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Sink your teeth into THIS dilemma..

Discussion in 'Money Management' started by Crusher, 5th Jul, 2009.

  1. Crusher

    Crusher Well-Known Member

    11th Jul, 2008
    Newcastle, NSW
    Hey all,

    I have found myself in a rather nail biting situation :)eek:) and would like some advice on where to go from here, so please - help! :)

    So, firstly - I have debt. Who doesn't, this is what im up against.

    $40,000 Personal loan (family loan) to begin paying starting this month (i borrowed the money to withdraw out of the Macquarie bank fusion funds (grrr)

    $15,000 credit card debt

    I am a coal miner earning around $1400 a week - net. Pay rent of $330, have a comfortable living style with my girlfriend and life is good.

    I have $150,000 tied up with the Macquarie GP100 (i bet your wondering who my financial advisor gets HIS salary off since im going downhill WITH Mac bank)..

    SO - Moving on. I have paid for this financial years interest on the GP100, which is currently worth around $138k or so. And i have the family debt of $40k, which i am paying back $200 a week. The credit card debt i am strongly looking at getting a Personal loan to cover for now since its well overdue, and with my tax return ($10k+ all being well) i will put aside for June 2010 to either pull out of the GP100 or stay in it if things are going well.

    Any advice on my situation, comments.. or just feel like having a laugh at my situation, please - feel free to post lol.

    Thanks in advance.
  2. joanmc

    joanmc Well-Known Member

    10th May, 2009
    Firstly, I am not a financial advisor! But I think a bit of common sense would go a long way here. I am assuming that you borrowed the 150k for your investment and you are prepaying the interest to save yourself a smidgen of a percent?

    If I have that correct then it makes more sense to pay out your NON tax deductable credit card debt with your tax return than save it for 12 months to save a tiny bit of DEDUCTABLE interest. I would always pay out my bad debts first over good debts. ("bad" are non tax deductable and "good" are tax deductable). Aslo maybe look at cutting back a little on your "good " lifestyle to finish off paying that credit card.

    I am also assuming that if you are on a site like this that you want to get ahead financially? Then educate yourself as best you can about investing so that you are not completely at the mercy of a financial advisor and can make an educated decision about his/her recommendations.

    My favorite saying at the moment is: Debt is a tool like a chainsaw; used properly it can make like a lot easier, used incorrectly someone can lose an arm and a leg!
  3. robmillion

    robmillion Member

    13th Jun, 2009
    Melbourne, Vic
    I agree with paying off bad debt first and cutting back on the comfortable lifestyle.

    In my opinion, everyone should develop financial literacy by educating themselves. Read Robert Kiyosaki and the like...
  4. Billv

    Billv Getting there

    15th Jul, 2007
    Sydney, NSW
  5. Rob G.

    Rob G. Well-Known Member

    6th Jun, 2007
    Melbourne, VIC
    All the above about credit cards first.

    Then consider changing and diversifying investments - and advisors.

    LIFESTYLE ... changing habits is hard when money comes in and goes out so easily.

    Your girlfriend might not like your new austerity plan. I hope she is not an advisor on how to spend your wealth !


  6. HandyAndy888

    HandyAndy888 Member

    4th Jan, 2008
    Miles, QLD
    Step 1: Educate yourself about money management.
    Step 2: Work out your disposable income (money that gets flushed down the toilet on beers, cars, porn, etc. etc. per week)
    Step 3: Work out a budget for disposable income. Find out how much you "need" for entertainment and how much you can use to pay down your debt.
    Step 4: Pay down credit card. Reduce limit to $5000 and leave it there.
    Step 5: Pay down personal loan.
    Step 6: Tackle your shares accordingly.

    This is what I would do....yes, you will have to sacrifice SOME of your lifestyle, but that's reality.