help to reduce tax / debt

Fact is Lollypops, with that sort of income, your financial situation is terrible. Most people here have achieved much more financial security than you have with much lower incomes (though with a cheaper house than you have - that's actually part of the REASON why they have more financial security: think about that. Having an expensive house isn't necessarily a sign of financial security.) The reason people aren't answering your specific question is that you're naive about money, which means you're not going to be asking the right question either.

The classic (and wrong) reason people buy investment property, for example, is to negatively gear to reduce tax.

You're basically a fat person going to a gym full of fit people asking 'I want to know which exercise machine to use to lose a few kgs'. The fit people are telling you what you actually have to do is change your lifestyle of sitting in a sofa smoking and eating chocolate, instead of finding the 'right' exercise for a few minutes a week.

If you don't understand that, then good luck. Your husband is in the sort of income level where, if he continues to do well until retirement in his 60s, might actually earn enough for you to retire on.
 
Hi, to address your original question, there's some logic to selling present PPOR to buy 2 lesser properties, one to live in & one to rent out.

Say, buy 2 houses in a less expensive suburb for $550K each.

$600K becomes an investment loan.

$200K becomes a PPOR loan. P&I = $1500 per month

Rental income = $22000 [guesstimate] rental expenses = $47000 [guess]
depreciation = $6000
Total "loss" = $31000 tax offset = $12000+
Out of pocket costs = $2000 per month

It's a fairly simple way to have an extra $2500 per month while paying down a loan at the same time.

What's not to like about the idea?

KY
 
my kids have packed lunches everyday, my husband takes a packed lunch every day, he doesn't buy a muffin to go with his coffee even occasionally, he goes to the gym to keep fit and maintain his weight he doesn't have a sweet tooth and although i know he did used to buy coffee daily, he now can't as it doesn't agree with him. he eats out a lot with clients (on expenses) and this more than satisfies anyone's need for nice food and fine dining. i make all my own food, i always have, there isn't that much in the way of leftovers when you have a family of 6 but of course i freeze or refrigerate what is left. i enjoy cooking and baking and can't remember the last time i bought a cake. i buy homebrand food for a lot of items, not everything and i probaby could make a big saving on food by not buying so much fruit etc but where do you draw the line.
yes, it was school shoes that someone suggested i get from the op shop, i wasn't quoting anybody i was using it as an example but incidentally i need those as well as school trousers.
my kids don't really get any pocket money, they don't need it and the older ones both have jobs. i'm not continuously handing over money for treats to anyone, they hardly get anything. including school shoes.
i'm not too proud to do anything or do any job or drive any car, my main stumbling block is my husband and who can blame him when he sees his whopping pay slip every month, i dread opening my mouth to even speak to him about our situation, he just throws his hands up and says sell the house then! but there's a lot of stuff we need to do before we sell anyway, so he knows it'll not happen. i've never liked living here, i hate the area, i hate the schools, i've got no friends nearby, and it's hard putting a smile on your face when you've got to juggle money week in and week out.
i really like the idea of moving out and renting. the rent on the mansion would be probably over $1,000 per week....that's just guessing, it might be more.
i can't think of anything else for now, i thought i have disclosed pretty much everything except maybe my credit card details and PIN!
 
Wow, after reading this thread all i can say is me and my wife are super conservatives for having only one car, buying a modest PPOR on a combined NET income of more than 20K per month.

I applaud the OP for keeping the economy hot as where would we be without people spending on cars, big houses and private schools.

My serious advice to you ; seek professional financial counselling, financial stress does not only ruin your bank balance, it can also destroy your relationship with your husband.
 
Hi, to address your original question, there's some logic to selling present PPOR to buy 2 lesser properties, one to live in & one to rent out.

Say, buy 2 houses in a less expensive suburb for $550K each.

$600K becomes an investment loan.

$200K becomes a PPOR loan. P&I = $1500 per month

Rental income = $22000 [guesstimate] rental expenses = $47000 [guess]
depreciation = $6000
Total "loss" = $31000 tax offset = $12000+
Out of pocket costs = $2000 per month

It's a fairly simple way to have an extra $2500 per month while paying down a loan at the same time.

What's not to like about the idea?

KY

Better still, use IO for $12Kpa and gain an extra $500pcm.

The $550K property could be something that could be CF+ earning you $15,500 after tax. thus paying for the mortgage on your PPOR!!!

Your situation has so many ways to turn around into a positive outcome that I am very confident that you will find a way through this.

The hardest part is to take action, this being weighed down with emotional attachments to past choices.

I think the key is trying to break that link and then the actions will follow.
 
the lease company HAS increased the payments on the car, hence it has now become an unaffordable expense and i intend to speak to them about it but as it is in my husbands name it is difficult to access all the info i need.

Just FYI, I wasn't having a go at you asking about how a lease on a car can all of a sudden get more expensive. I was trying to learn something from this thread. Oh well, guess I won't. All I wanted to know is did the cost change after contracts were sign and also if that's the case how they can do it.
 
... he just throws his hands up and says sell the house then! but there's a lot of stuff we need to do before we sell anyway, so he knows it'll not happen. i've never liked living here, i hate the area, i hate the schools, i've got no friends nearby, and it's hard putting a smile on your face when you've got to juggle money week in and week out.
i really like the idea of moving out and renting. the rent on the mansion would be probably over $1,000 per week....that's just guessing, it might be more.

I know you are feeling attacked, but most people here are trying to help.

The bit in red really jumps out at me. Why are you living in the $1.4M mansion if you never liked living in the house, never liked the area, hate the schools and have no friends nearby? How did you choose where to live. Who drove that decision?

If your husband is throwing up his hands and saying "sell the house" that either sounds like he doesn't care about the house or area or might be feeling frustrated and wanting to pick the easiest way to solve the problem.

If neither of you much care about the house/area/schools, then I believe selling the house and buying something you both are happy with is the easy answer... but you must find out where the other money that is unaccounted for is going.

And I say that as someone who really doesn't live to a budget (nowadays), but have done so for most of our married life. Each month, I have my spreadsheet. It coincides with the closing date of our credit card. I enter my part-time income (roughly - I don't have fixed hours), the rent coming in. Hubby is "retired" so that is pretty much all that comes in. I enter the loan repayments and update it regularly to make sure we have enough to clear the credit card at the end of each month.

We are more comfortable now than in past years, so once our fixed expenses are covered, we pretty much do what we like with the rest. It helps that we are not big spenders and our youngest is nearly finished high school. We have much more freedom to spend what we want, when we want than any time in the past.

So many times when we had young children hubby would say he'd love a beer, but we didn't have enough to buy a beer. That one beer was a luxury we didn't have the money for. So I'm totally understanding where you are coming from.

I do know that at times through our lives, when we have had money sitting in the bank after the sale of an IP (for example), our spending loosens and it is very easy to spend more without even knowing where the money is going. I'm thinking that with such a high income coming in, you really need to understand where it is leaking (other than the expenses you have identified) and try to turn that situation around.

Stick around, don't let the jabs get under your skin, and try to accept that you need to hear some hard truths to turn around the situation you find yourself in. Nobody likes hearing this stuff, and we have all made mistakes, so I think most people can relate to having to make changes in order to change old habits and get on top of debt and bad choices.
 
Can't be bothered reading all this hilarious thread. Not enough hours in a day.

Investment 101

1) Employ your labour

2) Delay consumption

3) Accumulate income producing capital

4) Slowly wind down labour and consume income from capital outputs whilst preserving the actual capital.

The problem seems to be that stages 2 & 3 are missing from this financial plan so in substitute you wish to reduce tax to help finance consumption.

To quote Charles Dickens:

"Annual income twenty pounds, annual expenditure nineteen six, result happiness. Annual income twenty pounds, annual expenditure twenty pound ought and six, result misery"

Cheers,

Rob
 
FYI the reason the lease company have increased the payments is because they say the running costs of the car have exceeded their original costings.

we moved to what is considered a salubrious area and was a bit of a compromise but actually, as i have discovered only since living here, it is a salubrious area added on to lets call them less salubrious ones, most of the neighbours, in fact ALL of them send their kids to various private schools, mine are at the local public one, my younger two are with kids who use the c word and talk about rape. it's not the public schooling system i object to but the families that attend them have some issues going on that i'd rather not mix with. call me a princess on that one. the school considers the families disadvantaged,not that ive spoken to them about it. one child who came for a playdate pee-ed in a tunnel in the playpark and nudged my son and said 'watch this' when another child crawled through, he thought it was great.
so basically, the house is lovely but expensive, the area is kind of superficially nice, i don't like living here because of the bad vibe i get, we've had stuff pinched from the garage, the garden.....it all adds up to why you don't like somewhere. i can't believe that schools just 20 minutes away from where we used to live could be so dreadful. we didn't buy the house thinking great we'll hate it here and you don't find out some things til you're living somewhere. oh and can i just say, my husband doesn't think any of this is bad, he thinks the area is great, the local kids are great everything is great. he loves the house, he doesn't think we have a problem. he just thinks i'm trying to kill him by increasing his journey time into work when he already works a long day......he's not the sort of person you can sit down and have a reasonable chat with. if you think i got defensive...you've never tried to speak to him.
to be honest i'm finding it too draining to field so many questions, i do understand that airing my 'problems' on a public forum lay me open to criticism and scorn, it makes a lot of people feel superior to scold someone who they consider to be a reckless profligate but that is exactly the opposite of who i am, i find it patronising and condescending. i am naive and not 'streetwise' when it comes to tax issues or benefits, i'm not smart when it comes to playing the system. we have always tried to do everything above board. that is why my lawnmowing round friend complained that her husband had to pay tax last year for the first time ever and it was $50. my husband pays that every hour. there is something not right about that, whichever way you dress it up.
 
FYI the reason the lease company have increased the payments is because they say the running costs of the car have exceeded their original costings.

we moved to what is considered a salubrious area and was a bit of a compromise but actually, as i have discovered only since living here, it is a salubrious area added on to lets call them less salubrious ones, most of the neighbours, in fact ALL of them send their kids to various private schools, mine are at the local public one, my younger two are with kids who use the c word and talk about rape. it's not the public schooling system i object to but the families that attend them have some issues going on that i'd rather not mix with. call me a princess on that one. the school considers the families disadvantaged,not that ive spoken to them about it. one child who came for a playdate pee-ed in a tunnel in the playpark and nudged my son and said 'watch this' when another child crawled through, he thought it was great.
so basically, the house is lovely but expensive, the area is kind of superficially nice, i don't like living here because of the bad vibe i get, we've had stuff pinched from the garage, the garden.....it all adds up to why you don't like somewhere. i can't believe that schools just 20 minutes away from where we used to live could be so dreadful. we didn't buy the house thinking great we'll hate it here and you don't find out some things til you're living somewhere. oh and can i just say, my husband doesn't think any of this is bad, he thinks the area is great, the local kids are great everything is great. he loves the house, he doesn't think we have a problem. he just thinks i'm trying to kill him by increasing his journey time into work when he already works a long day......he's not the sort of person you can sit down and have a reasonable chat with. if you think i got defensive...you've never tried to speak to him.
to be honest i'm finding it too draining to field so many questions, i do understand that airing my 'problems' on a public forum lay me open to criticism and scorn, it makes a lot of people feel superior to scold someone who they consider to be a reckless profligate but that is exactly the opposite of who i am, i find it patronising and condescending. i am naive and not 'streetwise' when it comes to tax issues or benefits, i'm not smart when it comes to playing the system. we have always tried to do everything above board. that is why my lawnmowing round friend complained that her husband had to pay tax last year for the first time ever and it was $50. my husband pays that every hour. there is something not right about that, whichever way you dress it up.

Lollypop

To make things simple. Take up Dazz's offer for help.

You don't need to understand it all yet , god knowns we dont understand it all. Dazz can do that. He can cut through the suggestions and give the pro and cons of each.

You can "private message" PM him on PM, go to your user profile.

Only he and you (and moderators who are only six or so) can see these messages.

Good Luck, Peter 14.7
 
This thread (particulalry the bit about childrens' mobile phones for Xmas presents and ongoing usage plans) reminds me of an obituary for a member of the Sydney legal fraterntiy I read some years ago.

As a kid he had to walk from Town Hall station to Sydney Grammar school across the sand dunes where Hyde Park now is. He was given an basic allowance which enabled him to buy a simple ploughman's lunch each day at David Jones which he passed along the way.
 
Hi lollypops32,

Don't give up. I put my faith in you, it is hard to face this challenge. No easy quick solutions, but this can be fixed. Please don't think people judge, blaim, etc of your condition.

They really care, and realise your condition is very dangerous. And they advice is trustworthy and works in principal.

Imagine something goes wrong with Job and trust me you don't want this nightmare become reality.

I also put 2 thumbs up on you for bring this to the table, I don't have nerve to do so. And yes, I feel very jealous Dazz want to discuss with you in person.. I wish he offer the same to me..

In your condition every single step is matter. Either you go deeper in debt or step into better financial condition. Put into your mind that every single winning decision you take lead you to better place (Yes another thumbs up for Foxtel, and Gym cancellation)

I can't offer much advise, I have no idea what is in your condition, never been there.. All I want to offer for all forumites is pray.. yes pray for lollypops32, and pray for other member to support patiently

Remember the goal that we want to achive is same yeay!!! last sentences.. Thanks for this thread, I learn so much and my wife just give me kiss and hug. She said that we should open each other and discuss our finance circumtances more in bed.
 
Hi lollypops,

You sound like a great mum - working extremely hard at home maintaining the house, looking out for the four kids and preparing the meals, not to mention the cleaning.

I can only imagine how many years you have been doing this for, and the personal sacrifices you have made.

oh and can i just say, my husband doesn't think any of this is bad, he thinks the area is great, the local kids are great everything is great. he loves the house, he doesn't think we have a problem.

Your husband thinks its great, because he isn't home all day to see exactly what is going on. Not to mention the financial stress that is mounting, making it impossible for you to seek necessary medical care for your children and even buy school uniforms. This is not right.

he just thinks i'm trying to kill him by increasing his journey time into work when he already works a long day......

You also work very hard. In fact, I rekon being a stay at home parent is much harder than going to work, especially caring for four children. Your husband isn't listening to you and your needs.

he's not the sort of person you can sit down and have a reasonable chat with. if you think i got defensive...you've never tried to speak to him.

Hate to say it, but you have marriage issues. Your husband has lost respect for you and won't listen to your point of view. You need to speak with him or else get out of the relationship. From all that you have posted, you are extremely unhappy.

to be honest i'm finding it too draining to field so many questions, i do understand that airing my 'problems' on a public forum lay me open to criticism and scorn, it makes a lot of people feel superior to scold someone who they consider to be a reckless profligate but that is exactly the opposite of who i am, i find it patronising and condescending.

Fair enough, and there is truth in your statement above. I think most people are trying to help though. Lots of very good suggestions as to what to do financially. But, you need to get your husband to listen first before you can implement any of it. This is your greatest challenge.


my husband pays that every hour. there is something not right about that, whichever way you dress it up.

Lollypop, your husband paying tax isn't the problem. It's more that your husband has stopped listening to what you want and what your family needs.

Your problems are to do with the communication and relationship between yourself and your husband. The financial issues are flowing on from this.

Hope you can get some help to get these sorted out soon. Perhaps a talk with Dazz could help, although, I rekon a marriage counselor could be the first step.



Regards Jason.
 
I don't have much to offer in relation to your original question but I did notice that you spoke about exceeding your health insurance for glasses.
I have 2 kids in glasses and a special needs child and glasses myself. HBF only pays so much and when I lost my own glasses I had already used my money for the year. I found http://www.glassesusa.com online and I bought 3 (!!!) pairs for $160 including international courier. Now we all have a spare pair.
For our family we spend a lot of money on medical bills and we do claim that on tax each year as our out of pockets exceed $1500. Our DD (4) has 2 paediatricians, an occupational therapist, a speech therapist, a physiotherapist, an ENT and a GP. Tomorrow we go for day surgery which will be $400 out of pocket.
Depending on the age of your SN child you can get a Carers' Allowance. This is a non income tested allowance and is $114 per fortnight but it also comes with a health care card which will help reduce some medical bills and things.

The advice is solid if harsh - hard decisions are hardly ever nice and this is the internet where people don't have a lot of time to write their replies. Your mortgage is the main place that you can save money. If you can get some solid details and what the percentage is and what type it is, then talk to a broker and see if there is a better deal. Depending on how long you've had it I think there is a VERY strong chance you could get a better deal.
 
Someone (not OP) asked how a novated lease can go up in price. Many novated leases are car + expenses (ie maintenance, rego tyres, petrol, insurance etc). The car loan part is static price but the expenses are estimated based on the type of car and the number of kilometres that you tell the lease company you will do.
For example I have a Mazda CX9 and the car is financed through commonwealth and is a set price per month. I nominated that I would do 13,000kms per year and they worked out how much it would cost to run the car for that many kilometres then divide by 12 and that component is added to the car lease price.
If I do more than 13,000kms they have to recalculate or if I take it in the be serviced and something comes up which is going to be more than what was budgeted for the year then again it is recalculated to accomodate that.
 
Someone (not OP) asked how a novated lease can go up in price. Many novated leases are car + expenses (ie maintenance, rego tyres, petrol, insurance etc). The car loan part is static price but the expenses are estimated based on the type of car and the number of kilometres that you tell the lease company you will do.
For example I have a Mazda CX9 and the car is financed through commonwealth and is a set price per month. I nominated that I would do 13,000kms per year and they worked out how much it would cost to run the car for that many kilometres then divide by 12 and that component is added to the car lease price.
If I do more than 13,000kms they have to recalculate or if I take it in the be serviced and something comes up which is going to be more than what was budgeted for the year then again it is recalculated to accomodate that.

The FBT component is being ramped up.

Cheers,

Rob
 
and a footnote to dazzzz i appreciate your offer to help, i dont mind communicating on a one to one basis and sorry for not acknowledging your offer, it's hard to remember every point that you intended to make once you get started on your reply.

Hi lollypops....

My offer to help cannot stand forever, a few things on my plate. Let me know by PM if you wish to chat no later than today.

No point meeting one on one.....need your husband to be there as well.
 
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