Tax Effective Investment

1Investing for the future is fundamental to reaching the goals you’re setting out to achieve. Whether it’s paying off your home loan sooner, saving for your children’s education or dreams of a sunny vacation, it takes a plan to turn them into a reality. Investing can be much more than just a regular deposit into a bank account – by taking charge of your financial situation, you can magnify your savings and move towards your goals sooner!

Below are examples of different types of investing that we regularly use at Endorphin.

Debt Recycling

A debt recycling strategy can enable you to grow a tax effective investment portfolio and can assist in paying off your home loan faster. An interest only loan against the equity in your home is used to invest in a diverse portfolio of assets. The income generated from the portfolio (dividends and distributions) are directed to the home loan along with all surplus funds.

The strategy can assist you to:

+ Reach your financial goals sooner (eg clear your home loan)

+ Increase net wealth due to accelerated growth assets

+ Replace ‘non tax deductible’ debt with ‘tax deductible debt’

+ Provide diversity to your overall investments

+ Free up valuable cash flow for future years

3There are some considerations you will need to take into account before deciding if this strategy is in your best interests:

+ As the strategy involves gearing, capital gains and losses made on your investment are larger compared to traditional non-geared investment strategies

+ This suits investors with a minimum seven-year time frame or those who are willing to accept higher levels of investment value volatility in return for higher potential investment performance

+ The scenario is flexible and can be adjusted if your family’s circumstances were to change.

Gearing

tax-effective-investmentFor decades, many Australians have accelerated their wealth accumulation by borrowing money to invest (also known as ‘gearing’). It can also be used with a regular installment strategy to build a nest egg over time. This strategy does however have a higher level of risk due to the additional exposure to growth assets.

By using investment lending, no property security is required as the security is taken over the shares instead. Tax benefits, dollar cost averaging and a disciplined savings plan can really make this worthwhile.

We have negotiated preferential interest rates with leading investment loan providers in order to make a gearing strategy potentially even more rewarding. After all, who doesn’t like making money on the bank’s money?

The below scenario illustrates the potential benefits of this strategy for our client Matt – he had a 5 year goal to save for his children’s private school education. By utilising a gearing strategy, he was able to save an additional $57,000 over 5 years which assisted him to pay for all of the excursions, textbooks and tutoring his children needed.

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For an obligation free conversation about your financial future, please contact us.

What our Clients Say

  • Robert Rich is a gun and has been a pleasure to work with, he spent a lot of time asking questions and listening to both my husband and I to get a deep understanding of our current financial situation of who we are and where we want to be. His advice has been comprehensive and easy to understand. The genuine interest and enthusiasm he has demonstrated has made the whole experience to date, fun and engaging (it has also been awesome to see some great financial results!). Rob is a great communicator and is always available to chat, meet up or respond to an email. We wish we had seen Rob earlier, and plan to have him as our advisor now and into the future, I have and will continue to recommend him and his services.

    - Ellen Bond

  • Rob has been fantastic helping us set all our financials in order. We didn't want to have to worry about any of this stuff day to day. Rob put together a set and forget strategy that will see us in good shape for the future. Good guy, good advice, great help. Thanks again Rob

    - Andy Wright

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  • love working with Robert. He is highly skilled, practical and empathic. Nothing is a problem and he goes ‘above and beyond’. I have no hesitation in recommending Robert as an excellent financial advisor.

    - Rebecca Carter

  • Robert has managed our finances over the last 12 months as if they were his own. He has an eye for detail and is incredibly enthusiastic. We have recommended him to all our friends & family.

    - A. Miles

  • Rob has handled our finances for some time now. He provided us with sound advice and options. I highly recommend his services.

    - Mathew Quinton

  • Robert Rich provided me excellent financial advice and assistance in finding the right insurance for me. He was incredibly patient, and I'd recommend him without hesitation.

    - Edward Murrell

  • Rob has been helping me with my finances for just over 12 months now and i couldn't be happy, he is a wealth of knowledge and is amazing at what he does.

    - Paul Scott Ray White

  • Phillip and the team provide quality advice. They carefully explain the available options and clearly set the client's interests as the priority.

    - Jon Sutton

  • Rob has provided fantastic advise and clarity to myself and clients

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