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Where to begin ?? Many questions

Discussion in 'General Investing Discussion' started by sergio bennett, 1st Sep, 2008.

  1. sergio bennett

    sergio bennett New Member

    Joined:
    31st Aug, 2008
    Posts:
    2
    Location:
    QLD
    Hi everyone !! Just joined !! Thanks for all the posts they are great !!

    Any feedback would be great .
    Here is my situation .

    1 home I live in with $ 195K equity mortgage for 165K
    1 rental $165 equity mortgage at 155K .

    Currently not working, living off savings and spending lots of time with my kids.

    Thinking of selling rental and cashing in and reducing current mortgage to about 40K ( taking into account 20K for CGT etc ) saving me about 200K over the next 20years . But it means reducing asset base

    I have no company structure or trusts set up so if setting this up would help I would consider .

    So I gues I'm asking if anyone has any ideas on how to access the equity in the rental , and paying off more of the house i live in and putting money in the bank for manged funds investment .

    Any ideas would be great
     
  2. bella

    bella Well-Known Member

    Joined:
    6th Jun, 2007
    Posts:
    48
    Location:
    QLD
    some rough ideas/considerations

    Firstly - tax:
    As a general rule of thumb, if you have both deductable and non-deductable debt, you want to reduce the non-deductable debt. Research 'debt recycling' if you have not already. A debt recycling strategy might be just what you need. Although keep your taxable income amount into consideration (i am assuming it is low if you are currently living off savings, which means debt recylcing may be less effective than if you were on a high tax bracket)

    Second - cash flow:
    You are living off savings. Do you intend to do this for a while, or do you want to go back to work? If you do intend on keeping on living off savings, whatever investment you want to get into it might be a good idea to find something with good cashflow - eg high yield stocks or positively geared rental. Something that is not going to cost you a lot of money week-to-week.

    Third - appropriate investments:
    I think the best time to sell an investment is when it no longer meets your needs. You need to set financial goals for yourself. Then see if the existing investments will meet those goals. If they don't, work out what will, then consider the costs of switching to new investments and whether or not it is worth switching over the timeframe you are looking at. Selling property is expensive - you don't want to do it without careful consideration.

    hope this helps.
     
  3. sergio bennett

    sergio bennett New Member

    Joined:
    31st Aug, 2008
    Posts:
    2
    Location:
    QLD
    Bella thanks for your thoughts .

    I'll look into that rubbish recycling .
    And you are right cash flow is tight now .I will go back to work in bu the end of the year .Currently looking . As for stocks that was one of the reasons for cashing in the rental (which is positive by $10.00PW) I thinketh it might be good to get into stocks .
    And my thoughts exactly re appropriate investments . I'm currety looking at any options .

    Thanks again