Financial tips

[mflying]

http://www.news.com.au/finance/mone...hey-ever-learned/story-e6frfmcr-1226785523291


how does it work for a person
that has no deductible debt (i.e No PPoR mortgage)
on good income paying reasonable higher tax
Most IPs cash flow neutral(north of $2M) or slightly negative[/LIST]

would you park money in IP offset account or do what??

would love to hear from in house finance gurus and successful investors.

 

[Aaron_C]

I think a person in that situation knows what they're doing.

 

[mflying]

hahahaha Aaron!!!!

good "on the fence" answer!

 

[alexlee]

Really just boils down to one thing, doesn't it? 'Do I want / need to expand the portfolio and take on more risk to reach my goals?'

Diversification into shares, for example, might make sense if you have excess cash. Might make even more sense if you have a partner who isn't working.

 

[Terry_w]

http://www.news.com.au/finance/mone...hey-ever-learned/story-e6frfmcr-1226785523291


how does it work for a person
that has no deductible debt (i.e No PPoR mortgage)
on good income paying reasonable higher tax
Most IPs cash flow neutral(north of $2M) or slightly negative[/LIST]

would you park money in IP offset account or do what??

would love to hear from in house finance gurus and successful investors.

If they didn't have an offset where would their money go? ie the rents, wages and day to day cash?

Do they have a spouse on a lower income?

Could they invest the cash for a return better than 5%? Even if they could there would still be wages and rents coming in - even small amounts could save interest.

 

[mflying]

If they didn't have an offset where would their money go? ie the rents, wages and day to day cash?

.

I personally, keep offset for Each loan and rents going in and expense(inc loan repayment) coming out of that particular accounts.. whatever left over,if any keeps accumulating!

 

[mflying]

Really just boils down to one thing, doesn't it? 'Do I want / need to expand the portfolio and take on more risk to reach my goals?'

Diversification into shares, for example, might make sense if you have excess cash. Might make even more sense if you have a partner who isn't working.

+1.

I believe investing in property is one type of vehicle for wealth creation, and advantage of higher LVR (bank money )is fuel of that vehicle.

 

[alexlee]

I believe investing in property is one type of vehicle for wealth creation, and advantage of higher LVR (bank money )is fuel of that vehicle.

But if you already have a good sized portfolio, it might make more sense to get some high cashflow investments, because you don't 'need' as much leverage.

 

[mflying]

Alexlee,

That is what i am looking at, at the moment with not much sucess of choosing right type of vehicle.

Share is not my thing at the moment, as i dont know much about it.

Feel free to suggest any other type of investment that has high cash flow. (Growth is not so much important)

I am doing small property development as that is working in my favor so far.

But to keep continue doing that, i guess, i need high cashflow investment to take on bigger project to absorb in holding cost while building.

 

[Terry_w]

I personally, keep offset for Each loan and rents going in and expense(inc loan repayment) coming out of that particular accounts.. whatever left over,if any keeps accumulating!

Thats one way of doing things. Hope you don't have any non deductible debt though as you could be paying more interest.

 

[china]

A lot of us are in this situation where we do not have any non-deductible debt, ie. no mortgage on PPOR. I think if you have enough leveraged investments, they cannot all be cash flow neutral or positive. Therefore, you will need spare cash from either working income or investment income to fund some of these investments. Presumably, you need some cash flow negative investments for some tax benefits.

 

[westminster]

http://www.news.com.au/finance/mone...hey-ever-learned/story-e6frfmcr-1226785523291


how does it work for a person
that has no deductible debt (i.e No PPoR mortgage)
on good income paying reasonable higher tax
Most IPs cash flow neutral(north of $2M) or slightly negative[/LIST]

would you park money in IP offset account or do what??

would love to hear from in house finance gurus and successful investors.

Mine goes into offset to fund holding costs on development

 

[mflying]

Mine goes into offset to fund holding costs on development

I am doing same at the moment. but my repayment on development is at the moment around $1000.. i think just after jan. builder would make claim for two stage in one go, as he is been working during xmas time.

i guess it is not a bad idea for parking funds in construction loan offset while it is getting build.

not sure what Terry would say on this (Tax point for view)