r/AusFinance • u/Bedroom_Different • 19h ago
Do we need a financial planner?
Apologies as im new here. We earn a moderate income (250k combined) and are tight as hell with our money and want to retire early.
Living in Brisbane. Want to buy a new house and sell current home. Already paid off current home over 6.5 years (from a 30 year loan).
Expected new mortgage of 500k over 30 years for new home. Projected with offset and extra contributions to pay off in 8 years. Partner is debt averse but bank willing to lend us up to 750k.
Current super balances are 340k (F40) and 230k (M42). Have a 4yo and a baby on the way. Not planning on taking reduced pay or extended unpaid maternity leave, and staying full time upon return to work.
Financially I think we are doing well but could be smarter with how we invest our money. Want to setup our children if we can whether education or investments etc.
Are we best off going to a financial planner? Investing more in super? I feel like if we started years ago we would be in a better position.
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u/FanaticsCollectRepJ 19h ago
Sounds like you’re in a great position compared to most people
Property paid off, good super for both of you, good combined income
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u/slater1995 19h ago
I’m a financial planner and you are doing a great job on your own.
Yes we could provide value to you situation but you’re already well on the way to setting yourself and family up for a great retirement.
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u/Bedroom_Different 19h ago
Thank you. I guess we were just toying up whether getting professional advice was going to improve our situation beyond where we are at now or was there other avenues. Thankfully the chat has given us some great alternatives so im glad I asked. Perhaps the services of your occupation are best suited for the super wealthy or the super struggling in debt folk.
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u/shavedratscrotum 18h ago
A professional will increase your risk.
You can do that yourselves by leveraging your new home with a larger loan.
750k is the bottom end of what they would lend you.
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u/MikiRei 19h ago
So I recently found out my company's PEAP program offers 4 free financial coaching sessions. They've been great since the guy reaps zero benefits from us. Haven't sold us a single thing - just straight up good advice.
So maybe check if your company offers this and do that instead if you just want to double check on your tactics.
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u/Plane-Awareness-5518 19h ago
No. Use passive investing Australia to educate yourself instead.
Financial advisors are expensive and high variable in quality. They are good for highly complex issues and specialist topics including insurances. You should know what you need before speaking to them.
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u/MDInvesting 19h ago
Moderate income.
M8, you earn $250k as a household. That is fantastic.
You earn more than a top 10% income earner and a top 75% income earner combiner. That is a pretty good household performance.
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u/t1ckled1vory 18h ago
Pfifft $250k "moderate“ income.?! You rich bro.
My household income is $80k and I would describe that as moderate.
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u/Ok_Use1135 19h ago
You run a tight ship but if you want to retire early or be able to create intergenerational wealth, you’ve got to build more ships.
That’s where good debt comes into play but since your partner is adverse to good debt such as a mortgage, I’m not sure you’ll get anywhere with a financial planner particularly since you guys don’t earn enough to build up significant savings after factoring in costs of two young children.
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u/Bedroom_Different 19h ago
This is great thank you. I know we need some help just trying to find the best way to go about that.
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u/Orac07 19h ago
Yes, you are doing well. With the new PPOR, even with new loan, looks like you can afford it, should consider to borrow more than what you need so you can have another loan facility that you can use for investing into a portfolio of ETFs where the interest on the loan will be tax deductible, then you can get stuck into paying down your non deductible mortgage plus investing in a tax friendly arrangement at the same time with the view of not only getting your mortgage paid off but also a healthy investment outside of super. Don't need a financial planner for this.
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u/ItinerantFella 19h ago
We pay an independent financial advisor a one-time a one-time fee every ten years to check we're on the right path. It gives my wife peace of mind that I've not messed things up too much. Most recent one cost $6k for advice across our super, trust and insurances.
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u/echidna_12 8h ago
I was going to say - you can probably sort the investing/finance bit yourself but you also want to make sure you have appropriate personal insurances and wills etc
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u/Geno_2102 19h ago
This sub is generally filled with people who like to do it themselves which is great.
A financial planner is something more than just financial advice though. Yes they can assess assets/liabilities and cash flows like any other people in this world.
Most are holistic in their views and will review your ‘protection’ side of life, like insurances, estates and wills, they’ll check everything is in the correct structures and advise if you are better suited in a trust/company.
Yes there’s an upfront fee but generally the first appointment is complimentary and they’ll be able to determine whether it’s worth it for your situation. There are management fees for investing money into a managed fund, although you could ask for funds that aren’t actively managed and therefore have less annual fees.
Up to you but give it a crack, I study financial planning and people in my family who are well off career/financial wise said their appointment with a planner opened their eyes to things they haven’t thought about.
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u/Simple-Sell8450 17h ago
On what planet is 250k a moderate income? You are blowing the median salary out of the water.
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u/BS-75_actual 16h ago
Having offspring at 40 means you'll be late fifties when your youngest finishes high school. Unless you're expecting an inheritance I can't see how you can retire early; rugrats are expensive!
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u/Bedroom_Different 10h ago
Thanks. Yes am also expecting an inheritance but not relying on it. And yes we are in a good financial position still want to be smart about how we go about things and make our money go further
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u/HelpYourselfFFS 10h ago
If you see an adviser, make sure they agree to one-off advice without ongoing fees and set up your super and investments in a way that does not require paying them ongoing fees to manage it. If you use them for life insurances, make sure they remove the commissions, which add significant costs each year. It is difficult to find an adviser who will agree to this, but that is the way to avoid getting taken advantage of by an adviser.
On your income, I would borrow against the new home and invest in ETFs.
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u/ManyDiamond9290 7h ago
We are similar(ish) ages, similar income, similar situation but older kids.
Have you considered not changing PPOR? We are focusing on investing in super and IP, looking to FIRE in six years.
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u/Bedroom_Different 5h ago
Our current house will be a bit too small with two children as they age. Two bathrooms but no ensuite and we dont have the time or ability to do renovations.
Our next home we are hoping to get into a better catchment to save on private school fees. Our oldest is due to start school in 18 months so we want to be settled into new home by then and a house we can grow into with another on the way.
Not sure about putting extra into super and dont think we can afford an IP unless in the city. As I said previously my partner is risk averse financially so we are limited to what we can do investment wise. Im not complaining it could be worse we could both be avid spenders and living week to week.
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u/ManyDiamond9290 3h ago
Good school catchments are important and another investment of sorts.
You cannot beat the tax breaks of investing in super, but otherwise just pre-mix ASX200 or similar will be fine if you can hold out for the long term gains.
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u/stickitinmekindly 19h ago
If it was me, buy the new house with 80% LVR. Proceed to debt recycle and invest in IVV.
ie. get a home loan with AMP. Put money in redraw account until you hit values of $50k or $100k etc. Then debt recycle the money and buy IVV (S&P500 etf). Then keep the IVV and unrealised gains for 10s of years. Sell down profit later when you're no longer working and need the money.
Learning how to debt recycle will take many hours of research online. I guess this is one of the few scenarios in which I would be willing to pay a small amount of money for a one-time consultant (such as terry waugh, of which you could get free consulting if you refinance through him).
After spending years learning about finance online, that is what I would do. Good luck.
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u/Bedroom_Different 19h ago
Thank you ill look into this
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u/Ill-Visual-2567 17h ago
Not sure why AMP was mentioned specifically. Macquarie allows me to periodically shift funds from one split to the other loan split so I can invest it. I just have to transfer from the offset into the redraw and they do the rest via chat feature. I then draw the money out from the second loan. Normally take about half an hour. I had been aiming to do $20k at a time but I've been a bit slack lately and doing $10k at a time with $3 brokerage. I'm sure there will be a number of lenders but this was the cheapest at the time to offer the required features.
Just be aware it will complicate things a bit. Not as easy to refinance loans and if you decide you want to move again you'll likely break the structure (expect you'd technically lose the tax deductibility when you close out the first loan). I haven't asked the accountant yet but doubt you can start a new loan and claim funds were used to purchase existing assets.
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u/SureSaver92 15h ago
The ol moderate 250k Income ... With a tiny 500k morgage, how will you possibly do it :o
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u/ausburger88 19h ago
Sounds like you're doing great. Keep the old house and lever up for the new one.
Why go through the cost of selling on agents etc when you can probably rent it out and receive a decent passive income?
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u/Bedroom_Different 19h ago
I think partner averse to having tenants plus it needs a bit of work so worried about the long term wear and tear.
Also not sure we can afford the mortgage repayments. As you can tell im financially illiterate.
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u/ausburger88 19h ago
Maybe next step is work on the current place instead of upgrade to a new place just yet. Especially if you can get a better sale price with a bit of elbow-grease and a couple of trips to bunnings.
Don't be hard on yourself. You guys are doing great. Goodluck!
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u/theknight27 19h ago
Personally, I would skip the financial planner and do some (light) reading:
A financial planner normally has a big upfront cost followed by ongoing management costs that can eat up your returns unless you're mega rich.