Borrow to invest $15k/year in shares

Discussion in 'Share Investing Strategies, Theories & Education' started by ShireBoy, 30th Nov, 2017.

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  1. Peppas

    Peppas Well-Known Member

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  2. Chris Au

    Chris Au Well-Known Member

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    There is great commentary on the Nab equity builder thread which gives another option. Must be mindful that we are at lower IR at the moment and what does a rate rise or two mean if you were to leverage the PPOR/IPs too much.
     
  3. Stoffo

    Stoffo Well-Known Member

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    Coffee :D
    I'm in :cool:
     
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  4. ShireBoy

    ShireBoy Well-Known Member

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    Yeah this is what I'm worried about. I'm not worried about the psychological aspects, because I aim to HODL my shares into retirement.
    I'm still just doing as much research as possible. I signed up to Sutherland library last month, and have been browsing the financial sections there. Almost finished reading Motivated Money, and starting Boggleheads guide at the same time.
    I'll hopefully be seeing my broker towards end of this month to crunch some proper numbers and see what my options are.
    I'm starting to think of a small loan split to give me the $15k I want to buy shares with, and another max split with intention of buying property.

    But I've got ~$18,000 owing on HECS, so I might do a little math and see what lump sum payment I need to do to get me close to final payment come EOFY17/18. So once that is completed It'll free up approx $8,400pa back to my gross wages.
     
  5. Martin73

    Martin73 Well-Known Member

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    hodl
    An "on purpose, kinda" misspelling of "hold" - first coined in the altcoin sphere in 2013 & later said to imply "Hold On for Dear Life". It reinforces the financial concept that you don't sell in a Bear Market. You ride it until the bitter end, or the price comes back up. (Hint: Crypto prices usually comes back up.)

    PSA - some of the other definitions at Urban Dictionary are definitely NSFW.
     
  6. Hodor

    Hodor Well-Known Member

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    Always keen for a coffee :)

    I am presuming you're using vanguard retail funds currently for your long term investment. Can't get past the fees on this product myself, especially for long term holds. The escape is to pay CGT when the balance is sufficient and go wholesale, which isn't ideal.
     
  7. ShireBoy

    ShireBoy Well-Known Member

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    That's correct. I wasn't 100% sure what I was doing at the time, and signed up to the retail funds of VGS and VAS. But I do like the BPay deposit system, and the nice tax statements they whip up for you each year.
    Part of my research is seeing what mix of assets is right for me, so I'm not totally committed to these two, and am looking at LICs as well.
     
  8. Terry_w

    Terry_w Lawyer, Tax Adviser and Mortgage broker in Sydney Business Member

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    If you have no property with equity then you have 3 choices
    a) related party loans
    b) margin loans with the shares as security
    c) pay down an investment property loan and reborrow

    and a forth possibily
    d) personal loan.
     
  9. Peppas

    Peppas Well-Known Member

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    Thanks for the reply @Terry_w

    I don't understand option c) - if I am already claiming that investment loan interest, paying it down and reborrowing would still be the same amount that I can claim from, no?
     
  10. Terry_w

    Terry_w Lawyer, Tax Adviser and Mortgage broker in Sydney Business Member

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    Possibly, but
    a) not if you were going to live in the property at some point, and/or
    b) the owner of the property will be different to the owner of the shares.
     
  11. Noobieboy

    Noobieboy Well-Known Member

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    Did you hear about margin loans? These are used widely with shares. But be careful as with everything else do you own, very detailed, research.