Your net cash in hand income would be just under $45k
That is $45k extra you can pay off your non deductible debt per year. A huge figure considering some people's wages are less than this.
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Your net cash in hand income would be just under $45k
Slightly off tangent but is there a trust that you could hold the shares in for asset protection, but still claim the the interest expense of the loan which is in your personal name?
You are probably right but I still don't feel intellectually or emotionally convinced.
Using a basic example of two $500k house/granny flat properties with
-gross yield of 8%
-expenses such as PM fees etc at 15% of rent
-tax rate of 34.5%
Your net cash in hand income would be just under $45k
Broken toilets and the like are not an issue, PM sorts that out and you just sign the check.
For some one who is knowledgeable about investing out side residentlia property (not me), why settle for 2.3% yield?
I do this but via a margin loan.
The margin loan interest is quite high.
2.3% yield is after tax and interest expenses (which you have ignored), you then get capital gains on shares on top of that (just like property). Obviously you wouldn't buy just one share, but it was just an example.
I used this strategy in the past to pay off my home last year but shares are overpriced at the moment in my opinion.
Two years ago it was a great time to buy shares and the gain was great.
I made a 18% return for the last three years but shares are over priced.
borrowing to buy domestic shares, share market at all time highs, economy on the edge of a cliff. Risky... go for guts and glory hey!
Um no. XJO all time high is 6828 Nov 07. XJO is now 5664
One should not use pre-GFC highs as reference.
When one responds to a specific point, one does.
yes it's a fair point. I'm not interested in shares so I don't know, I thought they were at a high for some reason, thought I read or heard it the other day. Not that it matters what the index is at when you look at the broader economic situation.
Probably thinking of the ASX Accumulation Index (dividends + growth) which is at highs
the performance of ASX shares will be very much limited by the slowing resources and financial sectors, with iron ore prices dropping and with profits of the bank slowing in growth due to regulatory curbs.
meh, international shares are waaay better.
ASX has never recouped its pre-GFC highs.
US S&P 500 has been smashing records on the other hand.
(obviously most people here are only limited to knowing local stuff and mostly in property only.)