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Ask Paul: My financial planner wasn't much help - what next?

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Q. I am a 29-year-old electrician, single, with no dependants, and have recently seen a financial planner, who was not much help to me in terms of guidance.

I earn around $100,000-plus a year depending on overtime worked.

I have essentially paid off a house ($300,000 with $295,000 in an offset account), I have $150,000 in shares managed by me, $80,000 in super, $20,000 in an AMP growth bond and $30,000 in cash waiting for investment opportunities to arise.

Where would you advise me to go next to further my wealth creation?

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Currently I just cannot justify another property purchase as I cannot get my head around how expensive prices are in cities, especially when needing to take out a huge debt. - James

A. I am sad that the financial planner was not much help. I reckon there is plenty you can do!

First, given your high income and large amount of savings, I would be maxing out your super by salary sacrificing $25,000. Don't forget this is the total deductible amount you can put in, including any contributions from your employer.

I get your point about high property prices but the heat is rapidly going out of the big east coast cities, with auction sale rates well down, and while you won't get a bargain I think you will be able to buy at a realistic price in 2018.

Do remember that our population is growing very rapidly. This is a good guide to property prices long term. If you want to buy better value, why not consider smaller cities that will in effect be part of our bigger cities as the population grows.

Examples near Sydney would be Gosford, Newcastle and Wollongong. I think Newcastle in particular is a city where property owners will do well in the long term.

The Aussie sharemarket did OK in 2017 but has underperformed most world markets. I would not be unhappy for you to increase your exposure there.

At your age, any well-chosen asset, be it property or shares, is likely to be a good decision on your part.

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Paul Clitheroe AM is a respected financial adviser and Money's chairman and chief commentator. He is chair of the Australian Government Financial Literacy Board, and author of several personal finance books. Got a money question? Ask Paul.
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