How to Invest in Australia

Now you're debt free, you've saved up some cash and you want to know, "How should I Invest my money?"

There are many options but after years of research, from fundamental and in depth value research I have in the end accepted the most tried and tested truth. It's not worth the effort to try and beat the market.

My strategy?
Regular savings into exchange traded index funds. They are a basket of shares that track a certain index, for example the ASX 200 in Australia or the S&P 500 in the USA. They give you broad diversification, market average returns and for a very low cost of between 0.05% to 0.25%. The brokerage cost of getting this diversification is much higher than the ongoing management cost.

How do I do it? I first figure out how much I can save to invest for the year,  then every 3 months I put the same dollar amount into my ETFs of choice.

For example, if I want to just invest in Australian equities and I know I can save $20,000 per year, then every 3 months I will buy $5,000 worth of VAS, which is the Vanguard ASX300 ETF.

This is also known as dollar coat averaging, so when the market is high, I get fewer shares for my money, when the market is low, I get more shares for my money.

The goal? I want to accumulate as many shares as possible so the income funds my expenses so I can retire. Therefore, I would prefer the market to crash so I can accumulate more shares. Think about it, if I wanted to buy assets that pay me $30,000per year, would you rather spend $300,000 or $600,000 to buy the asset? Therefore, price is irrelevant unless you wanted to sell that asset to purchase another, so why buy it in the first place?

This strategy allows you to accumulate more assets over time and allows compounding to work it's magic, you get good long term returns and it allows you to rest peacefully as a market crash works out good for you in the long run!

Let me know if you have any questions.

Peace.