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"So before one can actually start to USE the actual CAPITAL to live on, a sound structure of regular income for the purposes of covering all contingencies MUST FIRST be in place." Its all good Steve. :D My portfolio is at about chapter three now. Trying to get it all balanced. I'm getting a...

I have to say I'm with Keith J on this one...Chapter 3 seemed to me more about reinvesting equity/Lazy dollars to create positive cashflow :rolleyes: . We are all comfortable with this! :D But it doesn't fit my definition :o of the debate about LOE ie drawing down equity and spending it on...

Simon & Julie, Thanks for your replies. I put heaps of smily faces on mine so you would know I wasn't being nasty :o but rather hoping for a meatier answer. Thanks Simon for the nice meaty example :) . I'll go away and ponder it with my calculator. Plenty to think about. Cheers MJK :D

Thanks Steve! for your persistance, patience and willingness to help us all understand. :D :D I must confess I have a foot in both camps at the moment :o and look forward to more discussion. Please continue with the topic. :) Thanks Duncan M for your great spread sheet from another...

It is like having a well run rural farm. When times are tough the good farmer has enough food for his stock stored up to see him through. For me, equity is like the farmers food store. Other farmers who don't have enough will end up selling their farms to the farmer who holds out the longest...

MJK - you're failing to take into account the potential growth of the assets which could produce a far greater return in the longer term rather than investing unencumbered funds. Sim, I hadn't forgotten about CG at all. What I was alluding to was that if you didn't want to retire on...

"Why wouldn't you rather draw down the net equity (Up to 80% LVR) and invest these dollars for a return??" Unencumbered funds have so much more income producing power dont they. eg. 100K equity realise by sale may leave you with 70K after selling costs and tax. The 70 k invested into 10%...

My asset base is at a point where it will continue to grow with capital gain and the equity is retrieved through the rents. It may not make sense but is possible even with a negative cashflow as long as your asset base and spending are balanced. kind regards Simon Simon, I wish you would...