Join our investing community

Tax Return

Discussion in 'Money Management' started by jeffery85, 10th Sep, 2012.

  1. jeffery85

    jeffery85 Active Member

    Joined:
    20th Jul, 2012
    Posts:
    29
    Location:
    canberra
    Hi Everyone,

    I am very confused and have a few ideas and have read some articles that tell me too do different things with my tax return:

    Pay off the credit card: a credit card with 12% interest that i have fully maxed out. (this would in-pact on my cash-flow positively approx 250 per month in payments) but i am concerned i may use it as a clutch in the future.

    Buy shares: Buy some blue chip shares set them too dividend re-invest and let them compound. (the share market is undervalued and will go back up long term). (probably buy the banks they are not going anywhere). I feel this may also reinforce my investment mindset.

    Renovate: Replace the flooring in an investment property and put the rent up $10pw, (no guarantee).

    What would you do????

    Thanks Heaps

    Jeffery
     
  2. Simon Hampel

    Simon Hampel Co-founder Staff Member

    Joined:
    9th Jun, 2005
    Posts:
    4,619
    Location:
    Sydney, Australia
    Pay off the credit card. No other action will provide the returns that this will offer.

    12% return after tax guaranteed? Yes, thank you!

    If you are concerned about your credit card debt blowing out again in the future - ditch the credit card. Get a debit card instead. That way you're only ever spending money you already have. If you can't afford not to have a credit card - try spending less.

    Don't bother investing anywhere else until you have your personal debt under control. This is non-productive debt (also known as "bad debt"), and will suck the life out of your finances and prevent you from getting ahead.
     
  3. fathappycows

    fathappycows Member

    Joined:
    11th Oct, 2012
    Posts:
    6
    Location:
    Eidsvold
    Well said, Sim.
    Can't argue with that.
     
  4. Waimate01

    Waimate01 Well-Known Member

    Joined:
    26th May, 2008
    Posts:
    157
    Location:
    Sydney
    +1

    (Or, because "+1" is less than 10 characters, "Plus One")
     
  5. jeffery85

    jeffery85 Active Member

    Joined:
    20th Jul, 2012
    Posts:
    29
    Location:
    canberra
    thanks heaps

    Thanks for this, this is what i have done and now using it more productively with the offset account with the interest free periods hopping it turns out too be a good strategy.