I have been very interested in the option to retire based on spending (increasing) capital gains.
I was interest to poll forum members views on the option to fund your retirement from "living out of capital". One option that Steve Navra proposes is by using cashbonds ( for some background take a look here and even more here ) another option is reverse mortgages.
In this thread our famous accountant DaleGG said:
Some like my IP hero RPI have retired "happy" using such a method as per this post I presume that a more "complex" method was used woven from Steve's 6 ways to use a dollar
I was interest to poll forum members views on the option to fund your retirement from "living out of capital". One option that Steve Navra proposes is by using cashbonds ( for some background take a look here and even more here ) another option is reverse mortgages.
In this thread our famous accountant DaleGG said:
DaleGG said:It is when you borrow money from the banks and use those funds to enjoy a lifestyle without paying tax.
Because the money is borrowed, it is not classed as income and hence the tax free status of it.
However, the trap is that your debt level is rising each year and you must be personally comfortable with this notion, and, find a banking source that will be comfortable with you doing so.
Obviously, you need to have a reasonable level of assets to be able to do this.
Dale
Some like my IP hero RPI have retired "happy" using such a method as per this post I presume that a more "complex" method was used woven from Steve's 6 ways to use a dollar
SteveNavra said:Diversity is the way to go:
Most buy property for capital gain, others for the income; either way it would be wasteful not to divert these dollars (The exact same dollars) into another investment.
It is about using the same dollar many times over so:
- Dollars into property for leverage, which provides income and capital growth.
- The income and capital growth into a cash fund, safely housed and converted into an income stream for further serviceability.
- Resulting income stream into shares for capital growth and dividend income.
- The returns from the shares into your LOC to reduce the property loans
and thus create opportunity to acquire more property.
A wonderful cycle of optimised use of the same dollar 6 times.
Home:
1) Capital growth
2) (Not paying rent to someone else)
Investment Property:
3) Capital growth
4) Rental income
Cashbond: for cashflow and extra serviceability
Shares:
5) Capital growth
6) Dividend income.
Anyway, this is how I do it.
Regards,
Steve
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