Meet Ann and Geoff: She's the CEO of spend and he's the CFO of don't spend!

Now and again, you stumble across a couple that epitomises happiness, and it is inspiring. Two people who are totally in sync because of (not despite) their differences, and who are loving the journey. I haven't yet had the chance to speak with Ann and Geoff, but that is what jumps off the page when I read their story.

Livewire investor profile

Names: Ann and Geoff 

Employment status: Redefining retirement.

Years investing: 15 years

Investment goals: Funding retirement

Products used: Corporate bonds (72%), equities (25%), metals (1.8%) and cash (1.2%). 

Biggest portfolio holding: Bonds 

How long have you been investing and you explain how your strategy has changed over time?

We have had varied investment experiences. Initially, we dabbled personally in a small way. We were neonates and had a steep learning curve. In 1990, we started our own software development company producing customised database applications for small business. In 2006, we decided to move our share trading to this business. Over the next six years, we traded with some success.

Our major trading policy was to recognise that greed could be an issue and so set a limit at which we sold, namely 7%

In 2009, we had enough investing knowledge to start our SMSF. We continued share trading in the business until 2012. During these years we made some 200 trades in numerous companies across various sectors. Our present holdings in equities is a distillation of our experiences over these 15 years. 

In 2010, we entered the world of corporate bonds with our first holding returning a heady 11.25%. Such bliss and risk! Also, Geoff wrote the necessary software to manage and analyse our trading activity and ensure adherence to the superannuation rules.

What was your first investment? 

Our first investment was with BT Funds which was recommended by our insurance agent. We wanted to know more about managed funds but it was in the dark ages of 1986.

After much difficulty and calling personally, we managed to collect a few prospectuses. However, they had taken great care to tear out the application forms before handing them over.

After reading as much as we could find, we were not encouraged to invest in managed funds. It was a closed shop. The BT fund plodded along. 

At that time Ann had super contributions into a state fund, but women were not allowed to contribute as much as men, another discouragement. We ran into prejudice and brick walls.

What do you do for work?

We have yet to find out what retirement means. We have changed what we do and how we do it, but have kept active. Geoff continues to write software, now mostly for managing our investments and super fund. 

Ann has had a varied teaching career as a learning disability teacher. She is still registered to teach and volunteers to help students from time to time. She uses her research skills to select investments. 

Geoff is the CFO of don't spend and Ann the CEO of spend – a balanced pair.

In 2001, we sold the house and bought an off-road caravan. During the next 10 years, we went out remote as volunteers to assist families, travelled overseas, worked overseas, and continued to manage our investing. 

Then the next ten years involved buying a house, more travel overseas, some work, and more investing. When the pandemic arrived we were due to travel to Estonia to assist in their English language program. Is this retirement?

What products do you use to execute your strategy?

We have a range of corporate debt with maturity dates from 2022 to 2031, giving a spread of capital return to be reinvested. Interest rates range between 3.25% to 8.00%, with fixed and floating interest rates. 

Mostly, we have chosen the more secure investments with established companies without too much attention to the industry type, although we do exclude some on a moral basis. 

At present, our corporate investments include property manager, airports, energy, and infrastructure. We were offered to invest in Gulf finance. After having recently visited Dubai, we saw it as a good investment which it has proven to be.

How would you describe your strategy?

When we research an investment we look at the industry skills of the management, their management expertise, return on equity, liquidity and debt, and name in the community (bad press/good press). 

Ann's idea of light reading is company financials and the like.

Citi Chic (CCX) is our latest company to come under the microscope. It has an excellent online presence. We have visited the store. Customers are satisfied with the products. Returns are easy. It is probably the only retail venture in which we would invest.  

Could you please share your top five holdings and tell me a bit about why you hold each of these positions?

The distribution of investments in our super fund is as follows:

1. Bonds 72%
2. Equities 25% 
3. Metals 1.8%
4. Cash 1.2% 

The banks. We became accidental Bendigo shareholders at $5.00 through the merger of our building society with the bank. Through trading, our present holding was purchased at $6.72 on average. Why NAB? From memory, at the time it was cheaper at an average of $24.61 than the other banks and gave a better return. Over the years we have held CBA, ANZ, and MQG.

Mining stocks. Why BHP? We do have some Fortescue (FMG) shares and have been dollar averaging while the price is down. We invested in FMG in US corporate bonds, we bought a new car with the profit. As for Rio Tinto (RIO), over the years we have traded shares in many companies, including RIO, and Woodside Petroleum (WPL). One of our best trades was when RIO decided to buy out Coal & Allied when management negotiated a fantastic price, and after only four months we made a pile of cash.

Why metals? Ann has always like gold, while Geoff prefers silver. So, for the fun of it, we made a deposit in the Perth Mint with a monthly investment plan to purchase gold and silver. Now we can watch them grow (or shrink).

We have also made a few speculative investments, such as NearMap (NEA), to keep things interesting. 

What has been the standout performer from an income perspective?

Fortescue corporate bonds performed best. But trading in Bendigo shares and including the dividends has doubled our money over 10 years.

Our best performer ever has been purchasing Computer Share at the initial offering which gave us a 10,000% return.

We have been wholesale investors for several years. The returns for wholesale investors are good, with a steady income over a longer time frame. For example, our investment with Z1P Money is as bondholders, not shareholders. Thus we receive monthly interest payments. 

We had already invested in Splitit shares with which we made a small profit. We decided that this sort of investment did not fit our portfolio so made no more share purchases of similar stocks.

Could you tell me about your worst investment?

Learning from loss of ABC Learning (ABS). We paid more attention to the growth of childcare and not enough to the individual company. We may not have been able to assess the honesty of the owner. A complete loss of a single investment is neither here nor there and overall made little difference. Just don't do it too often.

How does Livewire help with your investing process?

We like Livewire because it covers a wide variety of topics. The content is free. We like looking at the results of and participating in the surveys. 

Livewire presents information and it is then left up to the readers to follow what interests them. 

We enjoy the articles about small caps. Buy, Hold, Sell is one of our favourite features because the presenters give an in-depth analysis of the thinking behind their choices. Ann usually reads most of the articles that come through on a daily basis.

Do you have a favourite contributor you recommend other investors follow?

Favourite contributors:

• Brad Dunn of Daintree Capital - very thought-provoking insights on how to access the global hybrid market.
• Marcus Padley – Like his sense of humour.
• Patrick Poke – Delivers with great interviews. We would like to have lunch with Patrick after the pandemic – our shout!
• Shane Oliver - Our favourite. We corresponded with Shane after reading an article in Livewire. Shane answered our email with a lot of personal insights.

What can Livewire do better or what do you dislike about Livewire?

Livewire's mix of series promotes reader interest during the week. You are doing a great job.

Is there a lesson you’ve learned as an investor that might help others?

The first lesson of investing is to read everything you can. Invest in something you know about or like. We lived in WA where we learned about mining and so we invested in it. 

Do as much for yourself as you can. We manage our own SMSF and use a trading account for equities. 

We have a first-class accountant and together we are a team. 

 We also enjoy helping our family with their corporate SMSF.

Can you share a personal passion or ambition you have for your future?

We travel the world to see what is happening. The world is an investing (and interesting) place. Try it out.

When we are able we will contact Frontier Services, which is part of the Uniting Church Outreach Program. We have worked with them in the past and they have an extensive list of people in remote areas who need assistance. 

 We have also delivered meals on wheels and Ann has participated in the L2P program, assisting young drivers. Our first overseas trip will be to see friends in France, Finland, and Estonia. In Estonia, we will help teach English.

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