Hypothetical 5 Million Dollar Question! Assignment/Discussion

If you use IP equity to purchase a PPOR then all you're doing is ensuring that the debt isn't deductible, thus actually increasing your expenses.

 

The goal of the the assignment (the premise of this thread) was/is how to best to use $5m without relying on negative gearing. That is, how best to create cash flow and profit without ever creating a situation where your debt and expenses outweighs your profits.

In this scenario, the more risk adverse approach would be to invest your money where your expenses are tax deductible, as well as producing enough equity to fund increased profits without your profit negating your losses. Thus, your PPOR is a side gig beneficiary of profit taking.

The assignment has nothing to do with sensible/balanced conservative approaches...........but rather, how best to utilise $5M without relying on the aid of negative gearing.

 

Given recent bearishness, you might also consider using it as a deposit on a big margin loan to buy a heap of put options on German and Italian bank equities.

Or, if a little more risk averse, I think ANZ is offering 2.51% on some of it's deposit accounts...

 

Hahaha I love the extremities of the two options:
1). Derivatives trading with a margin loan... Or...
2). Just put it in the bank.

 

Such a broad question... I'd only invest in properties if there was a stand-out deal. Not a believer that properties are a blanket superior class of investments to many other products out there. Only need to open a few threads about certain towns to know.

In fact I could think of about 6-7 asymmetrical deals that would deliver at worst same returns as a metro property now, without the downside risk or debt. If the rule is it has to be properties, I'd hold cash and wait for the right deal to come up.

 

I wish it were that easy for me... I've never had any right deal come along..always had to go hunting and watch carefully........................then pounce!!

 

Sorry to break the news @sash & @datto et al.

The Ol'Druie is broke. (Apparently).

 

Broke? It can't be. I just put $2.25 of E10 in the commodore.

 

VN's cant run on E10 though, or have you upgrade to a VT berlina with altezza tail lights and steelies on the back?

 

That's what my mechanic keeps telling me.

 

Whaa???? The Druie broke.....naaaa....naaahh......the mi pay mob have a triple AAA rated payer called the Commonwealth if Oostralyaaa.

The Druie is the place where all the Boganaires are minted.

 

@sash - the Con'em-wellth of Straylia? Who would've thunk it?

 

Yep....the same mob that floats refugees overtaking the country...sharia law taking over...country being sold to foreigners...terrorists every where....to duck and weave the real issue such as cost of living, dismal health care system....poor infrastructure...etc.

Works everytime...because the Bogan massess buy it all the time....

 

Here's another curveball. Buy properties in mainland Europe, or certain South East or East Asia jurisdictions.