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hello need advice on marginal lending?

Discussion in 'Introductions' started by angella, 14th Sep, 2008.

  1. angella

    angella Member

    Joined:
    13th Sep, 2008
    Posts:
    8
    Location:
    Moe
    Hello new to this site and looking for ideas/advice

    Basically I have a broken heart, the man I want doesn't want me. Now I could paint his car with wood glue and cornflakes but I have decided that I would rather drive past him, in a Ford Mustang with diamond rings dripping off my fingers, on my way to another rental inspection as a land lord, while he struggles to find rent money.

    And I am hoping that this forum will help.

    It the moment I am trying to obtain finance to build my dream home, on the five acreas I own, in Victoria. This has developed a sense of urgency as the last council valuation has come in at $189,000. $11,000 below the threshold for land tax.

    I did want to start the process as an owner builder, but of course the bank will not finance me.

    I thought I could go the long way and do it by personnel loans but that may be unpractical.

    Does anyone have any ideas for owner builder finance?

    The other thing I am looking towards doing is buying into shares. If I borrow $5000 from the bank to invest am I best to place it into managed investment funds? Or should I see a broker and buy blue chips, and manage this myself?

    My idea is to start with the inital investment of five thousand borrowed from a bank and add progreesively to it over time. Hopefully them by the time I am 45 I would them have $50,000 plus dividines.

    but this opens up a whole lot of other questions, any ideas?
     
  2. Simon Hampel

    Simon Hampel Co-founder Staff Member

    Joined:
    9th Jun, 2005
    Posts:
    4,619
    Location:
    Sydney, Australia
    You generally won't get a loan from the bank to invest in shares or funds without some equity of your own - either mortgaged against your property, or using cash or existing shares/funds as collateral. You might get a personal loan, but the interest rates are prohibitively high in my opinion and it's not worth the risk.

    Unless you know what you are doing and know how to select shares and when to buy/sell/hold - I'd suggest you outsource the management of them to a fund manager - or if you want to minimise costs, use an index tracking ETF or LIC.
     
  3. angella

    angella Member

    Joined:
    13th Sep, 2008
    Posts:
    8
    Location:
    Moe
    Thanks for the reply

    What then do you suggest?

    Mangaged funds though the nab? (only because I bank with them). I have quite a bit of equity, so a secured personnel loan dosen't appear to be a problem.

    Would an unsecured personnel loan to buy into managed funds attract any taxation benefits? (I am trying to diversify away from property).
     
  4. AsxBroker

    AsxBroker Well-Known Member

    Joined:
    8th Sep, 2007
    Posts:
    1,448
    Location:
    Sydney, NSW
    Hi Angella,

    NAB own MLC so they would at least suggest that you use that platform (the good people at Chant West rate them 5 out of 5 apples) Chant West .

    The taxation benefits from an unsecured loan would probably be the same as a secured loan, the only difference being the interest rate which you are paying. Naturally, you'll speak to your accountant to find out your full tax position.

    The nice people at NAB will probably also suggest looking at NAB margin lending as this would generally be cheaper than an unsecured loan.

    Cheers,

    Dan

    PS This is general information and not a recommendation to buy, sell or hold any investments. Before making an investment decision speak to your FPA registered Financial Planner.