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Power Raid said:
Why?

I think this should be taught at schools

Why should it take 20 years to see the light?
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What happens if the litigation is unsuccessful?

Wouldn't want to confuse some impressionable people by unnecessarily using one of the most dangerous investing phrases... 'risk free'.
 
George Washington said:
What happens if the litigation is unsuccessful?

Wouldn't want to confuse some impressionable people by unnecessarily using one of the most dangerous investing phrases... 'risk free'.
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it depends on how you structure it but the form is usually debt and has recourse over all the companies assets and not just the outcome of the litigation. companies prefer this over equity as the litigation result uncertainty would cause unnecessary dilution. So they turn to an instrument that preserves their capital structure.

so risk free is appropriate and reserves the same definition as used in other "risk free" investments.
 
Power Raid said:
it depends on how you structure it but the form is usually debt and has recourse over all the companies assets and not just the outcome of the litigation. companies prefer this over equity as the litigation result uncertainty would cause unnecessary dilution. So they turn to an instrument that preserves their capital structure.

so risk free is appropriate and reserves the same definition as used in other "risk free" investments.
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So you would then be stuck with a bunch of business assets you have no use for instead of cash, which you would probably need to liquidate in a firesale?

Sounds like risk of capital loss to me.
 

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George Washington said:
So you would then be stuck with a bunch of business assets you have no use for instead of cash, which you would probably need to liquidate in a firesale?

Sounds like risk of capital loss to me.
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how do you work that out?
 
Scotland said:
Even though he's bant you just made bunsen burner's head explode.
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I look at Australia an see a lot of similarities to Japan (a mature market). By breaking the investment opportunities into 4 simple quadrants being money, property, shares and other.

Money includes bonds, term deposits and other interest yielding deposits. I would expect 2-5% being a normal range going forward. but when you break it down and count tax and inflation, a 5% yield is only actually 3% after inflation (assume 2%) but you are taxed on 5%. So your return is only 1.5% after tax and inflation.

Property is a function of wages, interest rates and inflation. The RBA has been pretty good at keeping inflation in check, interest rates will increase at some point (putting downward pressure on the market - expect the increase to be marginal though) and wages will be flat for decades. Adding to the downward pressure on property is the introduction of "wealth taxes" on property which will increase over time, have lower thresholds and capture more and more through bracket creep. Property is important within a portfolio as a tool for leverage but expect lower returns than historical performance.

Shares are fun, generate good returns but the volatility may scare off many. The top 200 will have yields as they will trade on higher and higher multiples which translates to having to trade to harvest dividends. The sub 200s will generate higher returns but expose investors to greater risks. The bigger picture issue is globalisation will effect our companies performance and it will effect whether the ASX is even a relevant exchange due to poor regulatory design and poor taxation.

This leaves one last quadrant which is "other". Other includes metals, synthetics, boutiques and the overseas equivalents of money, property and shares. This is the harder place to play but like Japan ended up, this is where Australians will have to play to generate proper returns. Examples of this included those who bought into US property at the bottom of the GFC and doubled their money on the real estate growth and then benefited from the FX.


Interesting times ahead and those that seek the safe harbours of three of the quadrants will be left behind financially.
 
wadistance said:
instead of creating a new thread I just thought I would throw it out there - how much do you put away per week on your income?

I find I put away roughly 20% in savings, spend 20% on rent, put about 20% on my credit card (which I need to get rid of) and then the other 40% is for day to day, bills and incidentals.

Anyone else want to do a breakdown, and/or advise me if you think I could do more/less? Would like some differing opinions. My partner is a massive saver/hates spending, and I used to spend heaps but she's curbed it a bit :(
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My partner and I have no kids so it makes saving much easier. We put away 40% into shares and 16.66% into saving for a house. The rest we spend/accumulate for emergencies.
 
Hellgood said:
Turned 21 a few months back and decided it's time to put a bit more thought into this so am going to see a financial planner. But would be very interested in hearing any comments/tips from a second opinion here!

Have 20k in a savings account in bank, interest is pretty rubbish at the moment so usually get approx $60 bucks back a month, spoken with the bank and they agree a term deposit isn't really an option. Also have approx 2k worth in shares, not sure whether to stay out of this or get in further and build something up with dividends from 'blue chip' companies which has been mostly my strategy so far (not that I've gone in with a lot of science to base this on).

Honestly don't know where I stand amongst other people of the same age, never really discuss money with mates so if anyone could give any insights that would be great?

Personal situation is that I have finished uni, have a full time job and am paying a couple of hundred a week for rent.
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You're doing well. If I were you I'd invest a a decent amount into shares. For someone of your age it's probably best to aim for market returns. It might sound boring but it's better than most people. Market returns historically average around 10% in Australia and the USA with dividends reinvested. I would look at an LIC such as AFIC or Argo or an ETF such as VAS. Be sure to use cheaper online brokerage, understand the long-term nature of investing, and save up at least 2k per bundle, otherwise brokerage eats away too much profit. Pre-supposing you will get about 9% returns over the next 40 years, putting 5k away each year will leave you with $1.84 million, or ~$564k inflation adjusted.
 
teens......focused on fun, focused on getting out of Adelaide, saved very little, had loads of ambition but no idea
twenties......earned basic wages (saved $100k), travelled the world, worked hard but not smart, before returning to university and graduating with F' all left but a couple of great holidays
thirties......focused on earning money and had enough to retire by late 30s
forties.......just help others get their businesses up and community stuff whilst managers run my businesses

the only thing I can say from the experience is invest in yourself and back yourself......rather than just spending or just saving.

saving is a function of income and expenses. get your income up and hold off on buying your dream house, hold off on wasting money on cars and consumables...etc until you "really" can afford it and have time to enjoy it. ie why have a Ferrari as a merchant banker pulling 14+ hr days?
 
Scotland said:
Young ones struggle to buy houses because houses are very expensive. Having a planner isn't going to change that.

If you need to employ someone to tell you to spend less than you earn, don't borrow large sums of money to buy depreciating assets etc. then you're going to struggle in life.
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Having someone to mentor you and keep you accountable works for many ppl.

I know because I do it and I have many happy clients achieving their goals because of it
 

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Take light beer to parties. Drink everyone else's imported/craft/nice beer.

And the best part: at the end of the night you say "Oh, there's a few lights left!", and take them home with you.
 
I think the key for me was doing a budget.

I'm in my mid 20's, and the idea of a budget made my eyes roll.

But until I literally got a visual representation of what I my expenses were and my maximum potential savings (lower than I expected), it really shook me into gear. I think the key is to enjoy yourself whilst you are young, albeit within reason and cut back on the things which aren't necessary.

For me.

Foxtel $135 -> $60
Phone Bill $89.99 -> $30 (this took discipline)
Electricity (turning those damn lights off!) $389 -> $240.

That's $2200 extra in a year!

Cutting back on the fast foods / shop coffees (without removing it) and generally shopping smart with petrol, foods, clothing and games. All adds up

Kind of wish I started this earlier in my life, but I'm out of Uni now and into a decently paying job, so the foundations are there for the future. Plan to save and travel for 5-10 years and go from there.
 
Power Raid said:
teens......focused on fun, focused on getting out of Adelaide, saved very little, had loads of ambition but no idea
twenties......earned basic wages (saved $100k), travelled the world, worked hard but not smart, before returning to university and graduating with F' all left but a couple of great holidays
thirties......focused on earning money and had enough to retire by late 30s
forties.......just help others get their businesses up and community stuff whilst managers run my businesses

the only thing I can say from the experience is invest in yourself and back yourself......rather than just spending or just saving.

saving is a function of income and expenses. get your income up and hold off on buying your dream house, hold off on wasting money on cars and consumables...etc until you "really" can afford it and have time to enjoy it. ie why have a Ferrari as a merchant banker pulling 14+ hr days?
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That's a fair effort. Howd you go from broke to retired in less than 10 years?
 
Deliverance said:
That's a fair effort. Howd you go from broke to retired in less than 10 years?
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paid out on a property deal for pulling it together but better still offered to participate in the management buy out of a part of the rothschild business when they left the mining sector.

this grew from a small business of circa $20m to over $600m but also gave me opportunities with FMG, RIV and AGO. We bought 35% between two funds of AGO ($0.20, $0.30 and $0.45 and out at over $4) and 20% of RIV at $0.20 at out over time including the takeover at $16. The FMG stake was smaller but our chairman was also the chairman of FMG so we got in at $0.20.

within three years I had earned enough to step out and started a sister business with 33% equity and now own 50%. This is now one of the most successful PE resource businesses in Oz.

We also had a great run of luck following a gold team firstly with Samantha, then Equigold (in at $5m-10m MC and out when Lihir paid $1.3b) and then regis.

The debt, equity and hybrid investments were good but the FX and commodity trading served us just as well.

Property, seafood, beef, IT are also happy stomping grounds.

but looking back.......right place right time
 

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Power Raid said:
paid out on a property deal for pulling it together but better still offered to participate in the management buy out of a part of the rothschild business when they left the mining sector.

this grew from a small business of circa $20m to over $600m but also gave me opportunities with FMG, RIV and AGO. We bought 35% between two funds of AGO ($0.20, $0.30 and $0.45 and out at over $4) and 20% of RIV at $0.20 at out over time including the takeover at $16. The FMG stake was smaller but our chairman was also the chairman of FMG so we got in at $0.20.

within three years I had earned enough to step out and started a sister business with 33% equity and now own 50%. This is now one of the most successful PE resource businesses in Oz.

We also had a great run of luck following a gold team firstly with Samantha, then Equigold (in at $5m-10m MC and out when Lihir paid $1.3b) and then regis.

The debt, equity and hybrid investments were good but the FX and commodity trading served us just as well.

Property, seafood, beef, IT are also happy stomping grounds.

but looking back.......right place right time
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Harder you work, the luckier you get!

Great to hear.
 
interest rates are circa 30% in the Ukraine........which means lower asset prices

time to buy some assets in the Ukraine.........fly out tonight



one has to take the view whether the Ukraine becomes a puppet for Russia or joins the EU. Either way, I think there is a win but the game will be played differently.
 
Power Raid said:
interest rates are circa 30% in the Ukraine........which means lower asset prices

time to buy some assets in the Ukraine.........fly out tonight



one has to take the view whether the Ukraine becomes a puppet for Russia or joins the EU. Either way, I think there is a win but the game will be played differently.
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Honestly you should write a book.
 
Power Raid said:
interest rates are circa 30% in the Ukraine........which means lower asset prices

time to buy some assets in the Ukraine.........fly out tonight



one has to take the view whether the Ukraine becomes a puppet for Russia or joins the EU. Either way, I think there is a win but the game will be played differently.
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Provided you're not looking at buying into oil, gas or electricity routes there's a lot of good investments to be made.
 

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