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"Mighty oaks from little acorns grow."
Millions is mostly talk or noise.
Same disciplines required no matter the size of your holdings.
My broker once told me most of their clients had less than $50,000 portfolios.
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The ability for NZ companies to use imputation credits makes dividends much more attractive here than in most other countries. For those who are retired, dividends have the benefit of reducing the psychological pain of having to sell your holdings to survive. Also, for many, where they want to live has many inputs which are far more important than how much tax they will pay on their share holdings.
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Originally Posted by percy
"Mighty oaks from little acorns grow."
Millions is mostly talk or noise.
Same disciplines required no matter the size of your holdings.
My broker once told me most of their clients had less than $50,000 portfolios.
Yes we all started small. But as your investments become big any dividend is welcome and that's how you eventually get "free shares". And when you've been investing for more than 10 years and got more winners than losers then surely your portfolio should be at least at a mid 7 digit figure. Otherwise I'd say, you've never really learned the Market. As a beginner then, the one thing I struggled hard is how to save enough so I can buy more of the stocks I was trying to accumulate. Margin Lending solved that issue for me.
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Originally Posted by RGR367
Yes we all started small. But as your investments become big any dividend is welcome and that's how you eventually get "free shares". And when you've been investing for more than 10 years and got more winners than losers then surely your portfolio should be at least at a mid 7 digit figure. Otherwise I'd say, you've never really learned the Market. As a beginner then, the one thing I struggled hard is how to save enough so I can buy more of the stocks I was trying to accumulate. Margin Lending solved that issue for me.
Your performance is measured in your percentage return not the absolute size of your portfolio.
Different investors/traders have their own individual circumstances which set the limits on available funds to invest and also there own criteria for the risks they are willing to take.
If you achieve an average return of 10% pa in the long term, you are doing OK.
As a footnote $12,345.67 is a 7 digit figure.
Unity in diversity.
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Member
Originally Posted by RGR367
Yes we all started small. But as your investments become big any dividend is welcome and that's how you eventually get "free shares". And when you've been investing for more than 10 years and got more winners than losers then surely your portfolio should be at least at a mid 7 digit figure. Otherwise I'd say, you've never really learned the Market. As a beginner then, the one thing I struggled hard is how to save enough so I can buy more of the stocks I was trying to accumulate. Margin Lending solved that issue for me.
Current Principal: $10,000
Annual Addition:$10,000
Years to grow: 10
Compound Interest Rate: 65%
Future Value: $5,200,000
Good luck with your 65% return every year
Last edited by Brovendell; 16-01-2020 at 03:47 PM.
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Congratulations to those of us who've been invested in the NZ sharemarket these several last years since the GFC. Remember though, that these have been exceptional years with exceptional returns and that we can't expect the good times to continue indefinitely.
Sorry for the reality check.
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Originally Posted by Brovendell
Current Principal: $10,000
Annual Addition:$10,000
Years to grow: 10
Compound Interest Rate: 65%
Future Value: $5,200,000
Good luck with your 65% return every year
I said at least mid 7 digit figure so you've just made the grade and I'm happy for you too. But imagine if you were not constrained by not just having $10K as your additional annual investment money. Wouldn't it be nicer
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Originally Posted by macduffy
Congratulations to those of us who've been invested in the NZ sharemarket these several last years since the GFC. Remember though, that these have been exceptional years with exceptional returns and that we can't expect the good times to continue indefinitely.
Sorry for the reality check.
Congratulations to those that invested in the US market post GFC because they would of gain tremendous on the NZD/USD exchange rate.
Originally Posted by mfd
The ability for NZ companies to use imputation credits makes dividends much more attractive here than in most other countries. For those who are retired, dividends have the benefit of reducing the psychological pain of having to sell your holdings to survive. Also, for many, where they want to live has many inputs which are far more important than how much tax they will pay on their share holdings.
In another thread in this forum, I explained the level of imputation credit is a joke because very few listed shares are fully 100% credited. Go across to the ASX and there's virtually none which therefore, the holdings will fall under FIF. Many of the ASX listings require a 'franking' account to be eligible if i'm not mistaken.
As comparing to other countries, tax is everything. Especially in places like Canada where the SMALL investor can invest 100% tax free. For eg. RRSP, RESP, & RDSP offer the ability for the holdings to be sold 100% tax free. All these 'registered' accounts compound returns year after year tax free. RESP (education savings plan) the Cdn gov't matches contribution amounts and when the person is ready for uni education, they can sell the portfolio 100% tax free without having to repay the matching grants. Likewise with RDSP (disability savings plan). And then you have the TFSA (Tax Free Savings Account) where every Cdn resident over 18 can invest $6K (current contribution limit) per year (and the contribution amounts you miss in the pass can be added towards future years) ; ALL gains including dividends are 100% tax free. The USA has similar programs for investment that allow the small investor to be 100% tax free. But for the most compelling benefit for the investor in Canada (and likewise in the US), is they can structure their tax at retirement age to be at the low end of the income by selling the shares when they want to. As I explained before, in NZ you don't have any distinction on tax paid on shareholder income if the person is over $100K salary / wage income or $20K /year, because the income / gains from share investments can not be controlled ; much like dividends, when the board issues dividends it's beyond the control of the shareholder that may be stuck at the high end of the tax bracket. In NZ, the whole idea of deferring tax is alien like to the accountants I speak to but the reasons are clear. Who would not want to pay tax at a lower rate on their investments at a future date when their working income can be low or zero at retirement?
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Many NZ companies fully impute their dividends, generally those who do most of their business in NZ. This does not have anything to do with FiF classification - most decent sized Australian companies are excluded from FiF. There is a list somewhere on the IRD website I believe.
If my dividends are fully imputed, I as a high rate tax payer pay an extra 5% compared to the company retaining the earnings. Not so bad. Even better for those on lower tax brackets who can claim the imputation credits back.
Agree some countries have more generous tax exemption, but this is not a deciding factor for me choosing where to live so it's barely relevant to me.
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