Strategies for owning multiple IPs

[f_ward]

Eureka!!

Thanks GoAnna!

I did not realise that I could pay some principle off an IO loan - Doh.

That helps me out a lot.

I really have a MINIMUM amount that I am comfortable spending each week for investments but will no doubt have some excess cash lying around from share divies etc... that I want to use to help me fund more purchases in the future thereby speeding things up a little whenever possible.



Cheers

F_ward

 

[silverghost]

Fward,

Sounds like you really do need to treat yourself to a Steve Navra course - he's holding one in Brisbane in Feb 8th & 9th - see Meeting Point or his website. You will not get better value in terms of cash for information and a whole new world might be opened up to you. (Well, it was for me anyway.)

SG

 

[Jamie]

Hi GoAnna!

If you have excess money then you are far better off using it as debt reduction than just spending it!

I agree if you are spending it on anything that depreciates in value - cars, holidays, etc.

But what if you are spending it on another IP? If I had 10k sitting in the bank, I would rather use it as the deposit on another IP, rather than pay it off a principal only to redraw it again later.

Just a thought,

Jamie

 

[Glenn]

Forum newbie corner

If anyone would like to see a forum that encourages new members, check this out....

http://forums.overclockers.com.au/index.php?s=

Glenn

 

[Jamie]

Hi F_ward,

I guess in the end, what method you use comes down to the type of investor you are. Like GoAnna said, thats why we are all searching for our own personal method of wealth creation. What works for one person will not always work for another.

If you are only comfortable spending a certain proportion on investing, then make this your basis and learn as much as you can about the methods that you find most suitable.

I also agree with silverghost, the $286 for Steve's weekend course will be some of the best money you will ever invest, and all of this type of stuff will be covered much more eloquently than I am doing! And the foods great

Regards,

Jamie.

 

[GoAnna!]

Hi Jamie

"I agree if you are spending it on anything that depreciates in value - cars, holidays, etc.

But what if you are spending it on another IP? If I had 10k sitting in the bank, I would rather use it as the deposit on another IP, rather than pay it off a principal only to redraw it again later."

I guess a deposit for another ip is "investing" in my head rather than "spending". Just semantics really. The thing is while it is "sitting in the bank" you are far better having it reduce interest on any existing loans than earning some pittance of interest which will then be taxed. You can then of course take it out again to "invest" when you are ready. With a 100% offset account there is no extra hassle involved.

Just my thoughts

 

[voodoo]

I agree with jamie on this one....and this is the hardest thing for people to realise about IO loans.
They all say that you are not paying anything off the property. this is true, but why pay the principle, even if it is only $50wk.
for $50wk I could have another 250k IO loan tax deductable. But the money you pay off the priciple is not deductable.

cheers

 

[Jamie]

Nice Avatar GoAnna!!!

 

[Sim]

Re: Forum newbie corner

Originally posted by Glenn
If anyone would like to see a forum that encourages new members, check this out....

hehehe... they love new members so much that they don't even allow GUESTS to browse and see how good the forum is (like we do) ! You have to register before you get to sample the goods. Sheesh !

 

[Sim]

Originally posted by tonyd
The old forum used to have an "Apprentice Millionaire Guide" (or something like that). It was a collection of threads on FAQs.

Yup, and one day when Mike gets a couple of spare seconds - he has promised to rebuild that FAQ for the new forum (the old one became useless to us after the migration). We have a forum ready and waiting for him to use - just need those spare seconds (about 8 million or so should do it).

 

[GoAnna!]

Thanks Jamie

Originally posted by voodoo
I agree with jamie on this one....and this is the hardest thing for people to realise about IO loans.
They all say that you are not paying anything off the property. this is true, but why pay the principle, even if it is only $50wk.
for $50wk I could have another 250k IO loan tax deductable. But the money you pay off the priciple is not deductable.

cheers

I can only agree with you if

the investor is held back by servicability issues rather than lack of equity

is using negative gearing as a strategy

or is focusing on tax deductability (losses) rather than creating a profit.

HOWEVER

If you have hit the financing wall because your equity has run dry

You purchase positive geared property that puts money in your pocket rather than taking it out

You don't need the money yet because you a) are waiting to settle, b) haven't found a property to purchase yet

Then your excess cash flow each month needs to go some-where. I would suggest that offsetting this money against exisiting debt would reduce your interest payments (increase profit/decrease losses), increase equity and demonstrate to the bank that you are more than comfortably covering your current repayments.

 

[Les]

G'day Goanna,

I love your signature line to bits!!!

"Women and cats will do as they please, and men and dogs should relax and get used to the idea." (Robert A. Heinlein)


It reminded me of a saying I saw in a "Cat" book (you know the ones..) - it said something like "A dog has a master - a cat has staff" - broke me up

Regards,

 

[Mr. Fabulous]

Here's another idea: you could put the money into shares (yes, yes, I know that is the forbidden word and I know they have performed poorly lately) but I'm just saying that there are alternatives, you may be able to make a better return than even an offset account. Just another point of view.

Mark
'no hat, some cattle'

 

[geoffw]

Originally posted by Mark Laszczuk
Here's another idea: you could put the money into shares (yes, yes, I know that is the forbidden word and I know they have performed poorly lately) but I'm just saying that there are alternatives, you may be able to make a better return than even an offset account. Just another point of view.

I will be putting a sample amount ofmoney into Steve Navra's fund to see how they perform.