Aussie Firebug

Huge Pod to start 2019!I have the man, the myth, the legend, Peter Thornhill himself. Author of bestseller Motivated Money, Peter is famous in the FIRE community for his teachings on dividend investing and why it’s the best strategy for Australians to retire comfortably. And for someone who is currently receiving over $400K a year in passive income via dividends… when he talks, we should listen!In today’s episode we chat about:– Peter’s background in investing– ETFs vs LICs– How Peter invests– Capital gains vs Dividends– International diversification– Labor removing the franking credit refund– Why Peter uses a financial advisor– Debt recyclingand much more

www.aussiefirebug.com/aff/In Today's episode we chat about:- When to prioritise paying off a mortgage- What Super fund I'm with- High growth vs DividendQuestion (3:52)Hello,I have found a lot of information in regards to paying off a mortgage vs investing. However, I cannot find much to match my circumstances and am hoping you could shed some light.I live with my father and have a very low cost of living. I have an investment property and also invest in Vanguard index funds.If I lived in my property I would prioritise investing in the equity funds over paying extra on the home loan. My question is would there be anything to think differently about if the property is being used to create income as an investment rather than a debt burden if I was living in it? Is there any reason to prioritise paying extra on the mortgage?Thank you,StevenQuestion (11:27)Hey,First of all, thanks for the great content!I wanted to know if you have any posts on super or any advice on what to do with your super account for early retirement? Do you have an SMSF or do you go through a specific super fund? Basically, I want to know what I can do to optimise my super. I live in QLD and I'm with Qsuper.Thanks,JackQuestion (15:20)Hi Aussie Firebug,Thanks for your Great work on the blog and podcast.I wanted to ask about your move to Strategy 3, I think I understand the logic behind it and what you’re looking to achieve.If I can play devil’s advocate, wouldn’t it make more sense to invest in higher growth indexes for now (e.g. US Markets/VTS has massively outperformed ASX/VAS/A200 over the last 10 years even allowing for dividends), as this would grow your net wealth and allow you to achieve FIRE earlier. After that, you could sell VTS/VGS, convert to dividend paying shares and LICs, and live off the passive income?Key point being, while you’re working and not reliant on the dividend income, growth stocks/Index funds would allow you to grow the pie larger and more quickly. Once it’s at a sufficient size where the equivalent value in Aus dividend stocks/index funds would pay enough passive income to live off you would sell and convert right?Cheers and thanks for your time.Rando

What do you use to track your portfolio's performance? Does your reporting software take into consideration things like franking credits, DRP and currency conversion?Today I have the pleasure of speaking to Doug Morris, the CEO of Sharesight, the best share portfolio tracker for Aussie investors. But Sharesight does a lot more than simply telling you the true performance of your portfolio. There’s a bunch of other useful tools and features available and some of which we are going to cover today.In today's episode we chat about:- How Sharesight can help show your true performance- Tax reports to making lodging your tax return a breeze- Historic share data to quickly see how a theoretical portfolio would have done in the previous decade or twoand much more

www.aussiefirebug.com/aff/In Today's episode we chat about:- Trying to get friends on board with investing- Labors plan to remove franking credit refund- Private healthQuestion (3:58)Hi,Have you had any success explaining investing to friends? I am 28 and have a number of friends who don't really invest at all, preferring to keep their money in the bank. I don't want them to miss out on all this good compounding but I can't sell investing to them.-LukeQuestion (10:33)Hey,Considering the market turbulence this week and the concerns around the possibility of a Labor Government win and removing Franking Credits refunds... Will your investing strategy remain the same for the next 12 months? Or are you planning on adapting to suit market conditions?Do you Dollar Cost Average or save up to buy in the market dips?Thanks,DanielQuestion (20:22)G'day AussieFire Bug,Been smashing your podcasts over the weekend and got through about 3/4 of them. They have been amazing.What are your thoughts on private health insurance? Do you find it worth it? I know it does reduce the Medicare levy by a little, but is it worth it?Thanks AussieFire Bug,Michael

www.aussiefirebug.com/aff/In Today's episode we chat about:- House deposit vs investing - Investing through trusts- ETFs vs LICs in market downturnsQuestion (3:00)Hi Firebug!Loving the content and hearing all the great questions from listeners on Friday’s, keep up the great work. I’m hoping to hear your opinion or what you would do in my shoes if possible :)My husband and I are 36 with a 2 &1/2-year-old and thinking about expanding our family because you know by this point sleep is a distant memory anyway!We’ve got a nice emergency fund, zero debt and have just started to invest in ETFs. Super is currently sitting at about $150k. Right now we’re really fortunate to have free housing but are keen to get into a place of our own as we can’t stay here forever.We keep going back and forth between what’s best to do which is where I’m curious to hear what you have to say.We’re currently saving towards a house deposit and looking to have about $100,000 saved before we buy in SA. Until we reach that goal in approx 2 years our plan was only to invest about $5k a year into ETFs. But we’re not sure if we should beef up that amount we’re investing instead of saving so aggressively for the house because we’ve had investing on pause for 2 years while we cleaned up debt and got an emergency fund together.One of the things that drives me nuts is the brokerage fee with such a small quarterly trade, but hey what can you do (I plan to get on to using self wealth this month!)What do you think you would do in our position, and why?-AmyQuestion (11:33)Hi Aussie Firebug,I just came across your blog as I was searching on how to buy Vanguard Index funds (VAS, VGS) Thank you so much for your blog, you made it very easy for me to understand.Just 2 quick questions:1) I am single, no kids or dependents. Would u recommend buying EFTs through a trust or just under my name? Is there any tax benefit when buying EFT'S thru trust in my situation?2) From what I've read on your blogs, VGS is domiciled in Australia so I don't have to pay taxes outside Australia. Is this correct? Based on your strategy, I might invest VAS 40% and VGS 60%Looking forward to hearing from you.Thanks a bunch!JonathanQuestion (20:07)Hey Aussie,I made an observation today which I thought was interesting. All the main indices were down (ASX200, All Ords, ASX200 Financials, ASX200 Materials, ASX200 Industrials) yet all the larger LICS I track were up (or in the case of AFIC, was flat).Thoughts on this?Regards,Michael

www.aussiefirebug.com/aff/Today's episode covers Trusts, property investing and ethical investing.Question (2:10)Hi AFB,Love the site and podcast!Quick question around Trusts. My understanding, which may be wrong, is that the costs to set up and manage one, out way the benefits unless you have a sizeable portfolio ~$500k+.I'm keen to buy some ETFs for the long term with a goal of having a portfolio in excess of $1.5mil however that likely won't be for ~15years. With that in mind should I buy now under my own name, or set up the trust with the future in mind even if the costs outway the benefits during the early stages?If tax bracket matters I'm in the 37c per $1 and also know the government are proposing changes to trusts and franking credits. How does that impact the decision?ThanksBillyBobQuestion (11:12)Hi AFB,Love your work and the podcasts.Like many of us, you started in property because of the high amount of leverage you can use. As your goals changed due to changes in lending and increased sharemarket knowledge you’ve mentioned divestment of your investment properties.1. What is your strategy for the divestment and what do you have as key considerations for this?2. If you had a PPOR and one property paid off and another 2 (duplex) well underway (7 years to go) would you simply stick with property as many of the entry costs have already been incurred?ThanksSeamusQuestion (18:30)Hello AFB!So Vanguard has a new ETF that has caught my eye... the VESG, apparently its ethically focused and doesn’t invest in stuff like weapons, tobacco and fossil fuel.I have had concerns from time to time about investing in products that I would otherwise avoid buying as a consumer but I had put that one on the self an gone down the VTS/VEU route anyway.Do ethics play into your investments strategies? How so? What do you think of the VESG as a core holding?Happy Monday!Thanks Kindly,Emma

www.aussiefirebug.com/aff/Question (2:19)Hi AFB,Wondering if you could explain your thoughts re: dividend approach to investing.My understanding is that when a dividend is paid to investors, the company’s assets are reduced by the same amount. This in turn reduces the share price by the same amount as the dividend.If this is correct, what is the value of focusing on dividends? The only logic I can see is that once one hits FIRE, they can receive an income without the need to sell shares. Seems ok, but not a particularly compelling reason to concentrate assets to a particular market - in this case, Australia.Love your website and podcast, and hope to hear your thoughts on this.Cheers,ClintonQuestion (11:34)Hi Aussie Firebug,I'm in my 30's, and I'm looking to begin investing my money for future long-term growth.I've read on the internet about 'ready-made portfolio's' (my super company BT offers this).Do you know how they differ from managed funds? Both appear to invest in assets like eft's, shares etc, but just a bit unsure how they differ.If you know of any information that you can share, please let me know.From Matt, an Aussie Firebug follower, and FIRE aspirant.Question (20:17)Hi AFB,Thanks for your informative blogs and podcast. I've been following you for a year now and you've been such an inspiration! Keep up your content!I've just recently purchased my first investment property and was just wondering although it's too late but what are some of the key points that you look for when purchasing a property and which suburbs are your properties located in?Thank you!Edmund

Have you ever heard of an investment/insurance bond?These investments, in my opinion, are the best way to invest for children (your own or others).But it doesn’t stop there. Investment bond can offer a legitimate tax effective alternative to the traditional ETF/LIC route that most Aussies adopt in the pursuit towards FIRE.There are a few specific rules that need to be followedIn today’s episode, I chat to Catherine Van Deer Veen who is the CEO of Generation Life, an Australian investment and insurance company that’s been around for 15 years currently managing 1.3 Billion dollars for investors.If you’re thinking about investing for your kids, neeses or nephews or are looking for a tax-efficient alternative investment product, this is the podcast for you!In this episode, we talk about:What exactly is an Investment BondWhat Generation Life can offer to investorsThe specific rules that you must follow in order to reap the full tax benefitsand much more

www.aussiefirebug.com/aff/Question (3:10)Hi AFB,First of all, love your work and Ask Firebug Fridays episodes. So thank you.I understand your stance on Super as you cannot access any of it until you're in your 60s, however as potential a first home buyer, I cannot help to consider First home super saver scheme where you can access up to 30k of the pre-tax (salary sacrificed) voluntary contributions you've made.To me, it sounds like a no brainier but please let me know if this sounds like a good deal from the Government from your end or if I am missing anything that may cause me to reconsider.Thanks,-DerekQuestion (8:54)Hey AFB,What is going on with the market atm? LICS and ETFs are way down, are you going to wait for them to drop more or buy now?AndeeQuestion (12:45)Hi Mate,Would love to get your thoughts on debt recycling. Feels like a faster way to get to FI by leveraging equity in a property, but I haven't heard you talk about it. Would love your thoughts.Keep up the good work my man. Loving it.Cheers,Ryan

www.aussiefirebug.com/aff/Question (2:48)What are your thoughts on being over-exposed to the Australian economy?It's something I'm grappling with in my portfolio allocation at the moment. So much of the ASX top companies are tied to the Australian housing market and economy - in fact, so much of our economy is tied to the housing market - any kind of pullback will not only affect house prices they will have wide-ranging implications on ASX200 / ASX300 companies, jobs, Government taxation receipts, everything! So this is what worries me.If we really do believe in diversification, then we should be diversifying across asset classes internationally, not within one very small economy. Diversification across direct property investment and buying an LIC or ETF that focus on Australian shares is not real diversification, given these assets are inextricably linked.Interested to hear your thoughts.-DetrimentalQuestion (13:00)Hi,When does purchasing your own house PPOR come into your future plans? Are you planning to move into one of your rentals? How would purchasing a house and potentially having kids affect your FIRE plans?TanyaQuestion (23:07)Hey Mate,I have been reading your blog. I see you mentioned to be wary of mining towns. I was considering investing in Gladstone since the property prices are rock bottom. However, I get mixed views from everyone I ask.What are your thoughts?Luke