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