Cashbond Risks?

[Kevmeister]

I think I have acquired a vague (I originally wrote "modest") understanding of cashbonds. But I have some questions:

1. What funds do you use to purchase a cashbond in the first place? Eg. can you purchase a cashbond with "borrowed" funds (including PPOR equity) or must it be funds you "have"? Or is the cashbond itself secured against property?

2. If you have say $150K to purchase a cashbond in the first place, would it be considered "safer" to simply use that to setup appropriately sized deposits to achieve the correct serviceability?

3. It's probably an understatement that this technique requires capital growth to work! What steps does/should one take to ensure their investment is not spiralling out of control?

4. Is it fair to say that cashbonds are a way of accessing equity growth in advance of it actually happening and that, because of this, you are increasing your leveraging ability?

Thanks

Kevin.

 

[Steve Navra]

Answers:

Hi Kev,

To answer your questions: YES!

Please refer to the many other posts on this subject, and I do go into hours of detail about everything you have asked, at the courses.

I'm not holding back!
It is just t o o l o n g to explain it all here.

Regards,

Steve

 

[Alan H]

Hi Steve........Kevin.

I tend to agree with both of you.

I think attending the Course is a great idea but as long as Steve is happy to respond to questions, I don't think Kevin's questions are unreasonable on the Forum either.

I may not have had this opinion a year ago, but since then I think many members of the Forum have attended Steve's Seminars and would find further, more detailed discussion useful. I guess what I'm saying is that many Forum Members are not as 'new' to this procedure now and may find additional discussion useful and educational.

More detailed discussions in this Forum would only help to complement Steve's Course and I don't think would necessarily be 'taking any business away' from Steve.

Steve's Course is great as an introduction as it only has about 40 people which has certain benefits. However, questions in this Forum would also have complementary advantages in that a wider range of people can comment and discuss the issues.

Answering more detailed questions is obviously up to Steve, but if he was willing to provide the time I'm sure he would have an appreciative audience.

 

[Steve Navra]

You've asked for it!

Hi Alan,

Well yes of course I am happy to answer any questions.

Hmmmm, but it will have to wait a week or so.
(Still unpacking home and office, uuuuuugh)

Should be on top of it all, with most in place by the weekend.

Regards,

Steve

 

[NigelW]

moving is a pain in the proverbials...but ultimately a cathartic experience...gives you the chance to get rid of all that junk you've accumulated and attack things with a new focus!

 

[Alan H]

Thanks Steve. That would be good.

I've actually posted a couple of Cashbond/Annuity questions in the last couple of weeks. Perhaps you could include responses to those as well.

Good luck with the unpacking.............

 

[paulzag]

::moderator hat off::

At the same time I fully support Steve (or anyone else) to not go into extreme detail on something that is best presented in person.

Some investment areas cannot be efficiently covered in forum posts and I would rather Steve's applied his insight and intelligence to a range of topics rather that reaching the point where he is merely re-hashing seminar stuff.

Comminities are made by the strength of their members contributions.

Hopefully I'm expressing myself clearly - I've just done 8 months of Superannuation reconciliation.

Paul Zag
Dreamspinner

 

[Alan H]

Not to me your not Paul.

There may well be questions that are more appropriate in a one-on-one(which Steve can obviously mention), but there may well be others that are of interest to many of the Forum.

To be honest, while I can see where your coming from I also think your attitude(in this instance) goes surprisingly close to stifling discussion, not increasing it.

One of the descriptions of Innovative Techniques Section is the discussion of Cassbonds.

Fine. Either let Forum members have an open opportunity to discuss this in any detail they wish or remove the description.

 

[paulzag]

Originally posted by Alan H
Not to me your not Paul.

There may well be questions that are more appropriate in a one-on-one(which Steve can obviously mention), but there may well be others that are of interest to many of the Forum.

To be honest, while I can see where your coming from I also think your attitude(in this instance) goes surprisingly close to stifling discussion, not increasing it.

One of the descriptions of Innovative Techniques Section is the discussion of Cassbonds.

Fine. Either let Forum members have an open opportunity to discuss this in any detail they wish or remove the description.

I was afraid it wan't clear.

Try again Paul
1) As moderator I have no issues with this thread. It stays and is relevant. I don't want to stiffle discussion.

2) My personal opinion is that Steve doesn't have to answer every question posed on cashbonds. He has chosen to do that in the past and may wish to keep doing so.

However I have seen too many online communities collapse under their own weight. One way that happens is when contributors stop giving because it's the "same old same old".

The other danger is contributors get painted into a corner by demands to answer in detail stuff that is covered elsewhere. For some past contributors it felt like people expected it rather than valued the information.

So my point is "thanks Steve for any and all answers, I appreciate you are not obliged to do any of this".

Anyway my post is extremely off topic, but provided for insight and clarification.

 

[Alan H]

Paul,

Yes.....I think we may have both misunderstood each other.

Firstly, I totally agree with your point "thanks Steve for any and all answers, I appreciate you are not obliged to do any of this".

Goes without saying.... but there you go.......we've both just reinforced our thanks for Steve's informed contribution.

If I was to use the Finance Section as an anology and emailed in all my bank account details, actual property purchase price, wife's income, value of my furniture etc. and asked for a precise borrowing capacity, I agree that this is the sort of detail we could do without. Sit down with a Mortgage Broker and discuss your individual situation in detail would be the obvious answer. An interesting aside though would be that we have a few Mortgage Brokers on the Forum that provide valuable and appreciated input. Input for Cashbonds or Annuities, at least from my reading of the Forum is incredibly more limited.

I've been to Steve's Course and enjoyed it. So presumably if I still have some general questions, that are not individually specific in nature, then I can only assume they are questions that weren't necessarily covered in the Course and MAY be of interest to others also..........and let's face it.........Steve is never going to be able to answer all questions in the Course. Why? Well to begin with, some of what Steve is discussing may well take a little time to absorb and prompt questions many weeks or months later. Another reason is that quite simply.....things change.

Is it fair to ring Steve up and ask him a Cashbond type related question every time you think of it? Steve may well say go ahead(on the other hand he may well say go something else ) but surely if the question is not individually specific in nature and Steve is happy to respond, the Forum has got to be a more efficient medium to provide answers. My humble opinion anyway.

Finally, I think the strength of this Forum is twofold. One is the excellent reponses that are posted but another vital facet is the wonderful questions that are asked.

 

[investor]

HI all

I have to agree with alan on this one. The reason why I became a member on this forum is so that I can learn something new and give my advise and opinion to the best of my knowledge whenever I can.

I know nothing about cashbonds so how can I even consider going to a course that I don't even know what it's about.

Imagine if everytime u asked a question in the accounting section Dale replied by read that book or come and see me in my office I can't explain. Then this wouldn't be a forum were people could expand their knowledge about investing and at the same time help others to.

I have read 3 threads on cashbonds with absolutely no valued info in them at all and still don't know anything about what it is.

Regards

 

[Macca]

hi Investor,

this is a link to the Navra site on cash bonds. I was like you, never heard of them, until I read this. It gives a bit of background, hope it helps

http://www.navra.com.au/includes/writings/cashbondfirst.php

Macca

 

[investor]

Thanks Macca