Boglehead/Vanguard way to retire

redwing said:
What were you hoping to gain from investing into the stockmarket MTR?
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MTR said:
6% fully franked set and forget
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I expect 9% total return (don't care ratio of CG / Income). I am good enough to manage that aspect. The beauty of shares is I can sell shares to generate income as long as the total overall returns are maintained over the long term.

Don't think there is any other asset class other than broad market based ETF that is passive (set and forget) and returns that are satisfactory over long term > 30-40 years plus.

Both Australian and US markets have returned > 9% in the past over the long term even after you consider how much the World has gone through during that time. There is no reason to doubt the respectable returns from these markets will not continue in the future as well.

Cheers,
Oracle.
 
MTR said:
6% fully franked set and forget
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Haven't looked closely, but maybe check out companies like

FMG, Woodside, Wesfarmers, Westpac, National Australia Bank, Insurance Australia Group, Suncorp. :confused:

Who knows where the share price will go though, especially short term

<edit - I should add, the above strategy is all totally against the intent of this thread>
 
You get your 6% FF through long term share price growth and the rising dividend stream that comes with it. The concepts are not that hard to grasp. Short termism will rob you long term. There is no free 6% FF (8.6% grossed up) yield with rock solid capital protection and long term asset price appreciation without some downside risk over the short-medium term. If you aren't comfortable with this, don't buy stocks. This is why I always harp on about education and working out if you are comfortable before buying stocks.
 
But with property investing and developing you get additional leverage on your capital, how does property tie into the strategy seeing as we are all property investors?
 
Interesting discussion. If high yield and security is your aim then why wouldn't you target high yield REITs in either Aust or the US (though you'd be a bit late now to take advantage of the exchange rate :)). For example SNH is yielding about 7%.

Here's an interesting read that shows the benefits of high dividend compared to high growth dividends.

http://m.seekingalpha.com/article/2810585
 
WASP said:
But with property investing and developing you get additional leverage on your capital, how does property tie into the strategy seeing as we are all property investors?
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A debt recycling strategy could be employed.

Say you have a spare $10k you could use this to pay down your PPOR loan, reborrow it (ideally separate split), buy shares such as VAS, get dividends and use these dividends to pay off the PPOR debt even further. Interest on loan will be deductible too. Wait for a bit of capital growth, sell and use proceeds to pay off PPOR loan. Then borrow to buy more shares and repeat - perhaps buying at a lower price than you sold too.

This should speed up the payment of the non deductible PPOR debt.
 
MTR said:
6% fully franked set and forget
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Plenty of rock solid companies offered such yields during the lows of GFC. Do you recollect your views on sharemarket during that time?

Market will surely offer these kind of yields again in future. The question is when it does will you be ready to act, or will you think sharemarket is risky place to invest?

Cheers,
Oracle.
 
I'm looking at putting, say, $5k into VAS per year but I actually prefer to split that up into $400 lots per month which is what I currently do with my managed funds for dollar cost averaging.

Paying brokerage each time means it doesn't work out so well to dollar cost average into an ETF.

Just wondering, do VAS ever do DRPs (div reinvestment plans)?
 
Tess the brokerage will kill you, you can get the managed fund version albeit with a higher fee and BPAY small amounts without incurring any brokerage.
 
equitymate said:
Tess the brokerage will kill you
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+1

'A random walk down wall street' was my favourite stocks focused book, but they all (Bogleheads/Buffet/Malkiel etc.) basically say exactly the same thing for the average investor...

  1. Low cost funds are imperative (high fee/actively managed funds are killer)
  2. Buy the indexes (best risk to dollars spent ratio, beats 95%+ of managed funds over time)
  3. Diversify (both within your country, and outside your country)
  4. Taper risk exposure as you near retirement
  5. Dollar cost averaging

However I've decided to go down the path of property investing to use leveraging to my advantage.
 
tess85 said:
I'm looking at putting, say, $5k into VAS per year but I actually prefer to split that up into $400 lots per month which is what I currently do with my managed funds for dollar cost averaging.

Paying brokerage each time means it doesn't work out so well to dollar cost average into an ETF.
Click to expand...

So you would just purchase once as a $5k lump sum each year?

Why VAS?
 
redwing said:
So you would just purchase once as a $5k lump sum each year?

Why VAS?
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VAS allow you to buy/invest any amount (over $100) once you have a minimum $5k investment. This means you can set up monthly payments. For me this is one of the big advantages over traditional direct investment.
 
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