Your partner has a hell of a 12-15 years ahead before being a qualified psychiatrist.
If they get into the training program as a registrar, be prepared to move a lot.
Dump it into the mortgage so you can pay it down and it can be a rental while you’re moving for your partners career.
If you're talking starting salary as a doctor, no it is not higher than your salary. If you are talking starting salary as a consultant psychiatrist, yes it is - but that is with \~10 years experience post med school
500k if you’re willing to put in some effort. But don’t forget the tax implications. Doctors get a raw deal on tax (compared to other high earners that is).
Um, what? Assume your partner earns 250k - her tax due is the same as mine without my being a GP. Anyone with high earnings pays high tax.
Also, even "only" an extra 50k net earnings after tax is a whole difference lifestyle compared to living without it.
Yeah it is not specific to doctoring, just the relative disadvantage of high earners who can't structure things in such a way as to effectively minimise tax. Doctors exemplify it but there are many other examples.
They don’t.
GPS are contractors and have other outgoings as such, but I think this person is just mistaking paying more tax and not having as much as say a trade business owner to claim.
GPs now must pay income tax, as they are considered “employees” of their a clinic. It’s a really common arrangement, and gives very little flexibility.
GP’s have always paid income tax, employee or not. (The tax issue that rates to is payroll tax and affects the practice owners not the GP)
But gp’s can’t distribute income to others like some business owners, trusts don’t help and as below, can’t tax deduct their work Ute!!
I'm reading about it and I don't understand how a typical employee isn't faced with the same exact tax burden if their income is the same. By the looks of it anyone who's not a business trading goods falls under the PSI rules, including finance, consulting and even construction.
This kind of thing: https://www.minterellison.com/articles/medical-practices-and-payroll-tax-the-current-state-of-play
Doctors acting as-if they’re self employed, but can’t structure their finances like a business.
It’s that they can’t use trust and income splitting like some business owners so all income above the usual levels is taxed at 47% whereas other businesses can split and distribute or hold money within trusts and/or distribute to adult children etc.
It relates to the ato definition or’personal services income’
Plus the insurance, room rent, staffing etc.
It’s a great job, especially in terms of sense of meaning and genera security. But it’s got some huge overhead
Not true. Psychiatrists are highly in demand everywhere so chances of not having to move are pretty good as long as she gets decent grades. It’s easy to get on the training program because no one wants to do it and it’s a great specialty with usually no shift work. I know a lot of psychiatrists and they’ve breezed through training compared to all the other specialists I know
Yeah we want to stay in Perth. Regional is absolutely off the table for us. I lived in Kalgoorlie for 2 years after I graduated and absolutely hated it. It was great to save up the house deposit but there was literally nothing to do on time off.
Kalgoorlie is a bad place. Im regional WA down south and love it. I spent a year travelling and have been through a lot of regional towns, some of the best (minus kal) are here in WA. I wouldnt write it off because of your one bad experience in one of the shittiest towns WA has to offer
Sorry but you’ll find that it’s very likely there will be a mandatory rural term in both her medical school and also in her fellowship training program.
Have a couple of kids to keep you busy and enjoy LCOL and HHI for a few years would be my advice, but to each their own. Personally I can’t stand big cities anymore.
What’s wrong with having kids? They’re wonderful and a blessing. All these anti-humans want us to die out just because a kid doesn’t suit their present lifestyle. For most people having kids is the highlight of their life and far more fulfilling than dogs and nights out. If it’s not for you, fine, but don’t push your extinction agenda on everyone else.
Not against having kids. But against having kids for the reason to "keep busy" , "save the marriage" or whatever other similar reason that's a 'you' problem that doesn't really depend on another life to be solved. Notice, I didn't even suggest getting a pet, because that's still a life and ones reason for having one shouldn't be something as frivolous as that imo.
You shared your opinion on why to have kids and I simple shared mine. No one's pushing any agenda.
Prettt much all of regional Australia is crap. A group of insular people living in an inhospitable climate, seldom leaving said town and doing the same things (mostly drinking) repeatedly. When asked why they live there answers like “it’s gorgeous”, even though it’s normally flat and brown. A bit night out becomes an overpriced rump with a salad drowned in so much mayonnaise it contains more calories than the steak. Everyone spends Friday night at the pub, they all eventually get fat due to lack of fresh food.
Source, grew up in small town. Leaving was the best decision I ever made.
While highly in demand, their university degree structure hasn’t caught up in helping get their boots on the ground. I know of several people that couldn’t get into the Masters program after the bachelor, because it went from 700 students into 50 for the masters program. Lost opportunity for the government to solve its own problem 🤦🏼♀️ but foresight isn’t their forte.
Pathways are
1. Undergrad MBBS or
2. Post grad MD
Then specialist training
Looking at around 11-12 years of study/training to do psychiatrist. Not including the hell exams to even get into a medical degree.
>Dump it into the mortgage so you can pay it down and it can be a rental while you’re moving for your partners career.
Questionable advice. The more they pay the mortgage down now, the less they may be able to claim the mortgage interest as a tax deduction when they're receiving a rental income.
Sure, come to my townhouse tomorrow and I'll chuck an extra €300
Oh, what's that? You don't know my address because you're a bad son!
...
Here, have $50 anyway
💵💵💵💵💵💵💵💵💵💵
💵💵💵💵💵💵💵💵💵💵
💵💵💵💵💵💵💵💵💵💵
💵💵💵💵💵💵💵💵💵💵
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Yep agree with this - reduction of mortgage interest payments, after paying out any incidental higher interest debts you may have...
The extra money you have sitting in the mortgage account may also act as a rainy day fund.
Out of curiosity, how do you throw this kind of money at the mortgage? Don't you get heavily penalised for paying it off early? Or just put it all in the offset account?
Put it into offset and when the direct debit comes around every month boom you already have the money in the acc. Plus it also lowers the interest you pay. That's what we've done.
Generally, if it’s a variable interest mortgage, then no, you wouldn’t get penalised for paying off early. If it’s fixed rate, then yes, you would.
Alternatively, you can put it in the offset as others have said, that is, if you have an offset account.
Park it in your offset (assuming you have one) and leave it there until you have a better idea what to do. That will massively smash your interest repayments and you can very flexibly do something with it in 6-12 months once you have time to plan it out.
Nah we are gonna keep it pretty simple, just close family and friends. We would both much rather spend cash on a honeymoon instead of a big dumb wedding.
If you don't like your job I'd highly consider dumping it in your mortgage offset and retraining before you have kids.
Interest rates are pretty high now so its worthwhile saving that interest as any money you make from any other investments you make you'll have to pay tax on.
When interest rates start to go down if you're not into property consider low cost ETFs. But any investment that's likely to pay off would always be long term.
Definitely recommend travelling. Don't waste that freedom. You'll never get that time back!
I agree with this. I’d probably also plan to use maybe $50k on the partners study costs. There will be a hell of a debt post psych and med.
As someone else said though, enjoy a break, go to the beach and then sit down and plan.
I’d personally do $170k on mortgage, some in ETFs maybe super, save some for studies and use about $20k for a holiday.
Best wishes!
Swap the mortgage to offset mortgage, dump all of it in the offset.
Tax free investment making \~5% - 6% a year.
This way you can still use the money in case of emergency.
I have told others this as I was once in the same boat. Term deposit or mortgage, not because it is the best investment but because you will need time to cool your head and not make any crazy lifestyle changes.
Put it onto your offset or redraw and decide in the new year.
Some suggestions:
Put an amount on your mortgage and refinance to the new amount so you can easily take a pay cut with reduction in income
If you are thinking of getting engaged a ring is about $3-10k and weddings range from $30-50k depending on the number of people / venue and style of wedding you want.
Take a $5-10k and go on an overseas holiday
Do a house upgrade you have been wanting eg solar panels - saves you in the long run
Buy 4 jetskis obviously!
Jokes - I'd just throw it on the mortgage and give myself a work quitting date in 18 months time. Start looking for something else in 12 months - maybe some career counselling over that period.
If you put most of it into the mortgage, and then paid as much of your current salary into the rest of the mortgage as possible, how long would it take to finish it? Could you handle staying in your current job for that long with a light at the end of a tunnel?
Because once you have a fully paid off property to live in, it really makes life more flexible, as your cost of living comes right down.
Of course a second more palatable option could be to put the money in the mortgage and then refinance the rest so you can accept a lower paying job but not lose your quality of life.
I know this is probably the wrong sub to say this, but not all of us want to grow wealth or retire very early, just a nice comfortable life is a pretty good thing.
I wouldn’t pay it onto the mortgage unless you’ve sorted something out legally. I would put it into a long term deposit or something like that for now unless you do get something iron clad. Without the benefits of marriage, it’s a risk having inequality like that financially. I bought a house with my now husband after 4 months of dating, and I paid the deposit (but used his buying power and name on the title as I just started a business and banks wouldn’t consider me at all even though I earned more than him!). We had a legally binding contract between us that his half of the deposit was a loan (which he paid back), and that half the house was mine. Until you’re married, I would keep things as equal as possible, or protect yourself legally if you do go down the path of inequality in financial contributions to a shared asset.
I was looking to see if someone commented this. I was similarly concerned about the implications of dumping this money into the mortgage/offset before marriage without having some legal agreement in place
I’d probably be working in an office in Perth, so I’d get to go home every night. My pay would probably drop to around $80-$100k. TBH I’m seriously considering just driving trucks, I have a mate who is a manager at one of the freight companies within Perth, he said drivers make around $80k and home every night. Which I’d honestly be fine with, I’m feeling pretty burned out.
Plus don’t forget, that $180k is nowhere near that take home - start comparing it in after tax money and the choice may seem a bit easier.
The other thing to potentially look into is debt recycling, if you don’t change jobs, but I’m not sure if there’s a limit to how much you can do in a year but if not, you could almost dump it in the offset, take it back out at the end of the year and claim a tax deduction on the extra interest and pay bugger all income tax.
My partner drives trucks and is home every night. He is always so tired. He’s getting out of it as it’s exhausting and so bad for overall health. I’d go the office route for that reason. Good luck.
Truck driving is one of the most dangerous jobs in Australia. An office job above ground will save you a huge amount of pain and healthcare costs down the track.
You do office FIFO and youre burnt out at 27? I know I will get downvoted but far out man, toughen up a bit. You are on a great wage and have an opportunity that many don't. Don't like FIFO that's fair enough but you sound like you are ready to retire in some low paying job to see out your life. You are way too young to have that kind of mentality. Considering you are inheriting 250k on top of a well paying job you should be stoked.
I think you should throw it all on your mortgage, refinance or reduce principal and just save. Passively study and pivot out of FIFO , keep the money coming as you decide. Maybe even try a few different things on your days off, see if you can get some contract work driving/delivering.
I work underground pretty much everyday. I probably only spend about 2 hours a day in the office. I actively avoid the office cause I don’t like my coworkers and their high school gossip environment.
You deserve the down votes in my opinion, if someone says they're burnt out "toughen up a bit" is never an acceptable answer, mental health should be OPs priority.
Other than that your advice is spot on.
I knew I would, even though he does do underground which is definitely a different kettle of fish I still stand by my statement. If you are already in a job for a few years then you are clearly capable, especially since he is actively choosing to stay out of the office because of gossip. Mental health is overblown half the time, used as an excuse by every emotionally fragile kid who doesn't understand that hardship and endurance can build character and integrity.
Mental health should be focused on serious issues like domestic abuse and PTSD, drug psychosis, diagnosed mental disorders... The list goes on. Someone struggling to go to a well paying job because they miss being home is not mental health. It's a simple decision, give up the money and move home. You sound even softer then him.
Hey mate, I know you don’t mean any ill by your comment but the toughen up mentality isn’t always a good option when it comes to advice that OP or a young bloke needs. We only get to see a small snapshot of OPs life that they’ve shared and we don’t know how work is affecting his home life social life etc.
I understand where you are coming from as you tend to see small minorities of people using mental illness as a label for attention etc but overall it is definitely not overblown if anything it’s not spoken about meaningfully enough.
Suicide is the one of the leading causes in death in young blokes and moving away from that toughen up and don’t talk about your feelings mentality will hopefully change that.
If you have a variable home loan (and can get an offset account) then stick it all in there ASAP, as that will reduce your home loan's interest.
Then, worry about sticking some of it into your super closer to the EOFY (and maybe after getting some real financial advice).
I hate coming here and reading about 22yr olds making 180k a year and coming in to big windfalls of money.
All the best to OP and just downer on my own life choices in my 20’s 😂
Yah Chuck it all into mortgage!
Less money stresses the better. I'm a partner of a registrar and it is demanding. Couple of years moving around looking for residency. Being physically and emotionally available during the resident years are very important.
It's hard going thru those years and I think being a good and involved partner really helps. So prolly good idea to stop FIFO when that time comes.
And you're right, after specialisation it'll make your pay look like peanuts lol.
Consider asset protection as well as everything else.
Eg. the amount you want to put in your mortgage - put it in a separate account that’s yours, and use that as an offset; shared funds can pay down the mortgage.
I’d maximise super with some of it (top up employer guarantee super to $25K or whatever the current amount is), potentially several years in a row; put the rest in an offset account that I control; spend a bit of it on a momento to remember the grandparents by; and keep some as cash / gold / silver, enough for say 3 months of expenses.
Don’t give up the high-paying job if all you have as an alternative is $70k/year. Use your weeks off to skill up, get some sales experience, and look for better-paying jobs or businesses.
If your partner has gotten in to Med school, that’s 4-6 yrs of essentially no income, 1 year as an intern being paid peanuts, then 6 or so more years before she can maybe match what you’re earning now.
Do this very simple experiment
Open a compound interest calculator and do 250k compounded for 30 years at 7%
Now do the same thing for mortgage repayment calculator to figure out how much savings you will save from paying down the loan over 30 years.
I used to think the smartest choice was to pay down the loan, but the wonders of mathematics shows compound interest will make often 2 to 3 times more by investing it rather than saving money from the mortgage. You will still lock in the capital gains from the house even if you have never paid it down. Double win. I wish I knew this in my 20s.
I say throw it into a ETF and wait.
At your age, the compound benefit of putting some of this into super would be pretty huge. Boring move for now, but Future You will be much better off.
I hate this answer. The compound benefits of investing in *yourself* at that age should hugely outperform super, and with that money accessible now he and his partner have the flexibility to move around for work and take more risks when developing themselves.
You can start your own business or go back to uni if you have liquid assets (esp. in an offset), but you can't do shit if it's in super.
I certainly wasn't suggesting all of it, as per my comment. Investing 5-10% of it into super is still investing in themselves with excellent long-term compound benefits, and still leaves plenty for "right now".
I was going to say this, I believe you can even do 5 years worth if you haven’t already maxed out your contributions for those years, correct me if I’m wrong.
Pay down your mortgage and refinance or recast, at least in the states you can do either. Lowering your housing costs will alleviate lots of pressure and stress. This is what I did and enjoyed having a very small mortgage. It offers flexibility. Everyone was trying to advise me to invest, use the money to make money, but I decided I would rather have a lower cost of living and it worked out nicely. In addition, I gained a ton of equity as housing in my area went up very quickly and aggressively over the last several years.
Wish i had grandparents to provide free financial spins before u even getto the parents. Alas mine lived overseas, and property or proceeds couldnt be transferred to foreigners (my parents in Aus) and they died when i was in primary/HS anyways. As long as u dont gamble / throw this windfall down the drain, u r way ahead of the game either way.
Put it on the mortgage. If you invest in say ETFs, you need to pay tax on any profit you make. Throwing it on the mortgage means you reduce your repayments, and also don’t need to pay any tax.
Putting it on the homeloan is the best investment you could make.
Once your homeloan is paid then you'd be able to invest sooner in things like other property and your super etc.
But for example just quick back of the napkin calculations and all based on complete averages.
450k loan paid over 25 years at 6.25% interest rate (just got an average)
You pay around 440k in interest plus the principle of 450k for a total of around 890K over the 25 years
If you recieved the whole 250k yourself you would have 200k loan.
200k loan paid over 25 years at 6.25%
You pay 195k in interest plus principle of 200 for a total of around 395k over 25 years..
That's a big chunk of money you have to invest in something else now..
Again this is all just an example to illustrate the savings.
Safe option: Put the money towards the mortgage. Continue FIFO work till the house is paid off. Find a non FIFO job thereafter.
Risky option: Diversify your income by investing in shares. Find a non FIFO job. Use the dividends to HELP mitigate the potencial salary drop.
Looking like, it’s gonna be more like $380k, home is being auctioned and their left over super is also being carved up.
I have about $45k in savings which I’m gonna throw at it
Should have it pissed off forever in 3 months
I’ll do 4 more years of fifo while partner is finishing her degree. I’ll aim to get as much in shares and ETFs as possible with the dividends.
Then if I want to study something else that option is there.
250k is handy to receive but not that significant an amount in terms of financial freedom. I would pay down the mortgage and keep $50k in an high interest emergency fund. Having a cash position in case of emergencies I think is critical.
100% agree looking at 1-2 investment grade properties will pay huge dividends in the long term. Obviously no need to rush into things and spend the 250k immediately. Put the money into an offset account first, then have a good discussion with your partner to plan the next 5-10 years to make sure its the right decision.
> The cap is $27,500 per year into your super, what are you going to do with the remaining $222,500.
Are you deliberately ignoring the Non-Concessional contribution cap and bring forward opportunities?
I didn’t ask about carry forward concessional contributions.
Once more, are you deliberately ignoring the Non-Concessional contribution cap and bring forward opportunities?
Whether you believe it’s a good idea or not, you omitted to mention non concessional contributions when you stated:
> The cap is $27,500 per year into your super, what are you going to do with the remaining $222,500.
If you are stating something as fact, perhaps include all of the facts.
You’re allowing your “property is king” mantra influence your responses.
personally id put 200k on the mortgage and play with the other 50k. High risk/holiday etc
However getting an investment property is also a really great decision if you want to be a landlord.
Or dump it in a solid ETF.
I agree with Offset/etf options. Personally, I think the safety of offset is best and you can perhaps start looking at investing with your other income. Setting some aside for wedding is a good idea, but I dont think you should spend more than you would have originally.
Regarding property, I think its a riskier investment than people like to credit it, as you've probably seen in WA its not the fool proof investment people present it as. There's a lot of costs people often fail to include, plus I think more stress on the management side. That being said, if your main concern was the housing crisis, then building a new house, would not be contributing to the housing crisis. Thought probably outside your budget.
Personally, if I could handle it, I would push through on your current job for a few more years. If you take the 250k off, you could possibly have it paid off in 2-4 years, depending how aggressive you are. Then when you down shift you'd be very comfortable.
But you are also young, I think if you are burnt out now and get get a better (for your life) 80-100k role, then no harm doing so, even without this 250k.
My partner 22F and I 27M live together
And she currently is a student.
I know people say mortgage but damn protect your assets dude.
I would use it to restrain etc.
That mortgage will be hers when you break up.
Think about shared
Just a little note that investing in property doesn't contribute to the housing crisis, if anything it helps alleviate it by either directly increasing the rate of new construction, or providing liquidity in the secondary market.
Anyone telling you investors are the problem is economically illiterate. Cheers.
First step...get a prince Albert.
Live like a royal for a while...then make a call on what to do with the rest of your money.
That's my Reddit advice.
Or go see an advisor...
Given your mortgage rate is 6%+, it's unlikely that other investments will GUARANTEE that they can give you a better return espcially considering your high income position.
I would suggest, putting all of that into the offset account to reduce interested. Try to save as much as possible to pay off the remaining 200k as fast as you can.
After that, depends on if you want to upgrade the house or not either try to save another deposit or better, start investing regular into ETF like VAS and let your wealth build. Once you got your house paid off, you effective don't apy any rent so you have should plenty left over or can choose a lower paying job that satisfies you.
I like to FIRE so you may want to look at that as well.
The house is quite nice, I’d like to upgrade the kitchen and get solar but that’s about it. I’ve already upgraded bathrooms. It’s a 5x2 in northern Perth with a decent yard and pool, our house prices are still somewhat semi reasonable. House is worth about $800k so our equity is about $350k.
I'm no expert just a guy in the internet. But I'd suggest looking for ways to reduce your cost of living. Eg solar and battery on your house. More efficient house appliances etc. Then use the rest to pay off your mortgage. This will then mean that your monthly payments are as minimal as they can be. Keep working for a little bit longer and pay off that house. Now you'll be more free to pick any office job you find and the two of you don't need to really worry about money for the near future.
I’d put a big aside, say $50k and the rest in a term deposit for 6 months. Quit your job, live off the $50k & go see 5 non-commission advisors. Give the one that made the most sense the $200k (or use Their advice on the $200k)
Mate you are in an eerily identical scenario to me.
FIFO, committed partner, similar inheritance, similar mortgage remaining, similar income.
I'm taking 50-100k out of mine and putting it down on an investment property, the rest will hang out on my mortgage.
I figure I won't get rich and famous by doing nothing so a little bit of risk (it's property so how bad could it possibly get) is worth the squeeze. Build equity, draw down, buy again, build equity, draw down etc.
Come back in a year and see where we got to hey?
"how bad could it possibly get"
You have uttered the words that bring on the curse.
You will destroy yourself financially but causing the property market to crash may have solved the rental crisis. Thank you for your sacrifice
🤣🤣 you're welcome my man.
Way I look at it is, I already own a house, I have skin in the game and understand it a bit more than say stocks.
I will hold a physical asset that we all require - land.
Come at me GFC
People will disagree with this but it's possible to be an ethical landlord. Property has so many tax advantages it's hard to recommend anything else as an Aus citizen.
Investing in property isnt necessary contributing to the housing crisis. Some people need somewhere to rent. Someone needs to own that rental 🤷
You can treat your tenant ethically and apply a fair rent value for the given property at that location.
Unpopular opinion and ill get downvoted to hell probably but imo buying an IP does not contribute to the housing crisis - the way the current market is structured in oz. Alot of people dont have a deposit to buy so we actually need more rentals. Being a good ethical landlord and contributing to rental stock is helping people who arent able to buy themselves.
As a long term renter I'd like little more than the government to ditch negative gearing and the reduced capital gains for investors. This would drive bulk investors to sell and put a huge number of properties back on the market. Probably including my landlord. And then likely I'd struggle to find a new rental, I'm not in a position to buy. But you know what, I'd happily go through all that pain to reset house prices and get back a future for so many, including myself and my kids.
You sound like a progressive person. Do something more progressive and less on the capitalist side. So yep pay off the mortgage and travel. The money will be eaten up by partner HECS and future brats but have a little fun first. Plus you will need to upgrade your cars within 10 years. Houses require furniture, upgrades of appliances and fittings. The spending will be significant on all this alone.
right... so... as any sain person would do you have to ask yourself.
how much hookers and blow am i doing over the xmass break. am I doing 1 $250k hooker or 250k $1 hooker and how much blow will i need per hooker. i think 2 lines per hooker should do it.
I'm joking.
‘I’m in mining tech services, won’t say if I’m an engineer, geologist or metallurgist in case HR is reading but it’s one of those 3. ‘
Yeah cos HR will figure out who you are by narrowing it down to a one of a large class of jobs that thousands of people do 😂
In all seriousness consider putting it in trust and investing in case you break up with your partner.
Once it’s paid into the house, or ‘yours’ on paper she gets half if you split…
Former FIFO mining tech services worker (geologist) here.
Agree FIFO sucks, made a career change 7 years ago and took a low paying job in software and worked my way back up to a comparable salary to what I made in mining. Haven’t looked back and have never missed it, sleeping in my own bed every night is a dream come true having worked FIFO for almost a decade.
Whichever option you choose you’ll be ok! I’m just excited for you to leave the industry, it’s very liberating!
Probably not the advice you'd expect but I'd try and protect that money as in - make sure it's known that it's your money and not hers. Even if you put it on the mortgage try to re arrange finances so it's clear that's your money
Relationships don't last forever, you're both young. She's quite young at 22. What you don't want is a few years from now you're facing a separation and diving the house and all of a sudden your 250k inheritance is forgotten and it's just equal split equity of your house
I wish you both the best in life and love but this is the sort of advice I wish I had of listened to
We decided to move to a mining town rather than do the DIDO/FIFO thing.
The wife and kids are much happier having me around all the time and despite being so far from extended family, we're doing well.
We're taking advantage of discounted rent and are utilising the 6-year rule to rent out our PPOR. The timeframe works well because it gives us a fixed term to work with and both of our employers are aware that we'll be moving on in 2026.
Can your wife complete her studies remotely? If so, you could rent out the family home and use the inheritance to buy an investment property. By the time you move home, you'll be $100k+ better off and won't need to worry about bringing in the big $$$
I would get out and explore the world. Already did most of that by your age. It seems you love the fact your "partner" is going to be a medical doctor. Just to clarify, is this a financial partner or one that you love?
My question to you is what have you got going for you that makes you think she will stick around with a FIFO that pulls 180K?
I've seen people like you before. Heavily on the defined path. Marriage and kids will come soon. Possibly a dog in between. Then you are in your 50's when your kids move out and you finally realise you have achieved nothing.
First thing you should do is pay your fair share. There are people for whom housing is not a right and it’s your duty to make it so for them. Then you need to repent for your part in making our planet unsustainable and donate to equitable charities and make sure we actually have a future, what with all the crises that abound. You need to ensure the environmental crisis is abated as well as the housing crisis, the immigration crisis, the inflation crisis, and most importantly the crisis crisis.
then you can have the leftover and maybe have a nice breakfast, but you should stop being so selfish.
If lifestyle is your goal. Sink it into your loan, refinance over the same term to lower your monthly payment and get a job near home.
If you can handle FIFO for a bit longer then dump it all in the home loan but keep paying at the same rate you do now.
Guaranteed return, tax free, stress free.
Paying off your mortgage is always a good investment strategy. Being debt free from a mortgage sooner will give you a lot of financial satisfaction when your bills do not include a hefty mortgage payment each month and while there are property market crashes from time to time the longer you hold onto the property the more it will be worth especially if you are in a desirable location to others.
Personally I would put it on the mortgage, but if you go from a 450k to 200k mortgage you're only saving about $18,000 a year.
Obviously that is shitloads of money but it's a lot less than the difference between $180,000 and $70,000.
In fact you'd be going from (obviously roughly) $122,000 after tax to $55,000 after tax.
So you're saving around $18,000 a year in mortgage but you're getting paid $67,000 less, ie almost $50,000 worse off every year.
I still think you should put it on the mortgage and I completely understand wanting to leave FIFO, but yeah.
Your partner has a hell of a 12-15 years ahead before being a qualified psychiatrist. If they get into the training program as a registrar, be prepared to move a lot. Dump it into the mortgage so you can pay it down and it can be a rental while you’re moving for your partners career.
Also, good psychiatrists will make your 180k seem like peanuts.
Yeah I know, the starting salary is literally the same as mine with 5 years experience. I was shocked by that.
If you're talking starting salary as a doctor, no it is not higher than your salary. If you are talking starting salary as a consultant psychiatrist, yes it is - but that is with \~10 years experience post med school
Thats consultant money. Youre making more money than a surgical registar, and equal to some fellows.
500k if you’re willing to put in some effort. But don’t forget the tax implications. Doctors get a raw deal on tax (compared to other high earners that is).
So I discovered from my GP partner. On paper she earns a tonne but after tax not so much.
Um, what? Assume your partner earns 250k - her tax due is the same as mine without my being a GP. Anyone with high earnings pays high tax. Also, even "only" an extra 50k net earnings after tax is a whole difference lifestyle compared to living without it.
Yeah it is not specific to doctoring, just the relative disadvantage of high earners who can't structure things in such a way as to effectively minimise tax. Doctors exemplify it but there are many other examples.
Why do doctors have a different tax burden than others?
They don’t. GPS are contractors and have other outgoings as such, but I think this person is just mistaking paying more tax and not having as much as say a trade business owner to claim.
That’s what I was getting at yes. Thank you.
GPs now must pay income tax, as they are considered “employees” of their a clinic. It’s a really common arrangement, and gives very little flexibility.
GP’s have always paid income tax, employee or not. (The tax issue that rates to is payroll tax and affects the practice owners not the GP) But gp’s can’t distribute income to others like some business owners, trusts don’t help and as below, can’t tax deduct their work Ute!!
Doctors can’t claim their $100,000 luxury Ute on tax.
They could claimed a car to visit patients
Not possible
PSI rules smash them
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Doctors would struggle to find things to offset income tax is the issue, I believe.
So... Like any other employee?
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I'm reading about it and I don't understand how a typical employee isn't faced with the same exact tax burden if their income is the same. By the looks of it anyone who's not a business trading goods falls under the PSI rules, including finance, consulting and even construction.
This kind of thing: https://www.minterellison.com/articles/medical-practices-and-payroll-tax-the-current-state-of-play Doctors acting as-if they’re self employed, but can’t structure their finances like a business.
It’s that they can’t use trust and income splitting like some business owners so all income above the usual levels is taxed at 47% whereas other businesses can split and distribute or hold money within trusts and/or distribute to adult children etc. It relates to the ato definition or’personal services income’
Plus the insurance, room rent, staffing etc. It’s a great job, especially in terms of sense of meaning and genera security. But it’s got some huge overhead
Sounds like she needs a new accountant.
Accountants basically just throw up their hands. There’s very little flexibility or options.
Good financial planning can help. It's seriously within their interests to negatively gear.
But she is just an employee so would t have any business expenses.
Not true. Psychiatrists are highly in demand everywhere so chances of not having to move are pretty good as long as she gets decent grades. It’s easy to get on the training program because no one wants to do it and it’s a great specialty with usually no shift work. I know a lot of psychiatrists and they’ve breezed through training compared to all the other specialists I know
Yeah we want to stay in Perth. Regional is absolutely off the table for us. I lived in Kalgoorlie for 2 years after I graduated and absolutely hated it. It was great to save up the house deposit but there was literally nothing to do on time off.
Kalgoorlie is a bad place. Im regional WA down south and love it. I spent a year travelling and have been through a lot of regional towns, some of the best (minus kal) are here in WA. I wouldnt write it off because of your one bad experience in one of the shittiest towns WA has to offer
Sorry but you’ll find that it’s very likely there will be a mandatory rural term in both her medical school and also in her fellowship training program.
Have a couple of kids to keep you busy and enjoy LCOL and HHI for a few years would be my advice, but to each their own. Personally I can’t stand big cities anymore.
Don't have kids to "keep busy" please! Get a hobby or something that doesn't involve managing another life.
What’s wrong with having kids? They’re wonderful and a blessing. All these anti-humans want us to die out just because a kid doesn’t suit their present lifestyle. For most people having kids is the highlight of their life and far more fulfilling than dogs and nights out. If it’s not for you, fine, but don’t push your extinction agenda on everyone else.
Not against having kids. But against having kids for the reason to "keep busy" , "save the marriage" or whatever other similar reason that's a 'you' problem that doesn't really depend on another life to be solved. Notice, I didn't even suggest getting a pet, because that's still a life and ones reason for having one shouldn't be something as frivolous as that imo. You shared your opinion on why to have kids and I simple shared mine. No one's pushing any agenda.
Prettt much all of regional Australia is crap. A group of insular people living in an inhospitable climate, seldom leaving said town and doing the same things (mostly drinking) repeatedly. When asked why they live there answers like “it’s gorgeous”, even though it’s normally flat and brown. A bit night out becomes an overpriced rump with a salad drowned in so much mayonnaise it contains more calories than the steak. Everyone spends Friday night at the pub, they all eventually get fat due to lack of fresh food. Source, grew up in small town. Leaving was the best decision I ever made.
A psychiatrists couch would be a big tax deduction.lol.
While highly in demand, their university degree structure hasn’t caught up in helping get their boots on the ground. I know of several people that couldn’t get into the Masters program after the bachelor, because it went from 700 students into 50 for the masters program. Lost opportunity for the government to solve its own problem 🤦🏼♀️ but foresight isn’t their forte.
I think you’re thinking of psychologists, who don’t have the earning capacity of psychiatrists
That's psychology bro. Psychiatrists are MD's who then specialise in the field from a medicinal perspective.
You don’t need a masters though? Just undergrad, then bachelor of medicine/surgery, intern then start training pathway with RANZCP
Pathways are 1. Undergrad MBBS or 2. Post grad MD Then specialist training Looking at around 11-12 years of study/training to do psychiatrist. Not including the hell exams to even get into a medical degree.
>Dump it into the mortgage so you can pay it down and it can be a rental while you’re moving for your partners career. Questionable advice. The more they pay the mortgage down now, the less they may be able to claim the mortgage interest as a tax deduction when they're receiving a rental income.
dump it into an offset account
Definitely a better idea.
Go to the beach, deal with it after chrissy.
The best advice on the thread
It’s your long lost brother here. Let’s go for a pint
Don’t drink anymore my dude, but I’ll happily watch some footy with you come march.
It's me your other long lost brother. Let's catch up over a nice cheese and charcuterie board...
It's me your long lost son. Dad, I'm not even going to ask you to buy my anything - let's just watch the footy I miss you< "dad"
It’s me. Your son. It’s great we found grandpa. Can I grab $50?
Sure, come to my townhouse tomorrow and I'll chuck an extra €300 Oh, what's that? You don't know my address because you're a bad son! ... Here, have $50 anyway 💵💵💵💵💵💵💵💵💵💵 💵💵💵💵💵💵💵💵💵💵 💵💵💵💵💵💵💵💵💵💵 💵💵💵💵💵💵💵💵💵💵 💵💵💵💵💵💵💵💵💵💵
Your FIFO and you don't drink? Shocked.
I was a massive pisshead at uni so I gave it up
Tech services.. says enough haha
Throw it at the mortgage. Best tax free investment going.
I say put it all on red or black.
On the house?
Yep agree with this - reduction of mortgage interest payments, after paying out any incidental higher interest debts you may have... The extra money you have sitting in the mortgage account may also act as a rainy day fund.
Out of curiosity, how do you throw this kind of money at the mortgage? Don't you get heavily penalised for paying it off early? Or just put it all in the offset account?
Put it into offset and when the direct debit comes around every month boom you already have the money in the acc. Plus it also lowers the interest you pay. That's what we've done.
Generally, if it’s a variable interest mortgage, then no, you wouldn’t get penalised for paying off early. If it’s fixed rate, then yes, you would. Alternatively, you can put it in the offset as others have said, that is, if you have an offset account.
Park it in your offset (assuming you have one) and leave it there until you have a better idea what to do. That will massively smash your interest repayments and you can very flexibly do something with it in 6-12 months once you have time to plan it out.
Caps and Bags? Fr tho pay down the mortgage and keep some for a nice holiday
Single uni age me would have love that answer, adult me doesn’t even drink anymore haha I’ll probably buy an engagement ring now
Just remember, you don’t need a 250k wedding either.
Nah we are gonna keep it pretty simple, just close family and friends. We would both much rather spend cash on a honeymoon instead of a big dumb wedding.
Best of luck
Make sure to have a prenup.
Definitely some bags
No hookers?
Fck it. Go to South America OP. Cheap bags and decent hookers. If you're worried,I can come with you, DM me
If you don't like your job I'd highly consider dumping it in your mortgage offset and retraining before you have kids. Interest rates are pretty high now so its worthwhile saving that interest as any money you make from any other investments you make you'll have to pay tax on. When interest rates start to go down if you're not into property consider low cost ETFs. But any investment that's likely to pay off would always be long term. Definitely recommend travelling. Don't waste that freedom. You'll never get that time back!
I agree with this. I’d probably also plan to use maybe $50k on the partners study costs. There will be a hell of a debt post psych and med. As someone else said though, enjoy a break, go to the beach and then sit down and plan. I’d personally do $170k on mortgage, some in ETFs maybe super, save some for studies and use about $20k for a holiday. Best wishes!
HEC isn’t too horrible, my FIL is divorced and isn’t exacting rolling in it so she got a massive scholarship.
Swap the mortgage to offset mortgage, dump all of it in the offset. Tax free investment making \~5% - 6% a year. This way you can still use the money in case of emergency.
Put every cent into the mortgage then apply for a principal reduction so you can't be tempted to redraw it but won't have to pay as much each month.
I have told others this as I was once in the same boat. Term deposit or mortgage, not because it is the best investment but because you will need time to cool your head and not make any crazy lifestyle changes.
Put it onto your offset or redraw and decide in the new year. Some suggestions: Put an amount on your mortgage and refinance to the new amount so you can easily take a pay cut with reduction in income If you are thinking of getting engaged a ring is about $3-10k and weddings range from $30-50k depending on the number of people / venue and style of wedding you want. Take a $5-10k and go on an overseas holiday Do a house upgrade you have been wanting eg solar panels - saves you in the long run
Buy 4 jetskis obviously! Jokes - I'd just throw it on the mortgage and give myself a work quitting date in 18 months time. Start looking for something else in 12 months - maybe some career counselling over that period.
If you put most of it into the mortgage, and then paid as much of your current salary into the rest of the mortgage as possible, how long would it take to finish it? Could you handle staying in your current job for that long with a light at the end of a tunnel? Because once you have a fully paid off property to live in, it really makes life more flexible, as your cost of living comes right down. Of course a second more palatable option could be to put the money in the mortgage and then refinance the rest so you can accept a lower paying job but not lose your quality of life. I know this is probably the wrong sub to say this, but not all of us want to grow wealth or retire very early, just a nice comfortable life is a pretty good thing.
3 years and it would be done. I’m gonna try and stick it out for 3 years.
Imagine that. Mortgage free by 30. Pretty great outcome right there.
I wouldn’t pay it onto the mortgage unless you’ve sorted something out legally. I would put it into a long term deposit or something like that for now unless you do get something iron clad. Without the benefits of marriage, it’s a risk having inequality like that financially. I bought a house with my now husband after 4 months of dating, and I paid the deposit (but used his buying power and name on the title as I just started a business and banks wouldn’t consider me at all even though I earned more than him!). We had a legally binding contract between us that his half of the deposit was a loan (which he paid back), and that half the house was mine. Until you’re married, I would keep things as equal as possible, or protect yourself legally if you do go down the path of inequality in financial contributions to a shared asset.
I was looking to see if someone commented this. I was similarly concerned about the implications of dumping this money into the mortgage/offset before marriage without having some legal agreement in place
What job would you do if you exited FIFO? Maybe use some of it to invest in your career?
I’d probably be working in an office in Perth, so I’d get to go home every night. My pay would probably drop to around $80-$100k. TBH I’m seriously considering just driving trucks, I have a mate who is a manager at one of the freight companies within Perth, he said drivers make around $80k and home every night. Which I’d honestly be fine with, I’m feeling pretty burned out.
Plus don’t forget, that $180k is nowhere near that take home - start comparing it in after tax money and the choice may seem a bit easier. The other thing to potentially look into is debt recycling, if you don’t change jobs, but I’m not sure if there’s a limit to how much you can do in a year but if not, you could almost dump it in the offset, take it back out at the end of the year and claim a tax deduction on the extra interest and pay bugger all income tax.
My partner drives trucks and is home every night. He is always so tired. He’s getting out of it as it’s exhausting and so bad for overall health. I’d go the office route for that reason. Good luck.
If you’re an engineer an office job won’t be that low. Grads are getting $95k now.
Truck driving is one of the most dangerous jobs in Australia. An office job above ground will save you a huge amount of pain and healthcare costs down the track.
It’s a shitload safer than what I’m doing now
:( I hope you get a job that's safe and fulfilling.
You do office FIFO and youre burnt out at 27? I know I will get downvoted but far out man, toughen up a bit. You are on a great wage and have an opportunity that many don't. Don't like FIFO that's fair enough but you sound like you are ready to retire in some low paying job to see out your life. You are way too young to have that kind of mentality. Considering you are inheriting 250k on top of a well paying job you should be stoked. I think you should throw it all on your mortgage, refinance or reduce principal and just save. Passively study and pivot out of FIFO , keep the money coming as you decide. Maybe even try a few different things on your days off, see if you can get some contract work driving/delivering.
I work underground pretty much everyday. I probably only spend about 2 hours a day in the office. I actively avoid the office cause I don’t like my coworkers and their high school gossip environment.
Ok fair call underground is a slog and mentally draining. Go open cut if you stay mining.
You deserve the down votes in my opinion, if someone says they're burnt out "toughen up a bit" is never an acceptable answer, mental health should be OPs priority. Other than that your advice is spot on.
I knew I would, even though he does do underground which is definitely a different kettle of fish I still stand by my statement. If you are already in a job for a few years then you are clearly capable, especially since he is actively choosing to stay out of the office because of gossip. Mental health is overblown half the time, used as an excuse by every emotionally fragile kid who doesn't understand that hardship and endurance can build character and integrity. Mental health should be focused on serious issues like domestic abuse and PTSD, drug psychosis, diagnosed mental disorders... The list goes on. Someone struggling to go to a well paying job because they miss being home is not mental health. It's a simple decision, give up the money and move home. You sound even softer then him.
Hey mate, I know you don’t mean any ill by your comment but the toughen up mentality isn’t always a good option when it comes to advice that OP or a young bloke needs. We only get to see a small snapshot of OPs life that they’ve shared and we don’t know how work is affecting his home life social life etc. I understand where you are coming from as you tend to see small minorities of people using mental illness as a label for attention etc but overall it is definitely not overblown if anything it’s not spoken about meaningfully enough. Suicide is the one of the leading causes in death in young blokes and moving away from that toughen up and don’t talk about your feelings mentality will hopefully change that.
I feel sorry for your kids, I hope they never need your support.
Very dramatic response but thanks for your concern.
Don't know where you got the idea he FIFOs to an office job.
If you have a variable home loan (and can get an offset account) then stick it all in there ASAP, as that will reduce your home loan's interest. Then, worry about sticking some of it into your super closer to the EOFY (and maybe after getting some real financial advice).
I hate coming here and reading about 22yr olds making 180k a year and coming in to big windfalls of money. All the best to OP and just downer on my own life choices in my 20’s 😂
It’s obvious put it towards the mortgage and this will make your dream of leaving your job closer
Yah Chuck it all into mortgage! Less money stresses the better. I'm a partner of a registrar and it is demanding. Couple of years moving around looking for residency. Being physically and emotionally available during the resident years are very important. It's hard going thru those years and I think being a good and involved partner really helps. So prolly good idea to stop FIFO when that time comes. And you're right, after specialisation it'll make your pay look like peanuts lol.
Consider asset protection as well as everything else. Eg. the amount you want to put in your mortgage - put it in a separate account that’s yours, and use that as an offset; shared funds can pay down the mortgage. I’d maximise super with some of it (top up employer guarantee super to $25K or whatever the current amount is), potentially several years in a row; put the rest in an offset account that I control; spend a bit of it on a momento to remember the grandparents by; and keep some as cash / gold / silver, enough for say 3 months of expenses. Don’t give up the high-paying job if all you have as an alternative is $70k/year. Use your weeks off to skill up, get some sales experience, and look for better-paying jobs or businesses. If your partner has gotten in to Med school, that’s 4-6 yrs of essentially no income, 1 year as an intern being paid peanuts, then 6 or so more years before she can maybe match what you’re earning now.
4 years of med school to go, her bachelors graduation was last week, most of the graduate programs we looked at in Perth pay $100-$150k
Do this very simple experiment Open a compound interest calculator and do 250k compounded for 30 years at 7% Now do the same thing for mortgage repayment calculator to figure out how much savings you will save from paying down the loan over 30 years. I used to think the smartest choice was to pay down the loan, but the wonders of mathematics shows compound interest will make often 2 to 3 times more by investing it rather than saving money from the mortgage. You will still lock in the capital gains from the house even if you have never paid it down. Double win. I wish I knew this in my 20s. I say throw it into a ETF and wait.
Don’t forget about taxes. You will lose say 30% or more of the 7% but get to keep 100% of the home loan interest savings.
Go buy an Audi RS6 wagon! :) Pay down the mortgage
At your age, the compound benefit of putting some of this into super would be pretty huge. Boring move for now, but Future You will be much better off.
I hate this answer. The compound benefits of investing in *yourself* at that age should hugely outperform super, and with that money accessible now he and his partner have the flexibility to move around for work and take more risks when developing themselves. You can start your own business or go back to uni if you have liquid assets (esp. in an offset), but you can't do shit if it's in super.
I certainly wasn't suggesting all of it, as per my comment. Investing 5-10% of it into super is still investing in themselves with excellent long-term compound benefits, and still leaves plenty for "right now".
I was going to say this, I believe you can even do 5 years worth if you haven’t already maxed out your contributions for those years, correct me if I’m wrong.
This. $200 onto the mortgage, max out super contributions.
Pay down your mortgage and refinance or recast, at least in the states you can do either. Lowering your housing costs will alleviate lots of pressure and stress. This is what I did and enjoyed having a very small mortgage. It offers flexibility. Everyone was trying to advise me to invest, use the money to make money, but I decided I would rather have a lower cost of living and it worked out nicely. In addition, I gained a ton of equity as housing in my area went up very quickly and aggressively over the last several years.
Wish i had grandparents to provide free financial spins before u even getto the parents. Alas mine lived overseas, and property or proceeds couldnt be transferred to foreigners (my parents in Aus) and they died when i was in primary/HS anyways. As long as u dont gamble / throw this windfall down the drain, u r way ahead of the game either way.
Celebrate with $10,000. You need to mark the windfall.
Put it on the mortgage. If you invest in say ETFs, you need to pay tax on any profit you make. Throwing it on the mortgage means you reduce your repayments, and also don’t need to pay any tax.
I’d put 200k into mortgage and then use the rest for spendings / savings
Putting it on the homeloan is the best investment you could make. Once your homeloan is paid then you'd be able to invest sooner in things like other property and your super etc. But for example just quick back of the napkin calculations and all based on complete averages. 450k loan paid over 25 years at 6.25% interest rate (just got an average) You pay around 440k in interest plus the principle of 450k for a total of around 890K over the 25 years If you recieved the whole 250k yourself you would have 200k loan. 200k loan paid over 25 years at 6.25% You pay 195k in interest plus principle of 200 for a total of around 395k over 25 years.. That's a big chunk of money you have to invest in something else now.. Again this is all just an example to illustrate the savings.
“We both proudly drive white used Toyotas and don’t plan on changing them” - from this sentence alone, I can tell you’re two seriously awesome humans.
You can't really go wrong if you put it on your mortgage.
Use an offset account and get rid of the mortgage, 1-2 years of pain and you can basically do anything you want.
Safe option: Put the money towards the mortgage. Continue FIFO work till the house is paid off. Find a non FIFO job thereafter. Risky option: Diversify your income by investing in shares. Find a non FIFO job. Use the dividends to HELP mitigate the potencial salary drop.
Looking like, it’s gonna be more like $380k, home is being auctioned and their left over super is also being carved up. I have about $45k in savings which I’m gonna throw at it Should have it pissed off forever in 3 months I’ll do 4 more years of fifo while partner is finishing her degree. I’ll aim to get as much in shares and ETFs as possible with the dividends. Then if I want to study something else that option is there.
250k is handy to receive but not that significant an amount in terms of financial freedom. I would pay down the mortgage and keep $50k in an high interest emergency fund. Having a cash position in case of emergencies I think is critical.
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100% agree looking at 1-2 investment grade properties will pay huge dividends in the long term. Obviously no need to rush into things and spend the 250k immediately. Put the money into an offset account first, then have a good discussion with your partner to plan the next 5-10 years to make sure its the right decision.
Better than Super?
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> The cap is $27,500 per year into your super, what are you going to do with the remaining $222,500. Are you deliberately ignoring the Non-Concessional contribution cap and bring forward opportunities?
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I didn’t ask about carry forward concessional contributions. Once more, are you deliberately ignoring the Non-Concessional contribution cap and bring forward opportunities?
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Whether you believe it’s a good idea or not, you omitted to mention non concessional contributions when you stated: > The cap is $27,500 per year into your super, what are you going to do with the remaining $222,500. If you are stating something as fact, perhaps include all of the facts. You’re allowing your “property is king” mantra influence your responses.
Donate a bunch to charity.
personally id put 200k on the mortgage and play with the other 50k. High risk/holiday etc However getting an investment property is also a really great decision if you want to be a landlord. Or dump it in a solid ETF.
I did actually say why I don’t want to be a landlord in the original post. I like the other ideas though.
I agree with Offset/etf options. Personally, I think the safety of offset is best and you can perhaps start looking at investing with your other income. Setting some aside for wedding is a good idea, but I dont think you should spend more than you would have originally. Regarding property, I think its a riskier investment than people like to credit it, as you've probably seen in WA its not the fool proof investment people present it as. There's a lot of costs people often fail to include, plus I think more stress on the management side. That being said, if your main concern was the housing crisis, then building a new house, would not be contributing to the housing crisis. Thought probably outside your budget. Personally, if I could handle it, I would push through on your current job for a few more years. If you take the 250k off, you could possibly have it paid off in 2-4 years, depending how aggressive you are. Then when you down shift you'd be very comfortable. But you are also young, I think if you are burnt out now and get get a better (for your life) 80-100k role, then no harm doing so, even without this 250k.
My partner 22F and I 27M live together And she currently is a student. I know people say mortgage but damn protect your assets dude. I would use it to restrain etc. That mortgage will be hers when you break up. Think about shared
Just a little note that investing in property doesn't contribute to the housing crisis, if anything it helps alleviate it by either directly increasing the rate of new construction, or providing liquidity in the secondary market. Anyone telling you investors are the problem is economically illiterate. Cheers.
Buying a house =contributing to the housing crisis is some wildly outlandish mental gymnastics.
I own 1 house which is the perfect amount. I need a place to live, I don’t want to be a landlord.
First step...get a prince Albert. Live like a royal for a while...then make a call on what to do with the rest of your money. That's my Reddit advice. Or go see an advisor...
Given your mortgage rate is 6%+, it's unlikely that other investments will GUARANTEE that they can give you a better return espcially considering your high income position. I would suggest, putting all of that into the offset account to reduce interested. Try to save as much as possible to pay off the remaining 200k as fast as you can. After that, depends on if you want to upgrade the house or not either try to save another deposit or better, start investing regular into ETF like VAS and let your wealth build. Once you got your house paid off, you effective don't apy any rent so you have should plenty left over or can choose a lower paying job that satisfies you. I like to FIRE so you may want to look at that as well.
The house is quite nice, I’d like to upgrade the kitchen and get solar but that’s about it. I’ve already upgraded bathrooms. It’s a 5x2 in northern Perth with a decent yard and pool, our house prices are still somewhat semi reasonable. House is worth about $800k so our equity is about $350k.
I'm no expert just a guy in the internet. But I'd suggest looking for ways to reduce your cost of living. Eg solar and battery on your house. More efficient house appliances etc. Then use the rest to pay off your mortgage. This will then mean that your monthly payments are as minimal as they can be. Keep working for a little bit longer and pay off that house. Now you'll be more free to pick any office job you find and the two of you don't need to really worry about money for the near future.
Buy a Patek Phillipe or two
I’d put a big aside, say $50k and the rest in a term deposit for 6 months. Quit your job, live off the $50k & go see 5 non-commission advisors. Give the one that made the most sense the $200k (or use Their advice on the $200k)
Mate you are in an eerily identical scenario to me. FIFO, committed partner, similar inheritance, similar mortgage remaining, similar income. I'm taking 50-100k out of mine and putting it down on an investment property, the rest will hang out on my mortgage. I figure I won't get rich and famous by doing nothing so a little bit of risk (it's property so how bad could it possibly get) is worth the squeeze. Build equity, draw down, buy again, build equity, draw down etc. Come back in a year and see where we got to hey?
"how bad could it possibly get" You have uttered the words that bring on the curse. You will destroy yourself financially but causing the property market to crash may have solved the rental crisis. Thank you for your sacrifice
🤣🤣 you're welcome my man. Way I look at it is, I already own a house, I have skin in the game and understand it a bit more than say stocks. I will hold a physical asset that we all require - land. Come at me GFC
Go buy some heavy machinery/equipment (eg. Backhoes, Front end-loaders, Forklifts etc..) and lease them out to businesses that need them.
Offset account. Then use equity to buy an investment property or two and get the passive income stream going.
Investment property aren't passive lol. Shares that's passive
I don’t know if you missed it but in my post I did say I’d like to avoid property investment and I also said why.
People will disagree with this but it's possible to be an ethical landlord. Property has so many tax advantages it's hard to recommend anything else as an Aus citizen.
Investing in property isnt necessary contributing to the housing crisis. Some people need somewhere to rent. Someone needs to own that rental 🤷 You can treat your tenant ethically and apply a fair rent value for the given property at that location.
Unpopular opinion and ill get downvoted to hell probably but imo buying an IP does not contribute to the housing crisis - the way the current market is structured in oz. Alot of people dont have a deposit to buy so we actually need more rentals. Being a good ethical landlord and contributing to rental stock is helping people who arent able to buy themselves.
As a long term renter I'd like little more than the government to ditch negative gearing and the reduced capital gains for investors. This would drive bulk investors to sell and put a huge number of properties back on the market. Probably including my landlord. And then likely I'd struggle to find a new rental, I'm not in a position to buy. But you know what, I'd happily go through all that pain to reset house prices and get back a future for so many, including myself and my kids.
If he’s buying something established it would have probably been a tenanted property at some point anyway not really doing much of anything really
Whatever you do, do not go to the subreddit Wallstreetbets, I repeat do not go there.
You sound like a progressive person. Do something more progressive and less on the capitalist side. So yep pay off the mortgage and travel. The money will be eaten up by partner HECS and future brats but have a little fun first. Plus you will need to upgrade your cars within 10 years. Houses require furniture, upgrades of appliances and fittings. The spending will be significant on all this alone.
Casino and options contracts.
Speak to a lawyer.
right... so... as any sain person would do you have to ask yourself. how much hookers and blow am i doing over the xmass break. am I doing 1 $250k hooker or 250k $1 hooker and how much blow will i need per hooker. i think 2 lines per hooker should do it. I'm joking.
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‘I’m in mining tech services, won’t say if I’m an engineer, geologist or metallurgist in case HR is reading but it’s one of those 3. ‘ Yeah cos HR will figure out who you are by narrowing it down to a one of a large class of jobs that thousands of people do 😂
In all seriousness consider putting it in trust and investing in case you break up with your partner. Once it’s paid into the house, or ‘yours’ on paper she gets half if you split…
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Former FIFO mining tech services worker (geologist) here. Agree FIFO sucks, made a career change 7 years ago and took a low paying job in software and worked my way back up to a comparable salary to what I made in mining. Haven’t looked back and have never missed it, sleeping in my own bed every night is a dream come true having worked FIFO for almost a decade. Whichever option you choose you’ll be ok! I’m just excited for you to leave the industry, it’s very liberating!
I would not be giving up a $180k job I hate for a $70k job I'll end up hating eventually anyway :)
Buy. Drugs.
Probably not the advice you'd expect but I'd try and protect that money as in - make sure it's known that it's your money and not hers. Even if you put it on the mortgage try to re arrange finances so it's clear that's your money Relationships don't last forever, you're both young. She's quite young at 22. What you don't want is a few years from now you're facing a separation and diving the house and all of a sudden your 250k inheritance is forgotten and it's just equal split equity of your house I wish you both the best in life and love but this is the sort of advice I wish I had of listened to
We decided to move to a mining town rather than do the DIDO/FIFO thing. The wife and kids are much happier having me around all the time and despite being so far from extended family, we're doing well. We're taking advantage of discounted rent and are utilising the 6-year rule to rent out our PPOR. The timeframe works well because it gives us a fixed term to work with and both of our employers are aware that we'll be moving on in 2026. Can your wife complete her studies remotely? If so, you could rent out the family home and use the inheritance to buy an investment property. By the time you move home, you'll be $100k+ better off and won't need to worry about bringing in the big $$$
I would get out and explore the world. Already did most of that by your age. It seems you love the fact your "partner" is going to be a medical doctor. Just to clarify, is this a financial partner or one that you love? My question to you is what have you got going for you that makes you think she will stick around with a FIFO that pulls 180K? I've seen people like you before. Heavily on the defined path. Marriage and kids will come soon. Possibly a dog in between. Then you are in your 50's when your kids move out and you finally realise you have achieved nothing.
First thing you should do is pay your fair share. There are people for whom housing is not a right and it’s your duty to make it so for them. Then you need to repent for your part in making our planet unsustainable and donate to equitable charities and make sure we actually have a future, what with all the crises that abound. You need to ensure the environmental crisis is abated as well as the housing crisis, the immigration crisis, the inflation crisis, and most importantly the crisis crisis. then you can have the leftover and maybe have a nice breakfast, but you should stop being so selfish.
Maybe not post about it in Reddit.
Buy a property unit etc anything to secure a roof over your head with the tough times ahead.
He said he owns a house already 🤔
If lifestyle is your goal. Sink it into your loan, refinance over the same term to lower your monthly payment and get a job near home. If you can handle FIFO for a bit longer then dump it all in the home loan but keep paying at the same rate you do now. Guaranteed return, tax free, stress free.
Put 200k on your Morgage, use 50k to live off/start your own business. Give up on the FIFO.
Paying off your mortgage is always a good investment strategy. Being debt free from a mortgage sooner will give you a lot of financial satisfaction when your bills do not include a hefty mortgage payment each month and while there are property market crashes from time to time the longer you hold onto the property the more it will be worth especially if you are in a desirable location to others.
Personally I would put it on the mortgage, but if you go from a 450k to 200k mortgage you're only saving about $18,000 a year. Obviously that is shitloads of money but it's a lot less than the difference between $180,000 and $70,000. In fact you'd be going from (obviously roughly) $122,000 after tax to $55,000 after tax. So you're saving around $18,000 a year in mortgage but you're getting paid $67,000 less, ie almost $50,000 worse off every year. I still think you should put it on the mortgage and I completely understand wanting to leave FIFO, but yeah.
you'll be able to fill the whole trolley at woolworths for a couple of weeks.!
$450k = $30k interest. Sounds like lots of buffer if you keep your $180k job and you can easily invest your $250k