Money/Investing
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@bayimports said in Money/Investing:
I have heard of Raiz and Spaceship here is Australia, but I have no experience with either, I am curious if anyone has had success.
As for zero debt and no mortgage....you lucky bastard
Yeah, paying off the mortgage was our main priority and just made as many extra payments as we could, took 17 years to do it which is still a long time.
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@chimoaus good question.
Was grappling with that question this year, before Covid rocked along.
Looks like a bunch of ETF available. Reddit's NZFINANCE subreddit seems pretty keen on various promoters - sharesies and a couple of others (can't remember off the top of my head).
Index funds are your friend, diversification helps you big time. Remember, you never know in the next few years what the markets are going to do.
Good luck, let us know how you get on.
Resources I liked
the motley fool (UK version) - back in the day. Not sure how it is now
Mary Holm (https://maryholm.com/)I read a book by (Bogle) I think about vanguard and index funds early on. I like index funds. They're boring, but accumulate over the years.
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Index trackers have very low costs compared to active funds which is a considerable benefit. On the downside as they have to hold or simulate every stock in the chosen index you get to tread in every cowpat. The FTSE100 is a case in point. 20 years ago it was trading around 6900, today it is trading around 6550...
Costs are important but not as important as value. You need to have your appetite for risk assessed and this should then drive your asset allocation to give you the prime make up of your portfolio. You then decide whether to gown down the active or passive route or a mix. Better to take advice (and pay for it) either way.
Investing can be compared to jumping out of a plane. Do you want the cheapest parachute or the best one?
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The Vanguard Growth and Vanguard Russell ETFs look pretty good. I might get in and harness growth on the US market. I usually trade US stocks using my bank's trading department in NZ, but the fees seem significant. Also you can't trade in real time, I generally lodge a buy order at market value. Is there any mainstream dependable online trading platforms that charge low rates that I can make trades myself in real time?
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My mate uses hatch. Says it's very cost effective if you are buying significant parcels of shares, only 3USD a trade. No real time trading but you can target price to buy and sell. I'm gonna have a go, much cheaper than ASB securities and they are the parent company to kiwibank so should be pretty safe
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@Catogrande love the parachute analogy! Continuing on the same track, it's hard to research the quality of a parachute yourself, so find an independent financial adviser, preferably one who doesn't rely on commissions.
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@TeWaio might be able to point you in the right direction.
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@Godder said in Money/Investing:
@Catogrande love the parachute analogy! Continuing on the same track, it's hard to research the quality of a parachute yourself, so find an independent financial adviser, preferably one who doesn't rely on commissions.
Yep, get one that charges for the advice not the transaction
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@Magpie_in_aus said in Money/Investing:
@TeWaio might be able to point you in the right direction.
(For NZ based people) I think www.piefunds.co.nz
is well run with a range of different options. I don't have any money with them currently but a friend of mine and @Magpie_in_aus works there in investor relations. -
@canefan said in Money/Investing:
@JC said in Money/Investing:
Are you sure you want an ETF? You can invest in an index fund without going into an ETF.
Whats the difference? I thought they were essentially the same....
They overlap but they're not the same. An ETF is simply any fund that is listed and traded on an exchange. That means they have variable pricing that changes throughout the day depending on the real-time prices of the securities that the the fund holds.
An index fund normally doesn't have intraday or real-time trading. It has a daily price set at the end of the day just like a mutual fund or money market fund. It's fundamentally a passive investment.
An ETF's purpose could be to follow an index strategy but there are ETFs for all sorts of purposes.
You can buy directly into an index fund without going through an ETF.
ETFs can be bloody expensive, and for small investors they may not be very efficient. The fees are usually quite a bit higher. If you think about it if you have someone tracking, buying and selling constantly throughout the day that creates an admin overhead that a passive approach just doesn't generate. There are a couple of other potential disadvantages. ETF's typically suffer from drag (due primarily to uninvested cash) that means while the fund may be tracking the index it may not be fully invested in that index. Any idle cash probably isn't earning at all, which dilutes the return.
Depending on the ETF's fund manager, they may also be a bit slack at all of the entitlements stuff: collecting dividends, corporate actions, and chasing tax credits. It's a bit like trying to get a real estate agent to wring the last $1000 out of your house sale when they already have their mind on selling the next house.
There's also a systemic issue with ETFs in this country as they are "listed PIEs" so by default they are going to tax any distributions at the full PIE rate. That may not matter if you are a top rate taxpayer, but if you aren't you won't be able to claim back the extra tax you've paid until the end of the tax year.
It's not all bad news for ETFs though. If the market shits the bed if you have an ETF with a manager actively managing it they may choose to sell off everything in enough time for you not to lose your shirt. But if you're in a passive fund you're just going to be a spectator until the end of the trading day.
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@canefan In general, if a fund manager isn't quoting a fee and posting it as a debit to your account it's because they are deducting the expenses directly out of the fund assets. So you get a slightly lower return instead. There is a whole chain of people involved in the maintenance of the fund that clip the ticket along the way. Fund managers, fund accountants, brokers, custodians. If you assume that as a whole you are going to get charged $5 in expenses for every $1000 you have invested (i.e. 50 basis points) you probably won't be far away.
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@JC said in Money/Investing:
@canefan In general, if a fund manager isn't quoting a fee and posting it as a debit to your account it's because they are deducting the expenses directly out of the fund assets. So you get a slightly lower return instead. There is a whole chain of people involved in the maintenance of the fund that clip the ticket along the way. Fund managers, fund accountants, brokers, custodians. If you assume that as a whole you are going to get charged $5 in expenses for every $1000 you have invested (i.e. 50 basis points) you probably won't be far away.
Understood, everyone has to make a living right? Considering they have increased in value by around 30% per year over the last two years to date, I would take that
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@TeWaio said in Money/Investing:
@Magpie_in_aus said in Money/Investing:
@TeWaio might be able to point you in the right direction.
(For NZ based people) I think www.piefunds.co.nz
is well run with a range of different options. I don't have any money with them currently but a friend of mine and @Magpie_in_aus works there in investor relations.Still recommend these guys?
Iām sending some money home to invest for at least a few years (likely much much longer).
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@gt12 yes, I've put some long term money with then recently and it's held up very well given the market volatility. Just pick the right fund for your time horizon / risk tolerance, and seek some professional advice on that if you need it.