FHSSS is a sensible place to build a deposit
Emily’s medium-term goal is to buy a home, but in the meantime ...
QI’m single, nearly 26, with $70,000 in savings, $14,000 in a mix of ETFs and single stocks and $30,000 in super. I’d like to buy a house, but being a casual worker I don’t see it happening anytime soon. Over the next few years, I am thinking of putting my money into the First Home Super Saver Scheme. I am reluctant to buy more ETFs because I am starting to find the paperwork overwhelming. I have bought small parcels of shares and set up dividend reinvestment plans for most of them. I worry about keeping track of all the different prices I paid for the shares, and the thought of selling any of them seems like a nightmare. Any advice?
Go Emily! At 26 you really are all over your money. I only wish I could say the same. At 26 I was still “boy hopeless” with money, basically converting my salary into beer and golf balls.
The FHSSS is a great idea. It gives you access to the super fund and the type of asset mix you want, all in one place, meaning no paperwork or tax returns. Then, of course, it is available to assist with the purchase of a home.
I get your point about dividend reinvestment and having different share purchase dates at different prices and also holding a number of ETFs. You know, if you end up holding many ETFs you start to replicate a market index. One argument is to hold a broadly diversified ETF or a fund from one of the big low-cost managers such as Vanguard or BlackRock rather than many different funds. Equally, but do note here I am totally biased as I am the chair of the company, a low-cost online provider such as InvestSMART provides a mix of ETFs in a single fund. It also provides a free online portfolio manager, which may help you keep track of your current investments.
Most importantly, though, at 26 you have a terrific understanding of money and managing your money. Just keep this going and you will be financially independent way before retirement. This is such a great goal. Financial independence means you run your life on your own terms.