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Building an Income Portfolio for My Superstar Wife

There’s nothing more valuable than the work my wife does every single day as a full time mum. So I want to make sure she has a portfolio that works just as hard for her. Now, this isn’t just about being efficient for tax purposes (investing under the person in a lower tax bracket is a valid strategy!). It’s about creating a portfolio designed around her needs: steady income, diversification away from my existing exposures and a structure that keeps us confident to continue investing into long term. Recently I listened in on a podcast from Equity Mates with Aussie Firebug, where he mentioned that picking a strategy which you are going to stick to is very important. This may not be the “best strategy” on paper but it is something we are comfortable with.

 

As every investor knows, income and growth are in a constant tug-of-war. The more you chase yield, the more you tend to sacrifice long-term compounding. And with inflation quietly eating away in the background, we can’t ignore growth entirely. I’ve definitely taken this into consideration to try strike a balance.

 

Here’s what I built for her with a $100k portfolio:

 

ETFAmountEstimated Yield % (Gross)IncomeAllocation
DHHF
BetaShares Diversified All Growth ETF
$25,000.002.30%$575.0025.00%
GHHF
Wealth Builder Diversified All Growth Geared (30-40% LVR) Complex ETF
$15,000.001.70%$255.0015.00%
VHY
Vanguard Australian Shares High Yield ETF
$35,000.006.00%$2,100.0035.00%
GCI
Gryphon LIT
$15,000.007%$1,050.0015.00%
DRGN
Global X China Tech ETF
$5,000.000.50%$25.005.00%
GLIN
iShares Core FTSE Global Infrastructure (AUD Hedged) ETF
$5,000.003.00%$150.005.00%
$100,000.004.16%$4,155.00100.00%

 

Income-Focused with a Local Flavour

Unlike my own NAB EB and super portfolios which are fully tilted toward international stocks (particularly the US), this was the perfect opportunity to inject some Aussie flavour into the family’s overall asset mix. Aussie companies are generous when it comes to dividends for sure and franking credit on top makes it super juicy for my wife who has nil income. That’s where VHY shines! My target allocation is ~50% for Aussie stocks.

 

GCI adds a unique twist, it offers reliable floating income stream and theoretically has low correlation to equtiy markets given the exposure is linked to Australian residential mortgage-backed securities and asset-backed securities (RMBS & ABS). In a nutshell, we are comfortable with the Australian credit market with people being able to repay their mortgages, credit cards and loans. This accounts for 15% of the portfolio.

 

Diversification Still Matters

 

Whilst the Aussie stocks pay juicy dividends, we are also aware about diversification and this is where GHHF and DHHF rounds out the global side, giving exposure to international market. These two are the all in one ETF which has 37% Aussie / 63% international split, with GHHF taking a small leverage to hopefully bolster the return (fingers crossed!).

 

DRGN is the little wildcard or satelite to the portofolio. China remains a long-term thematic play and a 5% exposure won’t blow up the portfolio if things go sideways. It adds an extra layer of diversification, plus the valuation is very cheap right now (and yes there is a reason why!) The reason why I selected this ETF is because of its exposure to both HK and Mainland China market. 

 

GLIN is the second satelite to the porfolio. It provides exposure to infrastructure names in developed countries and is completely hedged in AUD. I believe infrastructure is the basis for growth and the names typically provide stable cashflow long term. 

 

Final Thoughts

 

This isn’t a “set and forget” income portfolio, but it’s pretty close! I plan to rebalance the portfolio perhaps once a year. It’s simple, diversified, Aussie-dividend rich while staying globally aware. Financial freedom isn’t just about chasing highest returns, it’s about making money work for the people we care about.

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