Hi Everyone,
I am starting this thread as a follow on from the Very High Yield Share thread.
I have been looking into shares and have purchased three over the last several years. For what its worth I know I have been very lucky with these up until now - the shares are CBA, AGL and WOW.
CBA was purchased in a slump about 7 or so years a go and was a hands on balls and squeeze decision that worked out ok.
AGL and WOW I purchased more recently.....AGL is up a bit and WOW is the most recent and probably most risky...it is down almost a dollar as of today.
I am buying shares as a way out of property and into an easier income stream....I will keep 2 properties as a sort of bond type investment...although I have been told AGL is like a bond as well ie it won't set the world on fire (well it might as its a volatile gas) but will most likely always be there.
The properties are both well located one is about 7 km from and the other 10km. They are just old 3 bedroom houses that produce about 2% return.
I read up on The Boglehead strategy of 3 index funds...one fund in Bonds, one in local shares and one in international shares...or rather a representative index of these markets. Vanguard is the recommended provider of the ETF's used to implement this strategy.
This what I found.
- Vanguard has an Australian Bond ETF....as of this year it produces something like 2 to 2.5%. No better than a rental property....so I am keeping some rentals and AGL shares as bond substitutes.
- Vanguard has an Australian share ETF that represents the top 300 ASX companies. If I had known this earlier I wouldn't have purchased the AGL and WOW shares...but whats done is done and I am going to keep them. The dividends are good and fully franked.
The ETF is called VAS and I will be putting into this when the time comes. It returns over 5% with the advantage of franking to some extent. The franking varies but works out to well over 50% over the course of a year. So much better than property for my money.
-Vanguard has several US and international ETF's. I have settled on one which covers the world and returns a tad over 2% - VGS its about 60% USA shares. The other contender was the USA only shares but there is some hassle with USA withholding tax that I cant be bothered with so I am going with VGS (unhedged). This one I feel is the unknown to me as its a big world and the unknown brings fear and the possibility of risk. the upside is that has potential to grow (it may also shrink).
The breakdown for the total shares for me will work out at 33% individual Aust shares (AGL, CBA and WOW) ,33% VAS and 33% VGS.
My buy in price for VAS is less than it is today so if I was to buy it would be during the next slump. VGS doesn't seem to move nearly as much as VAS , its also a fairly new ETF, but if I had to buy today I would buy into this one.
So there it is.....my attempt to convert houses into shares.
I know others are in this position as well and like me not overly familiar with more than the basic share mix of 4 banks, 2 supermarkets and a phone company....funny thing is that VAS is mostly just that so it will probably turn out well.
Nearly forgot to mention...I am a buy and pray buyer. That is I wont ever sell these and don't want the hassle of watching over these things daily or even monthly. That's why I am going into it. The houses have worn me out....made a lot of money but still....now's the time for easing off and enjoying life a bit more.
I am hoping we can share knowledge and experiences on this as it is a new to me anyway way of going about things.
Cheers
GW
I am starting this thread as a follow on from the Very High Yield Share thread.
I have been looking into shares and have purchased three over the last several years. For what its worth I know I have been very lucky with these up until now - the shares are CBA, AGL and WOW.
CBA was purchased in a slump about 7 or so years a go and was a hands on balls and squeeze decision that worked out ok.
AGL and WOW I purchased more recently.....AGL is up a bit and WOW is the most recent and probably most risky...it is down almost a dollar as of today.
I am buying shares as a way out of property and into an easier income stream....I will keep 2 properties as a sort of bond type investment...although I have been told AGL is like a bond as well ie it won't set the world on fire (well it might as its a volatile gas) but will most likely always be there.
The properties are both well located one is about 7 km from and the other 10km. They are just old 3 bedroom houses that produce about 2% return.
I read up on The Boglehead strategy of 3 index funds...one fund in Bonds, one in local shares and one in international shares...or rather a representative index of these markets. Vanguard is the recommended provider of the ETF's used to implement this strategy.
This what I found.
- Vanguard has an Australian Bond ETF....as of this year it produces something like 2 to 2.5%. No better than a rental property....so I am keeping some rentals and AGL shares as bond substitutes.
- Vanguard has an Australian share ETF that represents the top 300 ASX companies. If I had known this earlier I wouldn't have purchased the AGL and WOW shares...but whats done is done and I am going to keep them. The dividends are good and fully franked.
The ETF is called VAS and I will be putting into this when the time comes. It returns over 5% with the advantage of franking to some extent. The franking varies but works out to well over 50% over the course of a year. So much better than property for my money.
-Vanguard has several US and international ETF's. I have settled on one which covers the world and returns a tad over 2% - VGS its about 60% USA shares. The other contender was the USA only shares but there is some hassle with USA withholding tax that I cant be bothered with so I am going with VGS (unhedged). This one I feel is the unknown to me as its a big world and the unknown brings fear and the possibility of risk. the upside is that has potential to grow (it may also shrink).
The breakdown for the total shares for me will work out at 33% individual Aust shares (AGL, CBA and WOW) ,33% VAS and 33% VGS.
My buy in price for VAS is less than it is today so if I was to buy it would be during the next slump. VGS doesn't seem to move nearly as much as VAS , its also a fairly new ETF, but if I had to buy today I would buy into this one.
So there it is.....my attempt to convert houses into shares.
I know others are in this position as well and like me not overly familiar with more than the basic share mix of 4 banks, 2 supermarkets and a phone company....funny thing is that VAS is mostly just that so it will probably turn out well.
Nearly forgot to mention...I am a buy and pray buyer. That is I wont ever sell these and don't want the hassle of watching over these things daily or even monthly. That's why I am going into it. The houses have worn me out....made a lot of money but still....now's the time for easing off and enjoying life a bit more.
I am hoping we can share knowledge and experiences on this as it is a new to me anyway way of going about things.
Cheers
GW
