Money management

Investment expenditure

With your investment choices, for simplicity and effectiveness, you should aim to do the following:

  1. Fund your deductible expenses from redraw on an investment facility so that your after-tax savings are kept in your ‘Grow’ offset.

This has the two-pronged benefit of reducing interest on your home loan faster whilst optimising your deductible interest. This is the most beneficial for you financially, however, it will take a little more consideration and organising. Talk to your Strategic Mortgage Broker or Property Planner about how you can best set this up.

  1.     Arrange for your Property Manager, as a service, to pay all of your expenses before forwarding your net rent payment each month into your ‘Grow’ account.

It’s likely you’ll still have to pay for some investment expenses yourself and therefore need a hybrid offering one of the options.

  1. Set up an ’Investment Offset’ bucket.

Either have a budget for this account and place your funds into an upfront account for each month or year from your ‘Grow’ account as you do with your ‘Life’ and ‘Fun’ accounts. Or alternatively, transfer your investment costs from your ‘Grow’ account into your ’Investment’ bucket as they occur.

All investment income could still go into your ’Grow’ account to optimise reduced interest payable on your home loan and/or repayments into your home loan.

4.     Pay for all investment expenses from your ‘Grow’ account.

 

Step 1 – Move all expenses from your bank accounts into a spreadsheet

Step 2 – Move all your expenses into categories.

Step 3 – Define your buckets and the categories within each!

Step 4 – ‘Document’ where you will cut back spending

Contact us today to book in a free confidential property planning, strategic mortgage broking, money management or property select meeting.

The Seven Steps to Money Management Success is intended to be an information resource only and contains information of a general nature. It is not intended and does not constitute or act as a credit quote, credit proposal disclosure document or preliminary credit assessment. Further, it does not constitute or contain legal, taxation, financial product or financial planning advice. You should seek independent advice regarding these matters relevant to your own circumstances and individual needs from an appropriately licensed party. All information is provided by PPA with due care to its accuracy, however, no representation or warranty is made as to its accuracy, currency, completeness or reliability. It is your responsibility to assess and verify the accuracy, currency, completeness and reliability of the information and whether it applies in your individual circumstances.

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