Does it make sense to invest in ETF's/LIC's with money from Offset account

I don't think this is right. Even if dividends are reinvested via DRP you still get the franking credits at tax time, not when the shares are sold. You also pay tax on it at your rate and claim the difference between your (or holding entity) tax rate at tax time.

Exceptions are DSSP and BSP where you ignore income and franking credits, your cost base doesn't change. Would be a nightmare selling part parcels.

 

"- other expenses $860
- So total outgoings are $5360"
are also same in both cases. These expenses aren't going to disappear just because you have find in your offset.
Hmmmm... Hope you are using it correctly.

 

What happens if instead of using ALL of the money in offset, you use say 50% and margin loan the remaining 50%.

You'd pay less interest on mortgage but more on margin loan?

Actually that's prob a stupid idea as margin loans are more expensive than mortgages, but you'd at least keep your cash?

And as long as you have the cash available in the event of margin calls you are not taking too much of a risk?

 

It is possible but I wouldn't bet on capital gain for this exercise. I would rather assume a safer zero gain or loss.

 

If you think longer term, industrial shares have returned 14% pa since 1979. Get in when it's cheap....

 

I aim to keep IP loans neutrally geared by keeping the offset at a specific value. Anything over that can be invested.

I always prioritised paying off my PPOR over share investing. In hindsight, it may not have been the best decision, but it was the lowest risk / reward for me. Rates were higher but shares performed better. But I missed the GFC.

 

IIR LIC Report - March 2017
Do options provide LIC investors with value?

https://dpsi7pmz5b6vt.cloudfront.ne...e/447/Monthly_LIC_Report_March_2017_Final.pdf

 

That is an interesting way to do it.