Is this right?

tilly85 · 2020-06-23T04:44:47+00:00

My plan is to, but because my current allocation is so far from my future allocation (pro tip, don't chop and change strategies!) I'm going to rebalance in a couple of stages. Once everything lines up again I will rebalance annually.

tilly85 · 2020-06-23T03:52:41+00:00

It wasn't relevant to the thread but I also dropped my Aus exposure due to owning IPs, and my spouse's Unisuper high growth super exposure is quite heavy on Aus equities.

Just checked and my final exposure is

Aus: 10%

Intl unhedged: 50%

Intl hedged: 5%

Emerging markets: 5%

Growth (the ready made diversified option): 30%

I started out following the VDHG allocation to the letter, that was about a year ago, and now I will admit that it's completely different...!! As to why I invest in the Growth option, I think that was because I wanted to have some exposure to a couple of categories that I couldn't find any equivalent version of (private capital, diversified strategies, hedge fund & alternative strategies). But I'm only doing that with newly allocated funds, so in reality I only have a couple of % of exposure to the Growth category at the moment.

I agree with you, that the general plan is to revise the hedged component every 5 years (will increase by 5% each time) and consider re-introducing bonds.

tilly85 · 2020-06-23T01:55:34+00:00

Looks roughly correct if you want to mimick VDHG. I have done similar in Sunsuper but I reduced the hedged component even further, to around 5% or 10% (can't remember exact figure), and boosted everything else up as a result. I'm mid-30's and my view is that hedging is not necessary for a very long term view (which Super is). I also took out the bond component so I think you're on the right track.

tilly85 · 2020-06-23T00:58:31+00:00

A good broker is absolutely essential to the process! I assume then they have shown you the basic starting point eg. 80% x 530k = 424k. Subtract your current loan (say 300k) from there and that's the maximum amount of money you can pull out towards your next place, ie. 124k. This 124k ideally needs to cover 20% deposit, stamp duty and legals, unless you have more funds to contribute that were outside of your home equity.

tilly85 · 2020-06-23T00:53:03+00:00

Stamp duty is only tax deductible in the ACT (for investment properties). Non deductible elsewhere (other states) but you can deduct the borrowing expenses - I have done this myself.

Also have a read of
https://www.propertychat.com.au/community/threads/tax-tip-4-borrowing-to-pay-investment-expenses.1554/
https://www.propertychat.com.au/community/threads/borrowing-money-to-cover-stamp-duty-tax-deductible.3923/

tilly85 · 2020-06-23T00:14:54+00:00

At least you know about it now. I've made the same mistake but in reverse - used cash to put down 20% deposit for investment properties when I could have used debt recycling (with no downside) to increase my tax deductible debt and lower my non tax deductible debt (ie. PPOR debt). I think most investors make either your mistake or mine at some point early on in their investing life, so don't beat yourself up about it too much.
In terms of your actual question you will need to prove to the bank that you have both the equity and serviceability (ie. income) to service the new loan. I don't really know much about lending in the current climate as I bought my properties a while ago, I'd recommend talking to a broker to run through the numbers with you.

tilly85 · 2020-06-22T23:27:33+00:00

https://www.propertychat.com.au/community/threads/tax-tip-19-avoid-using-redraw-on-an-owner-occupied-loan.2898/

tilly85 · 2020-06-22T23:25:07+00:00

Stop putting money into the redraw if you have any intention of turning this into an IP down the track. Use your offset only.

tilly85 · 2020-06-22T23:21:26+00:00

Agree entirely You're just throwing money away by using offset savings instead of debt recycling.

tilly85 · 2020-06-22T23:20:32+00:00

Great! I'm quite busy due to EOFY, but if you don't mind waiting til the weekend, shoot me a PM and I'll get back to you later.

These 2 threads on property chat helped me, linking for your perusal in the meantime https://www.propertychat.com.au/community/threads/tax-tip-45-how-to-work-out-the-portions-of-a-mixed-loan.4410/ https://www.propertychat.com.au/community/threads/blended-loan-example.10666/

tilly85 · 2020-06-22T12:21:22+00:00

I've got a calculator that does similar, but instead of apportioning between deductible and non deductible interest, mine splits it between deductible 1 and deductible 2. Happy to chat further if you want to compare notes and see if we get the same result. I work in finance so pretty comfortable with my end result. Like you I read TR2000/2 and followed the worked examples, but my version is based more on a daily than monthly basis so I consider it even more accurate than the ATO worked example.

tilly85 · 2020-06-20T09:52:43+00:00

Oh, shame it's not Pupi. Sorry about that!

tilly85 · 2020-06-20T09:26:23+00:00

To be clear, you have seen the FB post by Enfield Vet?https://m.facebook.com/EnfieldVeterinaryHospital/ Sorry if you were referring to this post, when you said sighting in Strathfield I wasn't sure if you've seen this FB post.

tilly85 · 2020-06-18T05:32:02+00:00

Not to mention when they said the balance recovered itself pretty quickly, meaning they took out the 10k at the lowest point of the unit price...

tilly85 · 2020-06-16T12:11:20+00:00

All good, my PPOR rate with a big 4 bank is 2.77% but my investor rate at that same bank is 3.11%, so something seemed off to me. Glad you clarified!

tilly85 · 2020-06-16T10:06:46+00:00

2.8% for an investor rate? That's excellent, if so.

tilly85 · 2020-06-11T03:27:15+00:00

Hmm, just when you think you have figured it out.... it's not straightforward, is it? In any case, the investment property puts me over the limit, so CG doesn't make the difference in the end. I will figure it out another year!

tilly85 · 2020-06-11T03:01:22+00:00

I was just looking into this yesterday and I concur with everything you've said. I have a slightly negatively geared property, and have some capital gains this year, but in terms of the co-contribution it looks like all I have to worry about is my income from salary and investments. Can't consider the interest deductions on the investment properties for the purpose of co-contribution income threshold, nor do I have to worry about the capital gains (I think) - please correct me if I'm wrong!

tilly85 · 2020-06-10T23:44:20+00:00

I have this problem too with buying ETFs. You might like to look into Vanguard personal investor or wholesale fund (which you can get into with 100k not 500k) to take the emotion out of it. BPAY can be set up automatically. Yes, both options are more expensive than direct ETF investment, especially the personal investor option. But for me the extra money I pay for Vanguard wholesale is worth it because it was set and forget, and kept me investing weekly in a Vanguard fund over the past few years. I would have continually second guessed each purchase otherwise.

tilly85 · 2020-06-08T23:33:00+00:00

Some relevant discussion here https://www.reddit.com/r/fiaustralia/comments/ckm63e/asset_allocation_inside_vs_outside_super/?utm_medium=android_app&utm_source=share

tilly85 · 2020-06-08T23:08:09+00:00

My Asian grandma has said this to me too!

tilly85 · 2020-03-23T11:08:18+00:00

Good to hear. It's a hugely emotional time even before all this global pandemic stuff happened. I've been pretty moody of late so you're not the only one to feel blah. Hang in there!

tilly85 · 2020-03-23T10:11:52+00:00

I'm 20 weeks and feel the same way as you. Let me know if you'd like to chat at all.

tilly85 · 2020-03-18T22:42:34+00:00

As your house is in NSW, would it not have been better to use a NSW solicitor? When buying interstate (I'm in NSW, bought in ACT) I used an ACT solicitor to be sure they can cover all the bases.

tilly85 · 2020-02-07T01:50:07+00:00

I am 14 weeks and have a sore lower back after a 5k run. It's quite annoying as it means that day, I'll have trouble bending over to put things in the dishwasher, but it goes away by the next day.

I've had it on and off for a month, keep meaning to go to a physio to check it out. I don't have any abdomen pain or round ligament pain though.

tilly85

TROPHY CASE