Join our investing community

Plan for the folks...

Discussion in 'Investing Strategies' started by kelvinh, 26th Apr, 2008.

  1. kelvinh

    kelvinh New Member

    Joined:
    10th Sep, 2006
    Posts:
    3
    Location:
    Perth, WA
    Currently Dad has about 7 yrs of his super to go...
    PPOR worth approx 1.2m.. and IP worth 360k both owned outright.(if sold both would be CGT free)
    Some OS shares paying dividened of 10k peryr..
    Without being too morbid, id say theyll be around for another 30yrs.
    Id say they could easily live on 50k per yr.. but would be happyeir on 75k per yr.
    His current plan is to sell the IP once his current super runs out.. hopefully by that time the IP would be worth closer to 500k +..

    The folks are conservative low risk types.. but thought I see if others on the forum have ideas or strategies that they should evaluate.
     
  2. Billv

    Billv Getting there

    Joined:
    15th Jul, 2007
    Posts:
    1,796
    Location:
    Sydney, NSW
    Kelvin,

    Mate your folks have many options .....:)

    If it was me I would leverage against the IP & PPOR and get a few more IP's
    With so many assets they can get a reverse type mortgage and live from that
    income alone or they could put the income into super and instead pull money to live on from their super fund.

    At some stage they may decide to downsize their PPOR so
    they could move into 1 of the IP's and either sell or rent out the 1.2mil PPOR.

    If they sold the PPOR they could pay down some of the IP loans to make them cash flow +ve and/or put those funds into more IP's + some of it into super.
    Again, for money to live on, I'd pull out money from my super(assuming they are now over 60yo that money is tax free) and all rents would go into the super (also Tax free).

    There are many options and there are other members here would would do things differently and could also invest in shares & MF's.
    For me, property is a better vehicle as it gives me greater leverage
    and without the risk of a margin call.
    Additionaly, I can diversify through super and invest in shares
    and ofcourse super income at that age is tax free.

    Also, if your folks have a lot of super they could start up their own SMSF that way they will have better control of their assets, they would enjoy the tax free benefits of super and if they wanted they could also borrow through their SMSF to buy more property.

    Once they get a few ideas they need to sit down with an investment advisor and decide on the strategy they would like to follow.
    Just be careful not to put all their eggs into 1 basket.
    Also you should know that some advisors could have an interest in promoting particular products.

    Cheers
     
  3. kelvinh

    kelvinh New Member

    Joined:
    10th Sep, 2006
    Posts:
    3
    Location:
    Perth, WA
    Thanks BV.. Looks like Folks just need to decide which direction to head.