TOL - 12th Sep, 2023
Meet Stefan: He owns 3 properties at age 30 (and is making his money work for him with ETFs)
Learn how Stefan is using dollar-cost averaging to increase the value of his savings and produce passive income.
Like many Australians over the last decade, Stefan was sick of his money earning next to nothing in the bank. After being introduced to investing by a friend six years ago, he opened his first broker account with CommSec and bought his first units in a low-cost Australian shares ETF.
It doesn't seem like much, but this was just the beginning of Stefan's journey - one that would see the now 30-year-old civil engineer learn to make his money work for him, instead of working for it.
In February 2020, Stefan and his "Superwoman" wife purchased their first home for $440,000 on the Central Coast. Thanks to COVID-19 and the 'tree change, sea change' trend, what was a modest two-bed, one-bath home in Noraville soared to a $700,000 valuation in just a year and a half period.
"We decided to use the extra equity to our advantage, and after some research, we signed up with a property broker who helped us secure our first investment property in SEQ (off the plan)," Stefan explains.
"A year later, we secured a second investment property in Broadbeach using equity and savings we had built up over the past few years. We recently moved back to Sydney and converted our two-bedroom shack in Noraville to an investment property."
The goal is simple. Use these investments to realise some capital growth over time, sell at a profit, and use it to pay off the mortgage on what will eventually be their home in Noraville.
"We are now basically even in terms of cash flow (rent minus mortgage and maintenance), however, in terms of capital growth we are up about 30% since we bought our first property back in early 2020 in the Central Coast," Stefan says.
As for the rest of Stefan's investments, around 90% of his portfolio is invested in low-cost exchange-traded funds, with only a single satellite stock. This makes the day-to-day managing of his portfolio far easier, meaning he only dollar-cost averages into eight positions each week.
In this Meet the Investor profile, Stefan openly shares his top portfolio positions today, explains why he believes in the benefits of consistent dollar-cost averaging and outlines his plans to be financially free in just 10 years.
Livewire investor profile:
- Name: Stefan Dencic
- Age: 30
- Employment status: Employed
- Years investing: 6
- Investment goals: Passive income
- Products used: ETFs and shares.
- Biggest portfolio holding: Betashares Nasdaq 100 ETF (ASX: NDQ)
.jpg)
1. How old are you and how long have you been investing?
I am 30 years old and have been investing for six years now.
2. What is your objective from investing?
The strategy for my partner and I is to invest in both stocks and investment properties over time to generate passive income. We hope that this gives us the room to pursue our passions in life, such as travel, spending time with family, and choosing a career that we are passionate about that also provides us with security if life ever throws us a curve ball.
My partner and I currently work full-time professional jobs, and I also recently picked up a part-time job as a Flexologist for some extra cash. Our appetite for risk is quite high at the moment as we realise we are in our early 30s and this is the time to go all in and give it a hot crack!
To date, we have been buying shares with a long-term mindset, as a way of saving and using the market for growth. Eventually, we would like to pass our shares down to our future children to help them with their education or buying their first home. If we have any leftover, we might use the rest for a cheeky holiday.
3. What products do you use to execute your strategy?
My partner and I own a diversified portfolio (mainly ETFs and a couple of satellite stocks) as well as property (we have three investment properties located in Sydney, southeast Queensland, and the Gold Coast).
4. How would you describe your strategy?
Our objective is to dollar-cost average a small portion of our salary each week into stocks, and the remainder is offset against our home loan to reduce the interest repayments as much as possible.
Currently, 90% of my portfolio is invested in ETFs with a single satellite stock. I recently reduced the number of holdings in my portfolio from 11 to 8 total positions as I felt I was spreading myself too thin across a variety of stocks and consolidation meant I had less to manage and could dollar-cost average more efficiently. The three I sold were part of my satellite portfolio.
.jpg)
5. Could you please share your top 5 holdings in % terms and tell me a bit about why you hold each of these positions?
- Vanguard Australian Shares Index ETF (ASX: VAS) - 15.5% - My first-ever investment. Was a comfortable purchase at the time as I was investing in companies that were in my backyard! Averaged roughly 5.5% growth p.a. to date which is decent, I guess!
- Betashares Nasdaq 100 ETF (ASX: NDQ) - 18.3% - First invested back in 2018/2019 and have dollar-cost averaged ever since as a way to ride the wave of the rising value tech industry. My best-performing position by far.
- iShares Core MSCI World Ex Aus ESG Leaders ETF (ASX: IWLD) - 13.6% - I wanted broad exposure across a number of sectors around the world and also had a focus on ESG investing (try to do as much good in the world as I can). This is my second best-performing position.
- Betashares Global Robotics ad Artificial Intelligence ETF (ASX: RBTZ) - 10.4% - Bought a small portion of this back in 2019/2020 and held for a while as I figured eventually the world is going to be taken over by robots! Fast forward to 2023 and it's going gangbusters. I have dollar-cost averaged more into this position over the past year and so my allocation in this has grown considerably.
- Spotify Technology (NASDAQ: SPOT) - 14.9% - They say invest in what you know, and since I use Spotify almost daily and love the platform, I figured it would be a perfect match. It has definitely been a rollercoaster ride with this stock (since investing, it has dived hard and then come back again to about even). However, its powerful mesh of tech, music, podcasts and now audiobooks has it in its own category, so I am sticking with it until I see another player try to match it (I am keeping an eye on Tiktok!).
6. Could you tell me about your worst investment?
Cann Group (ASX: CAN). It was a typical scenario of my brother-in-law investing in the stock and recommending that I dive into it also. I bought it due to its cheap per share price (I did not realise till later that this did not mean it was a 'cheap' stock), and also the medicinal cannabis industry was all the rave at the time.
The stock initially did well, reacting to good news such as deals made with overseas distributors and a contract to build a new manufacturing plant that would accelerate the production of their products. Production, however, was marred by COVID-19, and continuing losses on the balance sheet drew concerns, so the stock literally did do a dive itself! I ended up selling the stock at a 70% discount and reinvested in an ETF. Lesson learnt, I should have placed a stop loss on it.
7. How does Livewire help with your investing process and what tips can you share with other investors about using Livewire?
I am subscribed to Livewire's newsletter which has been a great educational resource. It has provided me with a number of opportunities to learn from the best in the investing world and also offers this information in a variety of different ways, such as podcasts and written articles.
8. Do you have a favourite contributor you recommend other investors follow?
I don't have a favourite, they are all great!
9. What can Livewire do better or what do you dislike about Livewire?
Talk to more regular investors who have done really well with investing in stocks.
10. Is there a lesson you’ve learnt as an investor that could potentially help others?
Dollar-cost averaging is the best way to increase the value of your share portfolio. Over time, regardless of the market situation, you will accumulate wealth as long as you invest in a diversified number of assets. ETFs and investing in what you know are definitely the way to go. Find a good online broker (there are many out there) and stick to them so you can track all your stocks in one place.
11. Can you share a personal passion or ambition you have for your future?
Spending days with my wife, dog and future kids travelling around our beautiful country. We would love to be financially free in our mid to late 40s so we can spend as much time with our future children and support their endeavours.
I love basketball, so any way I can be involved in it by watching, playing or coaching is definitely a must, so you will probably see me courtside watching an NBA game one day! We also would love to have the freedom to give our time to charity work on a regular basis.
Would you be interested in being profiled in our Meet the Investor series?
Meet the Investor is one of Livewire's most popular series, helping us draw on the insights of our incredibly knowledgeable readership.
We are looking for more readers to profile in 2023. If you would like to share your story too, please send us an email at:
content@livewiremarkets.com
Never miss an update
Enjoy this wire? Hit the ‘like’ button to let us know.
Stay up to date with my current content by
following me below and you’ll be notified every time I post a wire
Ally Selby is the deputy managing editor at Livewire Markets, joining the team at the end of 2020. She loves all things investing, financial literacy and content creation, having previously worked for the likes of Financial Standard, Pedestrian Group, Your Money, Sky Business and Sky News.
........
Livewire gives readers access to information and educational content provided by financial services professionals and companies (“Livewire Contributors”). Livewire does not operate under an Australian financial services licence and relies on the exemption available under section 911A(2)(eb) of the Corporations Act 2001 (Cth) in respect of any advice given. Any advice on this site is general in nature and does not take into consideration your objectives, financial situation or needs. Before making a decision please consider these and any relevant Product Disclosure Statement. Livewire has commercial relationships with some Livewire Contributors.
4 topics
6 stocks mentioned
3 funds mentioned
Ally Selby is the deputy managing editor at Livewire Markets, joining the team at the end of 2020. She loves all things investing, financial literacy and content creation, having previously worked for the likes of Financial Standard, Pedestrian...
Expertise
Ally Selby is the deputy managing editor at Livewire Markets, joining the team at the end of 2020. She loves all things investing, financial literacy and content creation, having previously worked for the likes of Financial Standard, Pedestrian...
Expertise
Comments
Comments
Sign In or Join Free to comment
most popular
Equities
How to choose excellent fund managers
Livewire Markets
Equities
Is the US equity market overvalued?
Livewire Markets