Property vs Shares

[Liverpool St]

Hi,

I wonder if there are any other seniors out there who are still investing? I have a LVR of about 6percent and equity well in excess of $1m. I am still working in my 60s and am thinking of using the equity for blue chip shares instead of more property. I would appreciate anyone's views.

LS

 

[TPI]

Hi,

I wonder if there are any other seniors out there who are still investing? I have a LVR of about 6percent and equity well in excess of $1m. I am still working in my 60s and am thinking of using the equity for blue chip shares instead of more property. I would appreciate anyone's views.

LS

Is the equity in property?

Inside or outside super?

 

[Alex Straker]

LS, I sent you a PM.

TPI asks very wise questions and there are also a number of other questions that have high relevance, the most important one being are you using a financial planner? There some structuring implications that can make an big difference to tax and pension. As you are in your 60's it is crucial that you get the structuring right to maximise retirement benefits.

 

[Liverpool St]

Is the equity in property?

Inside or outside super?

Hi TPI,

Equity is in property outside of Super. PPOR is unencumbered in Eastern Suburbs ($1.4M) and properties conservative valued at $2.3M with $150k owing

LS

 

[Liverpool St]

LS, I sent you a PM.

TPI asks very wise questions and there are also a number of other questions that have high relevance, the most important one being are you using a financial planner? There some structuring implications that can make an big difference to tax and pension. As you are in your 60's it is crucial that you get the structuring right to maximise retirement benefits.

Thanks Alex, you are right I don't want to make mistakes at this stage

LS

 

[willair]

Hi,

I wonder if there are any other seniors out there who are still investing? I have a LVR of about 6percent and equity well in excess of $1m. I am still working in my 60s and am thinking of using the equity for blue chip shares instead of more property. I would appreciate anyone's views.

LS

Maybe just look for the income from fully franked blue chips but all are at the top 50 blue chips most ex div are sitting on the near top of the bell-curve or dangerously close,depending on the income from the ip side why not just retire..

 

[TPI]

Hi TPI,

Equity is in property outside of Super. PPOR is unencumbered in Eastern Suburbs ($1.4M) and properties conservative valued at $2.3M with $150k owing

LS

How much do you (and your partner) have in super?

And any plans to downsize from your current PPOR to another property or one of your investment properties?

And are you comfortable borrowing against your investment properties to invest given your age and how long you expect to work in your job/business?

 

[Greg Reid]

I am not a financial planner nor giving specific advice.
I agree with Alex's comments that at your age it perhaps is even more time critical that you get the right structure in place and consider the implications of estate planning, tax and even pension although it sounds as if you would be self funded anyway.

As to what is the best choice for you will depend on what your ultimate goals are, income generation for retirement, building wealth for passing to beneficiaries etc.

PPOR is still an exempt asset so why not upgrade?
Still working at 60 odd, further contributions into super? If you have a SMSF, you could always use that as a vehicle to purchase property in and under existing super and tax rules, tax exempt on retirement after 65 including CGT.

Diversification should always be considered.
Depending on your income, it is harder to obtain loan funding at your age irrespective of what lenders say about no age discrimination. It is still possible but harder and you need a good story and exit strategy if required.

Be interested to know what you chose to do.

 

[Liverpool St]

I am not a financial planner nor giving specific advice.
I agree with Alex's comments that at your age it perhaps is even more time critical that you get the right structure in place and consider the implications of estate planning, tax and even pension although it sounds as if you would be self funded anyway.

As to what is the best choice for you will depend on what your ultimate goals are, income generation for retirement, building wealth for passing to beneficiaries etc.

PPOR is still an exempt asset so why not upgrade?
Still working at 60 odd, further contributions into super? If you have a SMSF, you could always use that as a vehicle to purchase property in and under existing super and tax rules, tax exempt on retirement after 65 including CGT.

Diversification should always be considered.
Depending on your income, it is harder to obtain loan funding at your age irrespective of what lenders say about no age discrimination. It is still possible but harder and you need a good story and exit strategy if required.

Be interested to know what you chose to do.

Thanks Greg,

Much appreciated. Yes, I am still 63 and still working, reasonably fit and do a 5 km run 4 times a week before work. I guess it is true that baby boomers don't retire just re-focus. I am leaving the financial lenders out of the equation and will just use the equity in the properties. I don't want to upgrade the PPOR - it is that bad debt thing.

Anyway thanks

LS

 

[alexlee]

LS, presumably you want to move into shares for diversification and income. Is there any reason why you didn't start this, say, 10-15 years earlier?

 

[Liverpool St]

LS, presumably you want to move into shares for diversification and income. Is there any reason why you didn't start this, say, 10-15 years earlier?

Alexlee,

I concentrated on property. Now at this age I am looking for an easier more liquid path. High income was not a priority 10 to 15 years ago.

Thanks

LS

 

[roe]

Alexlee,

I concentrated on property. Now at this age I am looking for an easier more liquid path. High income was not a priority 10 to 15 years ago.

Thanks

LS

do your research, let your cash ALWAYS sit at call, nibble your purchase into great business when there is a brief panic or general market correction, you not only getting great hassle free dividend but great capital gain that goes with it.

there was a brief panic with coca cola a few weeks back as an example
you would have done well buying up at those $9 price ...

There will more to come down the track, just be patient have your list of great business, when the time come just deploy the capital then sit back and enjoy hassle free investment

 

[Liverpool St]

do your research, let your cash ALWAYS sit at call, nibble your purchase into great business when there is a brief panic or general market correction, you not only getting great hassle free dividend but great capital gain that goes with it.

there was a brief panic with coca cola a few weeks back as an example
you would have done well buying up at those $9 price ...

There will more to come down the track, just be patient have your list of great business, when the time come just deploy the capital then sit back and enjoy hassle free investment

Thanks Roe

LS

 

[Intrigued again]

Alexlee,

I concentrated on property. Now at this age I am looking for an easier more liquid path. High income was not a priority 10 to 15 years ago.

Thanks

LS

What was your the priority

Thanks

 

[Liverpool St]

What was your the priority

Thanks

My priority was capital gains and the LOE concept...I liked the idea of having tangible assets that I can borrow against the equity in the properties for more property. I dealt in property options and sold a few properties. I like the idea of leaving properties to our daughters. You get the idea

LS

 

[Intrigued again]

So, you had no equity 10 to 15 years ago, is that correct ?

Thanks

 

[Liverpool St]

So, you had no equity 10 to 15 years ago, is that correct ?

Thanks

I had my unencumbered house in Canberra. Some equity and enough to get me going

LS

 

[dex]

do your research, let your cash ALWAYS sit at call, nibble your purchase into great business when there is a brief panic or general market correction, you not only getting great hassle free dividend but great capital gain that goes with it.

there was a brief panic with coca cola a few weeks back as an example
you would have done well buying up at those $9 price ...

There will more to come down the track, just be patient have your list of great business, when the time come just deploy the capital then sit back and enjoy hassle free investment

I tried doing that around 2008 - 2009 and got slammed. If someone followed your advice and another correction took place they could lose everything.

 

[Liverpool St]

I tried doing that around 2008 - 2009 and got slammed. If someone followed your advice and another correction took place they could lose everything.

Hi Dex,

I wasn't giving advice, I am saying what I did. Where were your investments?

All the best

 

[dex]

Hi Liverpool, my post was a reply to roe who recommended to buy shares when the price drops. Dollar cost averaging into quality shares is generally good advice but can be dangerous if there's a major correction. When this happens the fundamentals don't matter so much because everyone is panicking and selling.