Managed Funds savings gearing plan

I was looking at starting a savings gearing plan, possibly through suncorp.

How do I fill out the form ( http://marginlending.suncorp.com.au/resources/ml_brands/downloads/sun_ml_app_form_0606.pdf ) if I've already got money in the two funds? Or do I need to cash out of the funds and start afresh?

 

nevermind... Managed Fund Standard Transfer Form looks like the form I need.

 

What's a savings gearing plan? Do you mean regularly investing in managed funds - then increasing the margin loan to match?

EDIT: Just found this page Suncorp - Instalment Gearing

 

That's the one. I wonder if I should cancel the savings plan I have direct with CFS before applying through Suncorp?

 

I really like the look of the product Leveraged Equities has - Wealth Builder I think it is called.

If I was starting out today this is what I would use I think.

Never looked at any others - how does it compare with the one you are considering?

 

From Sim's site, only Suncorp and St George supported both funds I have
Navra (75% margin) and CFS geared (65% margin) (I was going to be conservative and try to keep a 50% margin). I'm about to head off to work, but I'll check LE out when I get there.

Cheers
Simon (there's lots of us isnt there)

 

Navra comes and goes off LE list. But once you own some they usually let you buy more. Or maybe that is just because I have been with them so long. They give me a decent discount too because of that.

I am always happy to give my loyalty to a company who give me theirs - is such a rare thing these days.

Cheers,

 

what are the pros of LE over Suncorp?

customer service? Interest rates?

 

Voigtstr

What are you trying to do?

Invest with geared instalments into two funds: ie Navra and CFS every month?

I think its a good idea, even though I stopped in June last year to have some more cash buffer for buying a property next year. My LVR was around 55% for geared instalments for Navra. Mind you each would have a minimum monthly instalment.

For example I only wanted to make total contributions of $100 my own money and $100 from the margin as at that time most of my laboured income went into managed funds (without gearing). But the mininum monthly instalment for ANZ was $200. Therefore, I had to fork out at least $200 a month from my own pockets. Not much of a difference, but at that time $450 & $200 a month was a BIG difference in my eyes, that is until I got used to seeing the figure.

 

yep hiflo, thats the plan, invest in both funds, building them up so that the distributions will cover the holding costs of property further down the track.

I sent Leveraged equities an email asking if they'll accept Navra as a security even if its not (currently) on their acceptable securities list. I should have asked them what LVR they would offer on it as well.

 

That should be good enough for me, I'll try to keep my margin at 50%. How come they dont list on it their current securities list? Can they turn around a few months down the track and say, sorry the lvr is now 0% on Navra?

 

This happened to me the last time I bought additional units. I had noticed Navra was off the list and when I approached them they agreed it was but said I could keep buying as much as I wanted.

I thought it was that I was special but Sim has just informed me above that it is because I am an existing client.

Don't worry too much about this. If it is restricted it will be because it is popular rather than because it is a poor investment. When it has been deleted from their list it always comes back after a while.

Cheers,

 

so I can still apply for the wealthbuilder scheme using navra retail and cfs geared using my existing units as security, and drip feed $160 a month until next year (when cashflow is better) and start putting in $2000 (half from me, half from the missus) a month. The returns from the funds after a year or so should be plenty to pay for holding costs on an ip.

 

Are you paying that 2000pm from wages?

This will effectively mean that next year when you buy ur new ppor youll have a large amount of shares which could be deductable but arnt, and a large non deductible debt.

Can you get a LOC on your current ppor so this is more effective?

 

I'll be using a loc on the current ppor for the purchase costs of the next ppor.

The distributions from the funds were intended to pay (a) margin interest (b) loc interest and (c) rental shortfall (for the current ppor which will become a rental when we get our next ppor).

This way loc on the current ppor would pay the 30k purchase costs on the new place, and the fund distributions would pay the holding costs of old place.

how did you want to make this more effective?

 

use the LOC to pay for the funds. this will lead to the overal highest deductible debt

Depending on how close ur numbers are (ie can you invest 40k into the market and pull out the 30 needed via a margin loan); you could drip feed ur LOC into the shares like you are now (if ur looking for dct). Then when new ppor comes around use a margin loan to pull out the deposit for the new property (if you plan to make it an ip eventually)

if you dont plan to make it an IP, juse the LOC & Margin loan like your doing now (however replace your salary money with the same money from the loc) and use the cash from wages (that you would of used for ur monthly share plan) and save that to use as ur ppor deposit. This way when you move in the LOC is deductable and your minimising bad debt on the ppor