Ask Paul: Should I invest our savings in bluechip shares?

Dear Paul,

My husband is 45 and I am 40; we have a teenage son almost 16 who works part-time and will continue school to finish Year 12, then go to agricultural college. School fees are around $1500 a year. 

We own our home worth $350,000 to $400,000. We had a rental house for three years which we recently sold for a profit, so now have around $110,000 in a NetSaver account and about $5000 in our cheque account.

We own both our cars, have no debts other than one credit card we use for everyday expenses and pay off in full every month, and cash in the points earned for fuel cards. 

Hubby works full time (about $65,000 p/a), I work part-time (about $12,000 p/a) with intentions of flexing up my hours over the next couple of years as our son gains more independence (we live out of town so he currently relies on me as his taxi service). 

We have very little super unfortunately due to owning our own farm years ago and mainly only working part-time, which saw most super earned eaten away in fees. Hubby's super is currently worth around $65,000 and mine $6000. 

I have been trying to learn about the stockmarket over the past year or so. I'd like to invest some of our savings in bluechip shares (rather than in super where it will be locked away).

We only have 3000 Telstra shares at the moment, bought when they first floated! Would another rental house be a better option, or something else perhaps? - Karen

As a parent, I can relate to personal taxi services - my youngest gets her L plates next year which is both exciting and terrifying! Perhaps you can help your son learn financial skills and save you from taxi duties, by helping him develop a savings plan to buy a car when he gets his P plates.

It sounds like you have a sensible financial plan. In your early 40s you're looking in good shape, but it's time to start focusing on your superannuation.

I recommend your husband salary sacrifices some of his income into super as this is a very tax-effective strategy.

Also, at your level of income you may be eligible for the super co-contribution scheme where the government will match your contributions to your super account. I know super is locked away, but for your husband in particular salary sacrifice is really tax effective.

Investing some of your savings to achieve a higher return could be a good idea as long as you keep a long-term perspective and diversify your investments.

The Australian Stock Exchange offers some simple courses and seminars on investing in the sharemarket. I do recommend you complete a course before you start investing.

As for property or shares, I really am pretty relaxed about which way you go. Spreading your investments makes sense, but over the longer term quality shares or well located property have both shown good performance.

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