37 - fully offset my apartment, now what?

[marilyn]

@needyfollower Or the, I paid blah blah blah and then someone does the actual maths in the comments and it seems exaggerated.

Never let the truth get in the way of a good story

 

[merrill]

@loo If it were me I would cut back to working four days and do purchased leave and start taking longer overseas trips. I’d also put money in a HISA, and invest some too. I’d definitely stay in the apartment.

 

[hopesinotlost]

@merrill I think OP wants to grow his wealth, so advising him to cutback at work might be counter intuitive. Also, advising someone to "invest" is a little vague don't you think? Perhaps share where to invest if you were in their position - ETFs, IPs, specific stocks perhaps.

 

[raebee]

@hopesinotlost *OP wants to grow his/her health.

Unless I missed where OP said they were male?

 

[jocke]

@raebee Previous posts in men's fashion advice imply male

 

[johnbiggs]

@loo A. But make sure you pick a low fee diversified ETF.

Don’t expose yourself too much to the property market in a single city.

Diversification is the only free lunch in finance.

 

[loo]

@johnbiggs I agree - it's easier to diversify in stocks than in properties, because of the high discrete cost per unit of investment (unless one looks at REITS, etc). I just don't want to be kicking myself in a decade or so's time when houses have doubled in value while my apartment has crept up by a few percent. While I agree that the prospect of a property correction is entirely possible, the returns on property (when factoring in the tax exemption of capital gains as well as the leverage one can obtain compared to stocks) seems to outperform ETFs over the long term.

 

[damon50]

@loo Don't forget when you're comparing property and EFT gains, there's no stamp duty on EFTs, no rates and you don't have to deal with tenants or property managers!

 

[loo]

@damon50 Good point.

 

[johnbiggs]

@loo Property outperforming stocks is not a rule of nature. It’s a fluke. More specifically it’s due to continual bad government policy.

A bet on real estate is a bet that government policy will continue to be poor.

Assuming the government produces better policy, the stock market will outperform real estate on a risk adjusted return basis. We can prove this with financial theory.

 

[loo]

@johnbiggs I'm curious about what specifically you mean by poor government policy in this regard. I agree, the current tax system creates a distortion of sorts to incentivise property investing, specifically buying the most expensive PPOR one can afford and just enjoying tax-free capital gains (and the gains are leveraged, something you can't do unless you have a high interest margin account for stocks). But I don't expect the government to start taxing gains on PPOR, do you?

 

[johnbiggs]

@loo Zoning rules, excessive bureaucracy, immigration, stamp duty.

 

[helping217]

@johnbiggs I’d also throw in negative gearing as far as poor policy goes

 

[sunshinerising88]

@loo It’s kinda dumb that our system encourages you to load up on the most PPOR as possible even if you don’t need it because it’s so efficient.

 

[loo]

@sunshinerising88 Completely agree.

 

[jaecubed]

@loo Depends what your goals are. Where do you want to be living? Two separate decisions, investment vs lifestyle.
Considering you're single and family may not be a short-term need, you could look into A) and/or D) buying a house as an investment (with the idea this could be a house you would live in, in the future), and stay living in the apartment.
In the meantime, there's nothing wrong with setting up a regular contribution into shares, or even using house equity to do it (debt recycling is not necessarily a strategy at this point, considering you're fully offset and have no non-deductible debt any longer).

 

[brini]

@loo Probably A.
but like other suggestion relax a bit and enjoy your 30's your only young once and can travel and do stuff now.
investing in ETFs will increase personal taxes.
maybe maximise deductible super contributions first.

 

[chronel]

@loo Smoke weed, play video games, and masturbate. You earned it.

 

[steel]

@chronel I do that without having earned it

 

[loo]

@chronel I already do two of the three things.