Nothing written below is financial advice. The below questions and answers are for general information only and should not be taken as constituting professional advice. You should always do your own research when making any financial decisions.
First of all, love your work and Ask Firebug Fridays episodes. So thank you.
I understand your stance on Super as you cannot access any of it until you’re in your 60s, however as potential a first home buyer, I cannot help to consider First home super saver scheme where you can access up to 30k of the pre-tax (salary sacrificed) voluntary contributions you’ve made.
To me, it sounds like a no brainier but please let me know if this sounds like a good deal from the Government from your end or if I am missing anything that may cause me to reconsider.
What is going on with the market atm? LICS and ETFs are way down, are you going to wait for them to drop more or buy now?
Would love to get your thoughts on debt recycling. Feels like a faster way to get to FI by leveraging equity in a property, but I haven’t heard you talk about it. Would love your thoughts.
Keep up the good work my man. Loving it.
- $200K PPOR Loan
- $100K lump sum cash from selling an investment property.
If investor A is not interested in paying off any of the loan from the PPOR ($200K) and instead wants to invest that money into ETFs/LICs, DR can be used to reduce tax with no extra risk,
Investor A can use the $100K to pay off part of the PPOR loan. Open a line of credit (LOC) of $100K and use that LOC to invest in the ETFs/LICs.
Investor A has the same amount of debt of $200K and still has $100K invested. The difference being is that they have saved $1,480 in tax (assuming 4% interest rate of LOC and 37% tax rate) because now half of their loans are tax deductible.