This is one of the most common questions I get asked…and it is probably one of the best questions as well.
Whilst it makes sense to pay off your home mortgage as quickly as possible, I believe it can also make perfect sense to start investing while you still have a mortgage.
Because the younger you start, the longer compounding can work its magic. I also find that many people get more motivate by investing (and growing their wealth), rather than just paying down debt.
And you don’t have to invest big amounts either, as long as you do it consistently.
But what should you invest in?
Below I have listed various options. Please note, you should seek personal financial advice before making any decisions:
1) Salary sacrifice to super
An excellent tax-effective strategy, where compounding can work its magic in a low-tax environment. The downside is the legislative risk and the time to access the funds.
2) Investment /education bonds
A simple, tax-effective way to save for yourself and/or your children. The major advantage here is that the returns do not affect your tax position, as long as you don’t cash out your investment before 10 years.
There are various bond providers with multiple investment options on offer.
Perfect as a set and forget strategy for ongoing savings.
A very cost-effective and easy way to achieve instant diversification; you can purchase them via a simple online sharebroking account.
There are many options to chose from, including more exotic-type investments.
You will incur brokerage every time you trade, so it may not be very practical to invest small amounts on a regular basis.
They can be traded the same way as ETF’s, but are typically active in their approach, unlike ETF’s. The management fees will also be higher than most ETF’s.
5) Online investment services like Stockspot and Acorns
There has been a proliferation of online investment providers, who focus on cost-efficiencies and ease of access. They typically offer read-made portfolios, consisting of ETF’s.
Be mindful of minimum costs, as for small portfolios the fees might be quite high.
So, hopefully this has given you some ideas. There is nothing better than learning about investments and how markets work at a young age. Read, research and educate yourself, and don’t be afraid to seek personal advice before taking the plunge.
I am always happy to have a chat about your options. Contact me via Yves@affluenceprivate.com.au or 0432 885 295.
As I understand your time is extremely valuable and scarce, I am able to offer flexible meetings times, including outside business hours and during the weekend. I can even come and meet you somewhere convenient, or talk via videoconference on Skype.
My first consultation is free. I allocate up to 90 minutes to discuss your personal circumstances and to establish how I may best assist you. Where you already have an existing adviser, I would be happy to offer a second opinion. I always quote a fixed dollar fee before we start working together.
Please contact me on firstname.lastname@example.org or call me direct on 0432 885 295. You can follow me on Twitter @YvesSchoof or connect with me on LinkedIn to receive new articles.
Yves Schoof and Affluence Private Wealth are Authorised Representatives of Synchron, AFS Licence No. 243313.
The information posted is intended to be general in nature and is not personal financial product advice. It does not take into account your objectives, financial situation or needs.
Before acting on any information, you should consider the appropriateness of the information provided and the nature of the relevant financial product having regard to your objectives, financial situation and needs. In particular, you should seek independent financial advice and read the relevant product disclosure statement (PDS) or other offer document prior to making a decision.
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