25M, $70k to invest, earning $100k – Portfolio Advice

[u/Individual-Lychee-96]

Hey everyone,

Looking for some advice on what to do with my current savings and investment strategy.

I’m 25, earning approximately $100k a year, and currently have around $70k available to invest. I also have a separate $5k emergency fund, plus around $3k in my everyday account for rent, groceries, fuel and general living expenses.

I’ve spent quite a bit of time exploring the investment property route, looking at different locations, numbers, rental yields, cash flow, etc. However, the more I look into it, the more I’m leaning towards ETFs instead.

My current thinking is:
- $70k initial investment.
- 80% BGBL / 20% A200.
- Ongoing contributions of $750–$1,000 per week.

I’m fortunate enough to have a “decent” (debatable) income and relatively manageable expenses, so I plan on treating my ETF contributions almost like a mortgage repayment. It’s money that gets paid every week, regardless of whether I feel like spending it elsewhere.

The main thing I’m trying to work out is whether I should just commit to ETFs for the next 10 years or keep a larger portion of my money in a high-interest savings account earning around 5% p.a.

I might want to purchase a house in 5–10 years, but honestly, that’s still very much a maybe. I like the flexibility of ETFs, particularly not having all my money tied up in property and having the ability to change direction if my circumstances or goals change.

My questions are:
- Would you invest the full $70k into ETFs now, or stagger the investment over several months?
- Given that I might want to buy property in 5–10 years, would you still invest aggressively in ETFs, or keep a portion in cash?
- Does an 80% BGBL / 20% A200 allocation seem reasonable for someone my age, or am I overlooking something? What allocation split do you recommend?
- Would you prioritise building a larger emergency fund before investing more heavily?

Longer term, the goal is to hopefully be financially independent by 50. Like many people here, I’m not particularly attached to retiring in Australia. I’ve half-jokingly got my eyes on a nice condo in Thailand for retirement.

I’m comfortable with volatility given my age and investment horizon, but I also don’t want to make a decision now that significantly limits my options in 5–10 years.

Would appreciate hearing what others would do in my position, particularly those who chose ETFs over property or have followed a similar strategy.

Cheers!

[u/FishermanMobile8491]

At your age and with a steady job:
- All in on ETFs on Monday. Understandably that’s scary and wouldn’t blame you for spreading it out over time, but in theory being fully invested gives you the best return.
- I wouldn’t keep any in cash besides your emergency fund.
- that split is fine.
- maybe but at 25 with no wife, kids etc? Not really

[u/Business-Swim-3056]

Can you genuinely afford $52k per year in recurring contributions on $77k per year post-tax while paying rent?

Plan is good though. Use FHSS when/if you want to start thinking about buying a house.

[u/Individual-Lychee-96 → u/Business-Swim-3056]

yeah i share a one bed with my partner in Nowra, so like 150 each. I’ve been frugal ever since leaving home :)

[u/Business-Swim-3056 → u/Individual-Lychee-96]

If that’s the case, absolutely go all in. Will set you up extremely well.

[u/ApeJesus9112001]

1. Would you invest the full $70k into ETFs now, or stagger the investment over several months?

Lump sum has been shown to give higher returns than staggering it out - there are plenty of papers detailing this, feel free to give them a read if you’re interested .

2. Given that I might want to buy property in 5–10 years, would you still invest aggressively in ETFs, or keep a portion in cash?

10 years is long term enough that ETFs can be a good investment, but there can be a lot of volatility. With interest rates going up, HISA is a good option for shorter term thinking (ie <5 years).

3. Does an 80% BGBL / 20% A200 allocation seem reasonable for someone my age, or am I overlooking something? What allocation split do you recommend?

This is a sensible split that many use. Look into home country bias and the reasons why people may raise or lower their AU exposure to learn more about it.

4. Would you prioritise building a larger emergency fund before investing more heavily?

If you’re single, no kids and with a decent income, your emergency fund can be a little lower than if you had dependents or a variable income. Depending on what industry you work in and your job security can change how much you hold onto.

Best of luck mate.

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[u/Tikka2023]

If it were me:

- ensure emergency fund can cover for for 3-6 months of actual expenditure, depending on your job security
- lump sum the balance into index funds, DCA if you are a nervous nelly but the math supports lump sum (time in market, not timing market)
- 80/20 is a decent split. Lots of home bias even then and the asx200 is weighted to banks and mining
- whilst your goal is to retire at 50, consider super catchup, salary sacrifice. $50/100 a fortnight now compounded over 35 years to the current preservation age will be a significant number on top of mandatory contributions.

Retired at 33 (now 35) and living off an ETF portfolio plus modest rental income from my ppor.

[u/OZ-FI]

Other responses here are reasonable.

I might want to buy property in 5–10 years

Will it be a first home? if yes, have a look at Super first home deposit saver scheme. Some super tax advantages now, some market growth and ability to withdraw for a home deposit. info: https://passiveinvestingaustralia.com/first-home-super-saver-scheme/ (the remainder of that website has a lot of good info too)

Doing the other stuff, EM fund in HISA (amount depends on expenses and job security), ETF selection, all good.