Debt Recycling Explained

Debt Recycling
What exactly is debt recycling?
Rob & Amy explain this borrowing-to-invest strategy, the pros and cons, and how it may be utilised by highly engaged investors to grow their wealth . . .
----------------------------------------------------------------
More Freebies you should check out*
Ebooks, Online Courses, Video Blogs, Podcasts | Free resources covering a range of financial fundamentals to build your knowledge*
www.consortium...
*Follow us on our social media *
Website: www.consortium...
Instagram: / consortiumprivatewealth
Facebook Page: / consortiumpw
To contact us directly please email [e-mail] or call 03 5382 3460. We're here to help!
Advice Disclaimer || Any advice given by the presenter/s has been prepared without considering your individual objectives, financial situation or needs. So, before you act on the advice you should think about whether the advice suits your objectives, financial situation or needs. If the advice relates to acquiring a financial product you should obtain a copy of the Product Disclosure Statement for that product and consider it before making a decision. This presentation has been prepared by Consortium Private Wealth Pty Ltd (ABN 74 616 250 965) (AFSL 495401). If you require advice which takes into account your objectives, financial situation and needs you should speak to a financial adviser.
Robert Goudie (ASIC Reg 235974), Ashley Rowan (ASIC Reg 433899), Olivia Glare (ASIC Reg 1262290), Rachael Todman (ASIC Reg 1270413) & Amy Lehmann (ASIC Reg 1292710) are Authorised Representatives of Consortium Private Wealth Pty Ltd ABN 74 616 250 965 AFS Licence 495401.

[@NoRegertsHere]

This was really informative for consideration of risk on investing when it comes to using debt. Personally, I’m not a fan of margin lending either, the benefits didn’t account for even the cost, let alone the risk. Debt recycling I’m a fan of, not to maximum borrowing capacity that a bank will permit. Up to a level I feel comfortable servicing out of my wage. To that end, is there a recommended percentage of wage that shouldn’t be exceeded when pricing a mortgage? Dave Ramsey recommends 25% of net wages on a 15 year mortgage. The Money Guy (financial planners in the US) recommend 25-30% maximum over a 30 year mortgage. The figure includes mortgage repayments, rates, insurances. Thanks for balanced content.

[@ConsortiumPW]

Hey there Ben, thanks for the great comment! I think Dave Ramsey and the Money Guy are good general benchmarks. There is a massive difference based on the terms of the loans, personally I would prefer Dave’s suggestion. Interestingly, Australians now have the option to opt for 35-year term home loans, which can potentially lower the monthly repayment and keep people in debt for longer, which suits the banks. But the key takeaway should be: don't stretch yourself too thin. Leave room for interest rates increases. Make sure to include all housing-related costs like rates and insurances, not just the mortgage repayments, when you're calculating that percentage of your income. Just a general advice/side thought, having Income Protection is vital with home repayment commitments. Thanks Again, Rob

[@NoRegertsHere]

@@ConsortiumPW great response. Cheers

[@tangles01]

Literally looking at debit recycling in the last 24 hours after passing a personal finance threshold. And bam this turns up.

[@ConsortiumPW]

Hey Tangles, I hope it was helpful. Regards Rob