this goes.

Situation:
Engaged
Age: 28 & 28
Salary: $95k & $62k ($157k before tax)
Assets: 1 property, $375k value with $120k equity. $340/wk mortgage with $25yrs remaining
Savings: $10k cash
Kiwisaver: $3k & $2k (just withdrew all to purchase home) both contributing 3% on high growth
No children but planning to from 2018
Spend months away from home for work every year so don’t have the time to manage my own investments (would prefer managed investments)

Goals:
Attain a $100k/year passive income and mortgage free home by age 50

Current thought process:
Pay down mortgage as fast as possible
Purchase second property in next two years (or sooner if LVR restrictions are removed)
Purchase one property every two years
Sign on to a managed fund for medium to long term investing (contributing a minimum of $200 month)
Continue to increase my salary each year

I am really interested in knowing how I should go about this; whether I should start considering a LTC for the tax breaks in property (or even a company PIR is 0%?), is there any advantage to investing in shares through an LTC rather than without? What would you do if you were in my situation?

Thanks in advance, and yes I know, I will get some financial advice!!!

[Harvey Specter]

Sounds like a fine plan. You are on a sharetrading forum which doesn't appear to be the way you want to go so not sure how much useful advice you will get from us.

You seem to be going down the property path rather than share investments. given you dont have time to manage, I assume you will also have a property manager?

Re your share investing, just go through a low cost index fund to minimise fees unless you want to pick an investment manager you hope will be better than the rest.

[Snow Leopard]

...
No children but planning to from 2018
...

Go with no children for life and you will have a lot more money to invest.

Best Wishes
Paper Tiger

[RGR367]

As your goal is doable and circumstances almost similar and basically almost the same question that was already asked, I'll let your journey start by asking you to read on everything you can on the newbie thread. Seek and you shall find. GL 2 U.

[Bjauck]

It is great that you have discipline and commitment to get to where you are at your age with the basis of a long-term plan, yet to be refined with professional.

...
Purchase second property in next two years (or sooner if LVR restrictions are removed)
Purchase one property every two years...

The above ambitions are revealing. For so many NZers, when they are in a position to be able to invest, their gut instinct is to leverage themselves into investment residential real estate. The consequence of this is the most unaffordable housing in the IMF and other would-be-owner-occupiers being increasingly priced out of the market - a big shame for social stability in general, given uncertain security of tenure for tenants. It would be great that when two houses are already owned, further real estate investment had to be in building new houses. This is not a direct criticism of yourselves but of the NZ tax system and investment environment.

However this a forum for shares. If you want to churn your money into real estate "every two years" then it does not leave much time or excess money for investment in shares. Depending on the riskiness of the managed fund, they normally suggest an investment timespan longer than several years as annual investment returns can vary wildly. If you are needing to remove your investment funds so frequently then term deposits may be more appropriate. Good luck to you if you are able to achieve such an ambitious property (real estate) buying ambition in addition to a substantial investment in equities. Definitely get professional advice.