RE: It feels good when you stop! - GEARING
Reply: 1.1
From: Duncan M
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Dirk, you just need to appreciate that "GEARING" (not negative gearing) is
what has the great potential to make you wealthy..
Taking the few paltry dollars we might have beggared or saved and using them
to borrow a whole load more of them to put into an appreciating asset.
Taking the $20 you have, letting the bank lend you $80 and buying a $100
house and letting the tenant service the interest bill whilst the property
appreciates.
$20 invested at 10% after 10 years is worth $47.16
$20 geared into a $100 asset that appreciates at 10%pa after 10yrs is worth
$155.79
Some people just to choose to gear in a manner that derives tax benefits at
the same time ie. Negative Gearing, its a combination of two aims.
Some people just to choose to gear in a manner that derives income at the
same ie. Postive Gearing.
Some people (like me) choose to use Structured Gearing, a mix of properties,
some high growth, some high yield, overall a reasonably neutral income
position but after taking advantage of Non-Cash deductions (depreciation)
it's a Tax Advantageous portfolio.
Duncan.
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<TITLE>RE: It feels good when you stop! - GEARING </TITLE>
Dirk, you just need to appreciate that ="GEARING" (not negative gearing) is what has the great =potential to make you wealthy..
Taking the few paltry dollars we might have beggared =or saved and using them to borrow a whole load more of them to put into =an appreciating asset. Taking the $20 you have, letting the bank lend =you $80 and buying a $100 house and letting the tenant service the =interest bill whilst the property appreciates.
$20 invested at 10% after 10 years is worth =$47.16
$20 geared into a $100 asset that appreciates at =10%pa after 10yrs is worth $155.79
Some people just to choose to gear in a manner that =derives tax benefits at the same time ie. Negative Gearing, its a =combination of two aims.
Some people just to choose to gear in a manner that =derives income at the same ie. Postive Gearing.
Some people (like me) choose to use Structured =Gearing, a mix of properties, some high growth, some high yield, =overall a reasonably neutral income position but after taking advantage =of Non-Cash deductions (depreciation) it's a Tax Advantageous =portfolio.
Duncan.
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