Tax Effective Investment Option

G'day Everyone

Wondering if someone can point me in the right direction. I'm 38 years old finally have paid of my house which is at least worth $500K however I lack any other kind of investments and everytime I do my tax I get pretty much nothing back but pay alot to the ato. My take home income is pretty dismally probably about $55000 p.a. Now that im actually starting to save some money im thinking about buying shares or something else that will work to my advantage. I currently pay a bit extra into my super only $50 per week and don't really see any point increasing this as lets face it I could be dead before I receive any off it. Can anyone give me any good ideas ive heard of being able to get a loan to buy shares and the interest on that loan could be tax deductible. Also does anyone know any really good financial planners in the Newcastle region that may be able to help.

Thanks

 

I’m not sure lending money right now to purchase shares is great idea. Especially if you have no experience in the market.

I am certain borrowing money, just to get a tax refund is not a great idea.

Paying $15,000 per year in tax is not that much tbh.

 

Never invest for the tax benefits. If you are serious about investing in shares, read up on that first.

Strategically, think about how long its taken you to pay off the house. Then think how much you would have if youd invested earlier.

 

Try Kyle https://millennialindependentadvice.com.au

 

Not sure what you mean by this. I know I shouldn't just be investing for tax benefits but why not otherwise I could just be like everyone else and buy the best cars eat out spend lots on material items goto bali and never have much money.

I have lost a substantial amount on an investment property a while ago and not heaps keen to go back there I know why i lost money part my own fault but in reality I worked my butt off built a new house and paid it in about 6 years flat. I probably am a bit backwards but now i have a roof over my head which no one can really take from me now so im ready to invest. Most people do it the other way around i know that but im not most people I guess.

I probably should have mentioned im purely not investing for tax benefits this is more of just a bonus for me as if I had an IP for example I would get a fair chunk of my tax back from interest on the loan at the moment im getting sweet fa. My main reason for investing I guess is to mainly setup a portfolio for retirement so would be interested in shares with good dividends etc. Ive also been reading up on the fire plan im sure everyone has heard about it financial independence retire early.

 

Spend a bit of time reading this section of the forum to see if you would be interested in investing in shares - the dividends they pay can help you build an income for the long term - but it's not for everyone so you really need to read about it to see if it's right for you.

 

Does anyone else see a problem with that statement?

Anyways it's the OP's call but I feel it is a pretty darn good result to pay off the mortgage in that amount of time with the stated income I wonder why not take, say, half of the amount previously paid towards the mortgage and start investing that in their poison of choice to get some idea before taking on debt.

 

Well, at least it was able to be offset against other capital gains.

 

Strong Money Australia probably has all the info you are after.
Plenty of info on this forum so best to read a bit and ask any questions about what plan you come up with for some constructive/helpful feed back.
Start off slowly as Peter Thornhill would say "feel the heat".
Good luck !

 

Would you care to go into a little more detail as I and many others do/would like to gear up to buy equities
Thanks

 

OP could just use equity release to buy shares instead of using equity to secure Margin Loans to buy shares,
Much less riskier obviously, I understand they won't be able to buy huge amount of shares but can start small and work their way up, save to buy more shares, re-invest dividends etc.
Not advice just a thought, good Financial Planner would be able to help

 

One of my rules:- never borrow to buy shares; only use cash.

Learnt from bitter experience .

 

You keep talking about getting a big return though. Would you still be willing to invest if it made your end of year tax bill higher? Because it might.

 

Generally speaking, if your end of your tax bill is higher it means you have made money.

If your tax bill is lower, it means you have lost money.

I'd rather make money.

 

To all of the members of this forum who are thinking of retiring on a share portfolio - it can be done.
This year I made over 10% on my share portfolio plus franking credits and I have had to pay tax for the first time since I sold my industrial properties.
I was so nervous wondering how I would survive and manage financially after I sold up and realised I would have to make my money really work for me now I had retired from a business life and no monthly income from tenants - and I had very little experience with shares. So far, so good - however I do realise that not all years will be so kind.
Plus I was very happy to read this morning about the coming dividend from Wesfarmers ...

 

Still not convinced.

 

Hi balwoges is that 10% dividends only? or is growth included?