Putting it out there

[merlinnn]

Hi Everyone,

I'm currently pondering my next move and thought I would get some advice from the pool of wisdom here on ASF.

Here goes, I'm currently 34 and married with 2 x toddlers. I have a very stable job, company car, earning 80 to 90k with expectations of 6 figures within 2 years. Will be debt free mid next year, but I currently have little assets outside of super which I currently manage. We are currently renting in a great suburb, close to the beach and very affordable. However being on a single income for the next say 3 years I am unable to buy a property that would suit us without over committing.

Here are my options as I see it. Save a small deposit and buy an investment property be it small residential or commercial something that worst case scenario I can bank roll if not tenanted, damaged etc. Or save save save and start trading outside of super with a margin loan. I don't want to buy our own home as I see it as a bad investment at the moment, besides I cannot afford to buy where we want anyway.

Having run my own business before my biggest peeve at the moment is paying almost 20k a year in tax with little or no deductions available since my employer pays for everything(not a bad thing I know), however I would like to put some of those tax dollars to work.

Any feedback would be greatly appreciated.

 

[skc]

Having run my own business before my biggest peeve at the moment is paying almost 20k a year in tax with little or no deductions available since my employer pays for everything(not a bad thing I know), however I would like to put some of those tax dollars to work.

There are only 2 main ways to legally reduce your tax bill - 1). Structure your income via company/family trust etc, and 2). Borrow to invest. Option 1 is probably not available to you since all you have is salary income - perhaps there will be some benefits using your partner's name (assuming she has no income, also assuming a "she") for certain investments - but talk to your tax accountant/financial advisor/Dad/neighbours etc about pros and cons.

Option 1 is not a free lunch either. Your tax bill is only lower because you have incurred expenses. You've got to make sure the investment stacks up on its own. Think very carefully before investing based on tax saving/incentives alone or you might fall for the next Timbercorp or something like that.

As to your other questions - unfortunately no one can give you financial advice here, and you probably shouldn't take general advice from the forum anyway. Take a look around for people's view and research/decide for yourself. If you have more specific questions about "how-to" etc then you are likely to get specific responses.

Good luck.

 

[burglar]

... Any feedback would be greatly appreciated.

https://www.aussiestockforums.com/forums/showthread.php?t=27343&p=792075&viewfull=1#post792075

 

[waimate01]

As skc said, people here really can't offer specific personal advice. I know this doesn't help in the least, but let me just chip in and say you're doing really, really well. No debt, thoughtful thoughts. Great stuff. Regardless of what direction you choose to take, it sounds to me like there's a prudent helmsman at the wheel.

 

[tech/a]

Regardless of WHAT you do--

**My view is to have your money WORK for you.
Leverage should be also utilized where possible
and Risk minimised.

So given your suggestion

Buy a small Commercial or Domestic property where your 4:1 leverage works for you while your deposit works for you and you are basically compulsory saving---buying the property.
Risk is minimized as you can for X period hold the fort while you sort out new tenants etc---you can insure against vacancy! I like this best.

The same affect can be found trading on margin but you'd have to trade similar amounts to have similar returns
if your trying to do better than interest or the general market.
There are many ways to hedge risk. Don't mind this either if you know what your doing.

Then there are many different things you could do to achieve **
see Passive Income Thread.---even though its off the rails.

 

[merlinnn]

Thanks for the feedback everyone. I'm currently leaning towards the property side of things as I believe I would need at least 60 to 100K to trade with and trying to finance 70% of this would be near impossible. Besides that I am satisfying my trading demons through our SMSF and probably need to diversify given we are not paying off our own home at the moment.

I feel that financing a small unit or commercial property would be relatively easy (have crunched some numbers with brokers). I know I wont get much capital growth for say the next ten years, but if I can get the ATO and the tenant to pay for most of it I imagine it would be a nice acquisition in 20 years. I see this as a better plan of attack as opposed to paying the ATO 20k a year whilst trying to save 80 to 100k for a deposit on a 400k home.

Now back to the passive income thread!!

Cheers

 

[tech/a]

Thanks for the feedback everyone. I'm currently leaning towards the property side of things as I believe I would need at least 60 to 100K to trade with and trying to finance 70% of this would be near impossible. Besides that I am satisfying my trading demons through our SMSF and probably need to diversify given we are not paying off our own home at the moment.

I feel that financing a small unit or commercial property would be relatively easy (have crunched some numbers with brokers). I know I wont get much capital growth for say the next ten years, but if I can get the ATO and the tenant to pay for most of it I imagine it would be a nice acquisition in 20 years. I see this as a better plan of attack as opposed to paying the ATO 20k a year whilst trying to save 80 to 100k for a deposit on a 400k home.

Now back to the passive income thread!!

Cheers

I had an Industrial property I held for 15 yrs.
I originally paid $30K for it.
I then covered another 100K through equity (After the first 5 years)
Then held for a further 10 yrs
I sold the property in 1995 for $165K Now the new owner who still has it has a value of $700k on it.

Point I'm making is that capital gain is likely to be in larger chunks than in consistent growth.

Same really to catching prolonged trends.