Hi Every One,
Cash flow has improved for my wife and I. In the last couple of month's and we are working on ways to improve this.
By February my wife and i will have another source income comming in.
With this extra income we want to invest and turn "investments into real bussiness".When i first started investing i used to rush from all of the excitment. I know want to foscus and become wealthy.
I have done allright so far but being just comfortable in life is not enough for me. At 27 there is no better time to start.So i have a couple of questions:
1) Setting up a form of structure: If i am looking at alot of investments do you know this up as some sort of Trust or just under your name? My accountant has suggested that either will work and both have Pros and Cons.2) Funding for both Shares and property/Land: To start off again do i use the equity in my home or save and use my own funds.
Since its my home i should maybe save so i can leave my PPOR in good shape i currently own $100,000 its worth about $410,000.3) I have some bussiness goals that i am focusing on next year if any one wants to have a glance at these please let me know i think it always great to share ideas with people who think alike.
Cheers
Johann PsailaJpcashflow | JP Financial Group
http://www.jpfinancialgroup.com.au
Email Me | Phone MeYour first port of call in finance :)
Hi Johann
Good to hear things are on the improve.
Looking at your numbers i am assuming with a property valuation of circa $410,000 and $100,000 in equity you have an existing loan of around $310,000. Unfortunately there is a big difference between actual equity and useable equity.
Think you will find it hard to find any lender go past 90% lvr so if we assume $410,000 x 90% = $369,000 – existing loan of $310,000 that is going to give you around $59,000 to work with.
Rather than use any of your personal savings i would be looking to pay down the principal on the home loan and then increase the equity loan or LIne of Credit by an equivalent amount so you can maximise your deductible interest.
Not sure whether the new income in Feb is going to be used to support the existing borrowing but will depend on what it is as to whether lenders will accept it.
Might be an idea to get the structure in place now in readiness for what you intend to do early 2012.
Cheers
Yours in Finance
Richard Taylor | Australia's leading private lender
If starting a business asset protection should also be a major concern.
Terryw | Structuring Lawyers Pty Ltd / Loan Structuring Pty Ltd
http://www.Structuring.com.au
Email MeLawyer, Mortgage Broker and Tax Advisor (Sydney based but advising Aust wide) http://www.Structuring.com.au
Hi Terry and Richard,
"Looking at your numbers i am assuming with a property valuation of circa $410,000 and $100,000 in equity you have an existing loan of around $310,000. Unfortunately there is a big difference between actual equity and usable equity."
My home loan Is $100,000 and the valuation is at $410,000.
The new source of income is coming from my wife going back to full time work as a drafter.
So by February we are going to have three sources of income:
1) My Full time work – Earn 75K a year
2) My wife income – Earning about 60K a year
3) Our business will also provide an income – We have almost set this up so that my business can pay for my home loan and genera living expenses.So we are going to be in a pretty good position considering we dont have much debt
Jpcashflow | JP Financial Group
http://www.jpfinancialgroup.com.au
Email Me | Phone MeYour first port of call in finance :)
hi Johann
Usable equity would be [$410,000 x 80% (or 90% maybe) ]- existing loan.
You should be able to pay out that $100,000 in less than 2 years.
For the business have one person operating it only, to reduce risk, and further reduce risk by using a Pty Ltd company. The company can employ the other if need be, or have the shares owned by a DT so as to add tax flexibility.
Not sure how you are doing that with the business – paying for the home and hope you have sought advice. if the business is leasing part of the house then the CGT will be lost.
Terryw | Structuring Lawyers Pty Ltd / Loan Structuring Pty Ltd
http://www.Structuring.com.au
Email MeLawyer, Mortgage Broker and Tax Advisor (Sydney based but advising Aust wide) http://www.Structuring.com.au
Hi Terry,
The business will have one person operating it and its under a PTY LTD structure.
100k in two years – Do you think it may be more sensable to pay of the home rather then invest?
Cheers
Jpcashflow | JP Financial Group
http://www.jpfinancialgroup.com.au
Email Me | Phone MeYour first port of call in finance :)
Do both.
Def any cash received should be paid off the home loan rather than straight into an investment – or into an offset and then borrow to invest, if you have enough equity.
Terryw | Structuring Lawyers Pty Ltd / Loan Structuring Pty Ltd
http://www.Structuring.com.au
Email MeLawyer, Mortgage Broker and Tax Advisor (Sydney based but advising Aust wide) http://www.Structuring.com.au
Thanks for that Terry
Finally all the hard yards are starting to pay off.
Future looks bright
Jpcashflow | JP Financial Group
http://www.jpfinancialgroup.com.au
Email Me | Phone MeYour first port of call in finance :)
Agree with Terry i cant see why you cant do both.
You threw me when you said "I own $100K" as i assumed that the Bank owned the rest.
Set your loans up correctly and the equity should give you a good launching pad going forward.
Cheers
Yours in Finance
Richard Taylor | Australia's leading private lender
Thanks guys.
Speak soon its all good from here then.
Jpcashflow | JP Financial Group
http://www.jpfinancialgroup.com.au
Email Me | Phone MeYour first port of call in finance :)
Just make sure you focus and don't get sidetracked from your plan.
Terryw | Structuring Lawyers Pty Ltd / Loan Structuring Pty Ltd
http://www.Structuring.com.au
Email MeLawyer, Mortgage Broker and Tax Advisor (Sydney based but advising Aust wide) http://www.Structuring.com.au
Hi Terry,
That usualy happens to me any tips to remain focused?
Jpcashflow | JP Financial Group
http://www.jpfinancialgroup.com.au
Email Me | Phone MeYour first port of call in finance :)
Just develop a plan and stick to it. When your mate comes over and tells you how he could make $1mil by investing in x – beware.
Terryw | Structuring Lawyers Pty Ltd / Loan Structuring Pty Ltd
http://www.Structuring.com.au
Email MeLawyer, Mortgage Broker and Tax Advisor (Sydney based but advising Aust wide) http://www.Structuring.com.au
And dont take advice from friends down the pub who tell you "I think the ATO are investigating Trusts" or "My friend at the Bank recons managed funds is the way to go and he has a mate who can get you into the fund".
These friends spend 40 years telling you all the reasons why you shouldnt take action and then on retirement want to come and stay at your place and enjoy the riches of your investing.
Cheers
Yours in Finance
Richard Taylor | Australia's leading private lender
Qlds007 wrote:And dont take advice from friends down the pub who tell you "I think the ATO are investigating Trusts" or "My friend at the Bank recons managed funds is the way to go and he has a mate who can get you into the fund".These friends spend 40 years telling you all the reasons why you shouldnt take action and then on retirement want to come and stay at your place and enjoy the riches of your investing.
Cheers
Yours in Finance
Well put Richard.
And then these friends will also talk about you behind your back saying how 'lucky' you were because you invested in xxx
Terryw | Structuring Lawyers Pty Ltd / Loan Structuring Pty Ltd
http://www.Structuring.com.au
Email MeLawyer, Mortgage Broker and Tax Advisor (Sydney based but advising Aust wide) http://www.Structuring.com.au
Thats so true!!
But like you both said just focus and i will have no problem.
Richard your the guru with lending if you have some time can i shoot you a email of some goals i want to try and reach within the next couple of years and see if you can help me structure loans etc?
cheers
Jpcashflow | JP Financial Group
http://www.jpfinancialgroup.com.au
Email Me | Phone MeYour first port of call in finance :)
Terryw wrote:And then these friends will also talk about you behind your back saying how 'lucky' you were because you invested in xxxAs Terry says often there is very little luck involved – it is all about education, planning, commitment and having the courage to make a decision.
So many times I hear you were lucky because you bought at the right time – bulldust – the trust is someone had the courage to make a decison based on sound fundamentals. Luck has very little to do with it.
Hi Derek,
I agree with you too.
I have so many young friends and all they say is this: Life is hard, oh its so expensive we never have any money to invest.
They they say next week they bought a new car on a lease, new furniture etc.Every one in this planet has the same chance of being sucessfull but the truth is alot of people would rather admit defeat then fight.
Jpcashflow | JP Financial Group
http://www.jpfinancialgroup.com.au
Email Me | Phone MeYour first port of call in finance :)
Deleted as i seem to have repeated myself over and over again lol
Richard Taylor | Australia's leading private lender
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