smsf geared share investment with protected loan

[WinstonWolfe]

Appreciate any views re using protected loans to gear into equities via smsf.

 

[Ausprop]

I took out a cap garaunteed produt with the bozos at macbank and they have lost every single cent. they are not at all apologetic when june 30 comes around and it is time to pay up the interest. i wish i had just put the money into unleveraged shares - Iwould have a nice $100k stok portfolio by now instead of a depressing sheet tellign me how muh the 'experts' have lost each year

 

[brendio]

I took out a cap garaunteed produt with the bozos at macbank and they have lost every single cent. they are not at all apologetic when june 30 comes around and it is time to pay up the interest. i wish i had just put the money into unleveraged shares - Iwould have a nice $100k stok portfolio by now instead of a depressing sheet tellign me how muh the 'experts' have lost each year

But just think of your tax deduction!! ...ducks...

 

[WinstonWolfe]

I took out a cap garaunteed produt with the bozos at macbank and they have lost every single cent. they are not at all apologetic when june 30 comes around and it is time to pay up the interest. i wish i had just put the money into unleveraged shares - Iwould have a nice $100k stok portfolio by now instead of a depressing sheet tellign me how muh the 'experts' have lost each year

This is not the same animal Aus. It is basically a margin loan not subject to margin calls, for a smsf.

 

[willair]

Appreciate any views re using protected loans to gear into equities via smsf.

I don't know of anyone using this set-up, but if you don't come into the margin call zone then you will pay it out in other ways,higher interest
rate plus a protection premium,so it would come down too the shares you select and the risk factor the interest rate alone would be above 9% so with the tax offsets,franking credits,div's ,CG,the margins may well be very slim,i don't think they would let you invest in 25 cent startup
companies i will have the "PDS" posted out and have a read to understand the fine-fine print,..imho willair..

 

[WinstonWolfe]

I am researching leveraged equities within smsf/s currently, as the laws are changing.

There's obviously a trade off between the tax efficiency of a leveraged super investment, versus the higher rate and insurance premium....and the lenders will be sure to build in a smug profit.

Avoiding call risk might be better met by sticking with the smoothing effect of an index tracker like STW (or LICs) and stop losses. Though I am uncertain if stops can be used with smsf loans.