Have I got this right?

[Andrew]

I was just out walking and I asked myself "what would I do if $50K landed
in my lap?"

My answer was that I could drop it on my home loan and then get a LOC
to invest in something. I figured that I would reduce my non-deductable
debt by $50K.

Then I got to thinking that I could do this with any investment I make,
shares, properties, whatever. Whenever I have the cash to invest I
instead pay off some principle off my home and then withdraw from the
LOC to make the investment.

Eventually my LOC will grow to the size of the original loan but it will all
be deductable.

Am I missing something here? If I can do this then I'm starting to regret
fixing all my loans as I don't have the option to pay back more than $5K
a year off the principle (above the normal P&I payments.)

andy

 

[geoffw]

I hope that you're correct, because that's exactly what I've done over the last few years.

Non deductible PPOR loan is now zero, deductible LOC has financed IPs and other investments.

 

[Simon]

Andrew,

Thats what I am doing as well.

 

[Rixter]

Geoofw Simon,

NO dont do it that way. You guys have it all wrong!

Hows the goverment going to be able to afford paying me when I start collecting my age pension if the government is paying all you guys your tax deductions ??? There has to be a nother way