Canterbury Property Services

[Terry_w]

I believe, from what I have read on another fourm, that although they advocate capitalising the interest they don't claim the extra interest incurred on the capitalised portion. This still allows the funds that would have been used to pay the investment loan to be diverted to the paying off of the PPOR loan sooner.

 

[redwing]

They make some big claims, $3k a month return on a $50k investment, anyone who claims to be able to better a general market by more than 20% needs to be prepared to answer the question of how. An earlier post indicated possible share lending.

I thought their strategy involved share market options?

Pete maybe able to give more detail as someone who's successfully used their strategies.

 

[Peter_Tersteeg]

I believe, from what I have read on another fourm, that although they advocate capitalising the interest they don't claim the extra interest incurred on the capitalised portion. This still allows the funds that would have been used to pay the investment loan to be diverted to the paying off of the PPOR loan sooner.

So the non-deductable debt against their own home is replaced by a non-deductable line of credit (which will usually have a higher interest rate and is probably secured by their own home)?

This is essentially a debt recycling strategy. The 'investing' part does have some merit which also comes with some risk. There's also a lot of unanswered questions.

 

[bcole2012]

Hi Greg Reid & PT Bear, ATO determination TD 2012/1 does not come into play with the Canterbury system because they do not claim a tax deduction for capitalized interest ("interest on top of interest") This was all explained to us on our second Canterbury meeting. In any case please refer to http://www.bantacs.com.au/capitalising-interest.php

Julia Hartman owns this accounting firm and there is no higher authority on this subject. She has written two books with Noel Whittaker. Julia is on hand to advise Canterbury clients if required. The ATO have no problem with what Canterbury does. If they did, we would not all be doing it. It's all about getting rid of non deductible debt (home loans etc), then getting rid of tax deductible debts and increasing your income at the same time. Then over time, your wealth should increase exponentially as mine has.

No-one should worry about what the Canterbury cartoon leaves out. It is just an 6 minute introduction. Only a silly company would "give it all away" on the world wide web for all competitors to see. I'm a client of long standing and it all makes sense and has worked over many years. If you were genuine clients, the step would be to meet with Canterbury face to face. Gradually all will be revealed. By necessity, that's how they do it.

 

[Terry_w]

So the non-deductable debt against their own home is replaced by a non-deductable line of credit (which will usually have a higher interest rate and is probably secured by their own home)?

This is essentially a debt recycling strategy. The 'investing' part does have some merit which also comes with some risk. There's also a lot of unanswered questions.

I haven't analysed how it would work, but it is an interesting strategy.

For example, If someone was paying $20k in interest on an investment loan then that is $20k that could have been diverted to the non deductible debt. This could be applied to any investment.

 

[redwing]

From their site, a clients scenario starting at age 34

? STARTED year 2000 - With a net worth of the $80,000 equity in his house and a job at the Post Office.

? AFTER 19 MONTHS - Owned his home outright and had good equity in 2 investment properties. Net worth of $360,000.

? AFTER 24 MONTHS - Acquired $100,000 worth of income producting assets on which he received a passive income of $3000 / month (that was nearly as much as his wage)

? AFTER 36 MONTHS - Acquired a 3rd investment property for well under market value (which later doubled in value while other areas stayed flat).

? AFTER 50 MONTHS - Acquired another $100,000 of income producing assets for a further $3000/ month passive income.

? AFTER 58 MONTHS - Purchased a business for $280,000 which was completely and fully managed which gives $250,000 / YEAR PASSIVE INCOME (That's about what the Prime Minister earns)

Clicky

Summary by age 39

The summary is:

? When I met Steve he owned a house but much of it was debt. His only income was his job.

? Four years and 10 months later, Steve fully owned his home, had $460,000 equity in 3 investment properties, $200,000 worth of income producing assets ($6000/ month passive income) and a business that gives significant passive income (he has no contact or role in the business)

? He doesn't go to work anymore.