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Investment Planning SN3002 Question 5

Discussion in 'Financial Planning' started by Kylie Stephens, 16th Oct, 2011.

  1. Kylie Stephens

    Kylie Stephens Member

    Joined:
    5th Oct, 2011
    Posts:
    5
    Location:
    Devonport
    Did anyone work out that Isabella only had about $6700 surplus income per year? I worked out that she had not listed mortgage repayments for main house in her list of expenses. She had household expenses at $26000 per year but once you take into account rates, electricity, groceries etc that wouldn't leave much for mortgage payments. Also she bought her house 13 years ago for $180,00 and now only owes $26000 so she must have been making pretty big repayments.
    Just want to know if anyone got anything like this?
    KylieS
     
  2. Hasey

    Hasey New Member

    Joined:
    23rd Jul, 2011
    Posts:
    1
    Location:
    Geelong, VIC
    I was thinking the same thing - why isn't the home loan included in expenses. I used assumptions of 7.20% on the $26,000 with 12 years left, and used that in excel to arrive at a yearly repayment of about $3,300. However, I included in my recommendations to pay out this non-deductible debt anyway - saving interest over the longer term and freeing up $3,300 (assumed) cash flow now.