yep
understand now
I think we were having 2 completely different arguments LOL
So in conclusion you should always claim depreciation regardless or positive or negative gearing? Guess so.
The original argument was about yield vs cap gains, Jan Somers I think it was, was sayin that
cap gains was better because of the depreciation deduction. She argued that while you saved weekly $$$ with high yield, the compunding effect of the cap gains was better in the end. The trouble is that she ignored any investment return from that excess cashflow, which I reckon would closely match the capital gains result. Theres another mission for ya if ya get bored LOL. I did my own but I would like to see your maths.Yes Crashy, that was the post I was referring to. I’m sure she meant what I’ve said above, that income gets the taxman snapping at your heels each year. Regardless of how well you invest the positive cashflow each year, you still have to pay homage to the ATO at your marginal rate before you can. What we need of course is an investment that pays 7% income plus 7% capital gain each year.
Speaking of which, I’m just in the process of establishing a LOC, and I’m considering shares that pay at least 5% ff divs as you recommend. I’m looking at least a 5 year time frame, so that hopefully the dividends will leave the bank interest behind, with hopefully a reasonable cg as well. I’m looking a bank shares, and maybe TLS (after the buyback distortion). Mr MarketMad is forecasting “major bear market malaise for the banks” in the near future though, but I suppose if my time frame is long enough it shouldn’t matter too much.It’s a bit tricky applying for a LOC, as they don’t recognise any potential income from your proposed investments. How does everyone else handle that?
Sorry, I know it’s off the track but I may as well shove it here.
Regards, JimMarketmad lol
He sends me free sample reports. About 9 months ago I got one saying “short the crap out of SGB at $17.50”. Immediately it ran to $22.00. Now he sends me another one saying “short the crap out of SGB at $21.00” lol hilarious. short banks with a 7% yield, good one. Does he expect a 15% yield or something?
TLS is ok I spose. I like STO and WPL for yield also, though havent looked at them for a while. WES is high yielder also.
I would recommend kickin off with the ‘bonus dividends’ strategy so that you are always ahead on interest payments. Covered calls on top?
good luck
Thanks for that Crashy. Sorry I didn’t really mean to pump you like that, well maybe just a little bit lol. (especially for a view of MarketMad.)
I’ll certainly be starting with the Nov – Dec round of dividends.
Regards, Jim
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