Have just finished reading Money Secrets of the Rich by John Burley and would like to put in place the 7 steps to financial freedom. My question relates to the Automatic Investment Plan and the best way to set it up. We have had managed funds before and are not a big fan. Does anyone know if it is possible to set the AIP up to buy direct shares. Has anyone had experience with the AIP and the best way to set it up.
Thanks for your help in advance.[biggrin]We read John Burley a year or so ago and immediately put the AIP into action (actually we had already started something similar).
There are a couple of ways of approaching this.
1. Hire a stock broker and set up an AIP through him, giving him directions as to which shares to buy along the way.2. Do as we did – I have a set amount deducted from our working account each week via an ING account and their ‘automatic savings plan’. Once the ING account reaches a certain level and I have identified shares I want to buy, I use the ING savings to buy a parcel of shares via the internet brokers (much cheaper).
(eg – I bought realestate.com.au shares last year. They have mnore than doubles in value in 6 months, which beats any managed fund by miles!)
If you are confident in dealing directly in the share market, it is a system that works well for us.
All the best in your 7 steps!scotty3
PS I live in Sydney and run a small group for people interested in wealth creation. We actually based a lot of our meeting topics last year on John Burley’s 7 steps as well as some Steve McKnight stuff.If that is of interest, send me a PM and I’ll give you details.
I bought realestate.com.au shares last year. They have mnore than doubles in value in 6 months, which beats any managed fund by miles!I was going to thank you for the heads up and start shorting REA, but I notice they’ve fallen from a high of $2.20 on 10/02 to $1.40 today. I guess I’m too late!
Cheers, F.[cowboy2]Thanks Scotty
I think we will go with your way of thinking.
How do u find ING and what interest rate do they offer along with a minimum balance. Did you find that your AIP is working along with the other steps in the book.
Cheers.I use ING and am very happy!
Cheers,
Simon Macks
Finance Broker
[email protected]
0425 228 985Comments may not be relevant to individual circumstances. If you intend making any investment, financial or taxation decision you should consult a professional adviser.
With ING can all your transaction be completed online through internet banking.
Cheers MJW[biggrin]Hi MJW,
We too had a sort-of AIP going before I read John Burley’s book and then we refined it and have followed his methodology for the last 2 years. I just use a Vanguard diversified index fund (which has gone up very nicely thank you in the last year) and do automatic BPay payments on the 1st of each month for 10% of our gross income.
Then another 10% of our gross income is added to our minimum PPOR mortgage payment. The other 10% of gross is for charity but we are tracking at 3-4% until our mortgage is gone.
John points out that if you educate yourself about an asset class or investment opp, know about it and have a strategy to earn 15% + returns for it then invest in it, but if you have the “buy, hold and pray” or pure speculation method then he does not regard that as investing and recommends for your AIP you are better off just using an index fund for the lower management fee and because you will simply earn the index return and you can’t do any worse than any active fund manager 2 out of 3 years at a time.
So, if you do have a strategic approach to direct shares and can earn 15%+ consistently go for it.
With any AIP he then recommends you take that as it builds up and invest it in the niche you have chosen which must earn a min of 25%. So our Vanguard fund builds up and is converted into property as we go as part of our “Level 4 and 5” strategy and that strategy has to deliver 25% COCR.
Hope this helps….
skippygirl
Thanks skippygirl,
Sounds like you have a great plan for the future.
Thanks for the advice. Our passion is real estate as well.
Cheers MJW
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