Michael Georgeff is from a second-generation wheat farm in a very marginal rainfall area of WA. He retired seven years ago and gives us an insight into his SMSF and his passion for investing.
How old are you?
65 years.
Why did you start up?
I decided I was too young to go fishing and bowling and wanted to control my own financial future rather than put it entirely in someone else’s hands. Also I got rid of my theatre room and turned it into a large spacious office, which gives me a “Warren Buffett” feeling.
How large is your SMSF?
About $3 million.
How difficult is it to manage?
At first I thought “this is very difficult”, especially when my first purchase was Rio Tinto (RIO) at $130 – not a good start! But as good fortune would have it, my timing was at the end of the 2008 GFC and as we know in the stock market, ‘timing is everything’.
Do you enjoy managing it?
It’s the best job I could ever get used to. I can be lying back in some exotic overseas hotel and still be watching the market and trading shares, thanks to modern technology.
Are you pleased with the performance of your SMSF?
My figures for the last three financial years were very pleasing:
2012-2013: 21%
2013-2014: 20%
2014-2015: 18.4%
Up until December 31st 2015: 19.4%
What is your asset allocation?
Up until December 2015, I was 50% exposed to the internet sector; 20% to telcos and health; and the remaining 30% in managed funds.
For the last three months, I have split this up into two separate accounts: one with blue chips, which are mainly static holdings chosen from, say, the top 50, which comprise about 20% of my SMSF value.
The other part of the investment portfolio consists of mainly small caps, which are higher risk/speculative.
The blue chip portfolio has about 20 stocks.
I do try and pick the stocks that are either earning an income or very close to it.
The remaining 30% is in managed funds, which, over time, I have been fine-tuning over about five years and I am happy with the ones I am holding now. These include the Smallco Small Caps fund and a microequites fund managed by Ausbil.
What investments do you have outside of your SMSF?
I lease some of my original farmland, which I still own and play around with a land development in Tasmania, which only just breaks even.
Do you use an advisor or any kind of service provider?
In the order of value I use the following services:
Foxtel, Your Money Your Share
The Switzer Super Report
Intelligent Investor
Under the Radar
Kosec
Fat Profits
Motley Fool
It’s worth an outlay of a few thousand dollars per year to collect information, which is a small price to pay, compared to the amount you have invested.
I also network with my neighbours. There is a wealth of untapped talent out there in the retirement world.
My network consists of:
Terry, the ex-bookie, managing his own super fund, studied the share market for 40 years mainly in small cap mining resources;
John, an engineer and a very senior BHP ex-employee, who manages his super fund; and
Jill, a former private secretary to leading Australian company CEO’s, and former personal assistant to an ex Premier of WA during the first mining boom. Jill also does my book-keeping!
Important: This content has been prepared without taking account of the objectives, financial situation or needs of any particular individual. It does not constitute formal advice. Consider the appropriateness of the information in regards to your circumstances.