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Trying to increase my wealth base....

Discussion in 'General Investing Discussion' started by Insan3, 15th Dec, 2007.

  1. Insan3

    Insan3 Active Member

    Joined:
    15th Dec, 2007
    Posts:
    33
    Location:
    Cairns, QLD
    Hi all, new to the forum but have read many posts and have found that most people here are very open minded and interested in all investments, not just property or shares, as I have found on other sites.

    I'm looking for a little guidance in where to take my investing.
    My fiance and I earn $40k each, are almost 24 and have some ideas we have been bouncing around (mainly me). Have played with shares a little, only made small amounts (5% on $5,000 investments)

    We recently sold our 1st PPOR for a 22% increase over 2 years, cleared Credit Card debts and have now bought vacant land. We also have 1 IP unit. Our financial situation is -
    Land - $130,000 Value, $90,000 Debt
    IP - $135,000 Value, $135,000 Debt, $180/wk Gross Rent.

    With surging house prices in Cairns (average 3bdr house is up to $350,000), I'm looking at extending our stay with living at home to further invest and set ourselves up.

    What I am considering is -
    Pay Off Land as much as possible (About $750wk is our Max).
    Use $10,000 Existing equity with $10,000 Margin Loan to purchase into Navrainvest fund and iShares S&P Global 100.
    Debt-recycle every 6 months, obtain another $10k equity and $10k margin, diversify and continue on for 2 years.

    My plan is to effectively convert the Land loan into a tax-deductible investment loan, with tax effective (free?) income from Navra to further accelerate paying off land and growth from iShares and my planned diversifying and direct share purchasing (I like WOW, SUN, CCL) and also look at Asian Managed Funds.

    After the 2 years, we'll have about $100,000 in Shares/Funds and only about $20,000 owing on Land. We can then build and have the portfolio take care of the IP Unit plus help us with Mortgage repayments.

    Any ideas or objections?
    Or am I missing the fact that the market could fall down in the next few years?

    Thanks all!!

    Regards, Matt
     
  2. crc_error

    crc_error The Rule of 72

    Joined:
    1st May, 2007
    Posts:
    1,367
    Location:
    Melbourne, VIC
    Land alone is usually not a good investment as it doesn't have any yeild or deprication. Best to develop it ASAP, collect rent and have great deprication.
     
  3. Insan3

    Insan3 Active Member

    Joined:
    15th Dec, 2007
    Posts:
    33
    Location:
    Cairns, QLD
    Sorry, should have mentioned that Land is for PPOR.....

    But we are also considering an new construction as Investment on other land to take advantage of depreciation.... or to cash in on large short-term capital gains :)
     
  4. crc_error

    crc_error The Rule of 72

    Joined:
    1st May, 2007
    Posts:
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    Location:
    Melbourne, VIC
    when you re-draw cash from the PPOR, make sure you keep the loan 'split' for tax purposes. You need to make it clear on the use of the money.
     
  5. Insan3

    Insan3 Active Member

    Joined:
    15th Dec, 2007
    Posts:
    33
    Location:
    Cairns, QLD
    Yep, on it - worked for a bank for 4 years so I am aware of the best way to structure banking facilities with regards to tax...

    Any advice or suggestions on the planned Managed Fund investments?