Managed Funds

smiley474

smiley474

Hey guys, just looking for some feedback. I couldn't find any existing threads so I'll ask with this one.

I'm attempting to get my younger brother he's 19 on a path other than pay in one hand and by the end of the week, nothing left.

I was looking at something along the lines of a managed fund, where some of his pay each week goes into the fund and overtime he will hopefully see it grow and be on the path of wealth creation. Well that the plan.

Over the past year or so I has tried to get him to save and you get the usual yeh yeh I'll be onto that next week once I pay this bill off. We've all heard it before and done it all before ourselves. Hindsight!!!

Anyhow I'd like to see him do something other than p!ss it all up the wall each week. Look forward to some feedback, maybe there is a better option than a managed fund that I haven't cosidered.
 
Smiley Mark,

Find out his personality type: whether he is a "Move Away From" or "Move Toward"

A move away from is motivated by "If you don't do this, something bad will happen (sooner than you think!)"

A move toward is motivated by "If you do this, the reward will be this (sooner than you think)"

The only other suggestion is to lead by example.... particularly if your brother is a "move towards". There is a time and place for some luxuries (as long as you can afford them and he has the same value judgement as you) to effectively "show off" and say, "Here, if you do this, you'll be able to have this too!"

Cheers,

The Y-man
 
alexlee said:
If you can't get him to save money, what makes you think he'll agree to putting money into a fund?
Click to expand...

After all he's only 19, so he's not totally inclined to be thinking about the future too much. Must admit I wasn't at that age but I didn't have a decent income either :) Anyhow if I can present a good plan to him I'm sure he would be into it. I'm not talking about huge sums each week, maybe 10-15% of his income so the theory would be that with the money coming out before he receive his pay it won't be there to spend. He still would have plenty to fritter away but at least some of it will be working for him.

I suppose the other question I'm asking as I haven't used managed funds myself so I'm looking for some feedback on the best types of funds to use from other peoples expierience. Pro/Con's that sort of thing.

Just trying to develop a plan.
 
The Y-man said:
Find out his personality type: whether he is a "Move Away From" or "Move Toward"

A move toward is motivated by "If you do this, the reward will be this (sooner than you think)"
Click to expand...

Cheers The Y-man.

I'd certainly put him in the "Move Towards" group. As i said in the previous reply, I'm just trying to develop a plan he will buy into.

Simply, just leaving money in his savings account and trying to built it doesn't work for him and from all the stuff I've been reading over the past few months it's a crap plan to start with anyhow.
 
smiley474 said:
Simply, just leaving money in his savings account and trying to built it doesn't work for him and from all the stuff I've been reading over the past few months it's a crap plan to start with anyhow.
Click to expand...

Actually I think putting money into a savings account is the best first step. After all, managed funds are more risky. They'll perform better than cash over the long term but in the short term who knows. e.g. it's easier to save money in a cash account and put it into a property in 2-3 years. I wouldn't take that sort of risk with managed funds in such a short timeframe.

I still think you need to get his hunger up. Maybe give him The Richest Man in Babylon?

Sometimes people have to discover this stuff at their own pace. Maybe the best you can do is show him by example what can be done, and in time he will ask you. Otherwise you're just pushing your views on him.
Alex
 
Hello smiley Mark,

We have 4 daughters who we encouraged to place a regular deposit into a Dragon Direct fund account. It has helped the first 3 to purchase their first cars outright without the need for personal loans (bad type of debt; this one).

Totally agree with Y-Man re leading by example; if he can see it works for you, might that be enough of a motivator not to spend the whol paypacket?!?

K&R
 
When I was young I realised that I was beter at paying off obligations than I was at saving money.

I went to my credit union and borrowed $5000 and bought some shares. CBA I think. I paid that down in 6 months and claimed the interest as a tax deduction. I did it again.

I would never have saved $5000. Something would catch my eye and I would dip into it.

Interestingly I had peers that reckoned I was nuts. Imagine borrowing to buy shares - what if they go down? Illogically they all borrowed to buy cars but society has groomed us to think this is acceptable.

perhaps this might work for him.

Have a read of this post :D
 
alexlee said:
Sometimes people have to discover this stuff at their own pace. Maybe the best you can do is show him by example what can be done, and in time he will ask you. Otherwise you're just pushing your views on him.
Click to expand...

Thanks for the reply's so far. Food for thought as usual.
Must admit I could do with showing him a little of what I've done over the years.
From a simplicity point of view I will look to get him onto something like the Dragon Direct and see where it takes him.
 
Last edited:
perhaps this might work for him.

Have a read of this post :D
Click to expand...

Enjoyed the read. Will past it on. Fortunately he doesn't have debt problems, YET to discover Credit Cards or take much notice of Harvey Norman ads!!!

Still got a couple of mates who could really do with having a read of this thread. Probably won't change anything but you can only try :)
 
The Wealthy Barber ...

by David Chilton ...

The book seems to be sending the message you're trying to pass on - save 10% of your income, invest wisely, and you'll be a millionaire ...

Another possibility is Affluenza, by Clive Hamilton. I'm having trouble coming up with a description of this one, maybe google it? It's about society's addiction to overconsumption. In retrospect, perhaps a bit too out there for him yet, but a good read anyway (loses the plot a bit at the end though).

Your brother will come to it in his own time, or not, as the case may be. The best you can do is lead by example. Show him what you've achieved. Could you have done better if you'd started earlier? A little sibling rivalry could go a long way!

I'd suggest a high interest account with someone like ING, as against St George, simply because the cash is (or was, when I had one) less accessible, so every purchase gets a little bit more consideration.

Oh, and get him reading this forum! It's inspired many!

DJ
 
Simon, that post is platinum!

Do you still have those same Woolies shares?

Posts such as that one which outline the power of compounding capital growth etc in real terms are very inspiring.
 
natmarie73 said:
Simon, that post is platinum!

Do you still have those same Woolies shares?

Posts such as that one which outline the power of compounding capital growth etc in real terms are very inspiring.
Click to expand...

I took a profit at about $10 and thought I was pretty clever. Another lesson learnt there :( I now buy to hold as a rule. Don't need to take profits and just want dividends to fund extra growth. In fact I would like a blue chip that channels all profits into growth so I didn't have to pay tax on dividends and could take all the income at the end with a 50% tax break!
 
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