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Debt Recycling Explained: Turn Your Mortgage Into a Tax Deduction (Step By Step)

  Рет қаралды 5,239

Invest With Queenie

Invest With Queenie

Күн бұрын

Пікірлер: 49
@scannon4492
@scannon4492 2 күн бұрын
Excellent video. Really clear and simple to follow. Thanks
@DavidKnicks
@DavidKnicks Ай бұрын
Great video. Your smile is contagious ❤
@BenHeffernanArt
@BenHeffernanArt 4 күн бұрын
1800 bucks sounds good even considering the amount of mucking around to get it up and running having said that could you do the same with an offset account?
@trace.l1977
@trace.l1977 6 күн бұрын
so after split your mortgage accounts, one of them must have redraw function, so you can put your savings of $20K into the redraw account, then withdraw it for investment? But we don't need to pay back to principles, then refinance?
@tritonoftasmania
@tritonoftasmania Ай бұрын
Thanks, it is really hard to find concise information about how debt recycling is done. Everything I found so far is either super high-level (just tells what it is but deosn't say anything about how you do it) or unnecessarily complex (ie what if you invest the recycled money under a trust and it negative gears 🤯) Is the new 20K split P&I or IO? If P&I, does that have the same interest rate as your home loan? (Small)
@InvestWithQueenie
@InvestWithQueenie Ай бұрын
Thanks so much for watching! So glad you found it helpful!! For me, it’s P+I and same interest rate - but depends on the bank! ☺️
@koklead7904
@koklead7904 Ай бұрын
I've been catching up on your videos. Good content. A suggestion - can you try to make the volume of your videos consistent? E.g. the vid "How to invest $10k" is so much softer than this one. Thanks.
@InvestWithQueenie
@InvestWithQueenie Ай бұрын
Thanks so much for watching and thanks for the tip! Really appreciate it. Will definitely do this for the next one :)
@inderkalra923
@inderkalra923 14 күн бұрын
Hello Queenie, What is meant by transaction account on loan account ? All my loan accounts directly allow me to redraw. Thanks for the video .. good simplified content.
@indigofox72
@indigofox72 Ай бұрын
I think debt recycling is a great option if you have enough to make it worthwhile. Either investing in property or ETFs I don’t think you can go wrong. Not so much for saving tax but building wealth and using the dividends or whatever profit to pay down the home loan faster.
@riteshb7682
@riteshb7682 Ай бұрын
Small- Nice explanation worth the try
@michaeledwards5545
@michaeledwards5545 24 күн бұрын
Does anyone know if the interest payments can be deducted from other income streams? eg if my interest rate is 6% and i only get 4% dividend return from those investments can i deduct the left over 2% off other income streams?
@jasmeenmalhotra2225
@jasmeenmalhotra2225 15 күн бұрын
Hey Queenie. Thank you so much for breaking it down like this, I was struggling to get my head around debt recycling when I heard about it on a podcast earlier. This is really clear and helpful. Do you think I'd still be eligible for the tax deduction if i invest in property instead of ETFs? Technically that's still for "the purpose of earning income", right?
@mitchgolding9765
@mitchgolding9765 23 күн бұрын
Great video 👏🏽 Such a simple and easy to understand explanation of debt recycling. If I had $100k as a lump sum, I would be debt recycling, however I really do prefer the DCA and auto invest lifestyle 😂 To save the 20k in cash would take 6months or so, it really isn’t worth it to me. And that 20k could be invested in growth and dividend ETFs earning income and growth during that 6month period.
@dreamdream773
@dreamdream773 Ай бұрын
Dividend can also go into the” bad debt “
@simonm3208
@simonm3208 Ай бұрын
small thrills from 20k debt recycling hoop jumping, is what I got from this episode.
@ANUSHELINCHETTY
@ANUSHELINCHETTY Ай бұрын
Great video Queenie. Did your Pearler account have any uninvested AUD before you transferred the funds in from your Debt Recycling loan split? If so, you may have cross contaminated the funds prior to investing.... Its cleaner to transfer the funds into a brokerage account with a zero dollar balance.
@InvestWithQueenie
@InvestWithQueenie Ай бұрын
Thanks so much for sharing and for the tip! No it didn't and I made sure I invested in a different ETF for debt recycling so it doesn't cross-contaminate! Hope you have a great day.
@lafaele1980
@lafaele1980 Ай бұрын
I just did this and now have 80k that’s tax deductible. It’s a win win now I’m about to settle on an IP. It’s worth the hassle
@InvestWithQueenie
@InvestWithQueenie Ай бұрын
So good!! Well done 🙌🙌
@uberboiz
@uberboiz Ай бұрын
Is the yield on the IP high enough to cover the loan repayment?
@lafaele1980
@lafaele1980 Ай бұрын
@@InvestWithQueeniethank you
@lafaele1980
@lafaele1980 Ай бұрын
@@uberboizno but, instead of paying off non-taxable debt I’m putting the same amount of money on taxable debt
@uberboiz
@uberboiz Ай бұрын
@@lafaele1980 right - so how is it a 'win win' if the yield on the asset you financed using debt isn't even high enough to cover the loan repayment (notwithstanding the fact that the interest is tax deductible)?
@MrTheog83
@MrTheog83 Ай бұрын
Would the bank split the entire 700k loan into multiple 20k groups in a single phone call? I.e. into 35 groups of 20k each
@InvestWithQueenie
@InvestWithQueenie Ай бұрын
$20k is the minimum with my bank, but usually you can do bigger splits! But important to do your own research and get financial advice if needed ☺️🙌
@sixfootfourwarrior
@sixfootfourwarrior 7 күн бұрын
The tax savings and dividends on 100k are poo. The risk vs reward isn't worth it.
@Balthazarry
@Balthazarry Ай бұрын
Small 😊
@StMaanco
@StMaanco Ай бұрын
But your paying $1300 to get a $360 tax deduction, hows that worth it
@InvestWithQueenie
@InvestWithQueenie Ай бұрын
I would already be paying that in interest, but now it's tax-deductible because I did it through debt recycling!
@StMaanco
@StMaanco Ай бұрын
@InvestWithQueenie so you would have got a loan to invest in shares?
@lukeconti-nibali2100
@lukeconti-nibali2100 3 күн бұрын
​@@StMaanco Did you watch the video bro? She puts the 20k down on her mortgage then REDRAWS it to invest in shares. Because investing in shares is a tax deductible operation when charged interest, she claims the interest paid on the 20k portion as a cost for her investment (the shares)
@DavidKnicks
@DavidKnicks Ай бұрын
Small 😮
@Migster1965
@Migster1965 Ай бұрын
Small.
@lafaele1980
@lafaele1980 Ай бұрын
Small
@pramodtg111sep
@pramodtg111sep Ай бұрын
First 😊😊
@InvestWithQueenie
@InvestWithQueenie Ай бұрын
🎉 yes you are!!
@anniemajor5347
@anniemajor5347 20 күн бұрын
Small :)
@yz9459
@yz9459 Ай бұрын
You can achieve this just by using offset account with your home loan. No need to do the split.
@InvestWithQueenie
@InvestWithQueenie Ай бұрын
Not according to the advice I got! Plus it can be hard to see exactly what portion of the loan is tax deductible if you just transfer it to the offset and the funds are mixed in with your other savings! Do your own research and get financial advice if needed ☺️
@adrianegr89
@adrianegr89 Ай бұрын
There is an episode made by Equity Mates where they compare debt recycling vs topping súper vs offset. And the worst (by far) was offset. Is not a bad strategy, though. There are just better options. Get solid advice and focus on maximizing returns. Cheers
@Sarmuu
@Sarmuu Ай бұрын
@@adrianegr89 They all have differrent purposes, I do all 3, just need to understand the tax concequences of each one of them, for example debt recycling don't make sense if you want to upgrade your PPOR, you actually want to perserve the debt (Debt Perservation) by utilising an offset account so that you get max tax benefit in the future. I see so many people who pay down large chunk of money into their redraw account in their current PPOR only to redraw it out to use as money for upgrading their PPOR, you then have a large portion of person debt that is not tax deductable, while have a small amount of investment debt that is tax deductable. But then other times, I see people also buy investment properties using cash sitting in their offset account, without first put into the redraw account and redraw them out to do a debt recycling. Again those extra money in offset that is used to purchase investment property becomes personal debt and is not tax deductable. Also I always do a loan split for each debt recycle, make you and your accountant's life much easier, probably the only time I don't do loan split for debt recycle is when I'm paying down the entire debt to do recycling, I know every $ I redraw from this account can only be used for investment purposes, therefore 100% of the interest is tax deductable.
@indigofox72
@indigofox72 Ай бұрын
Most banks do not link the offset it’s a sales gimmick. Not all banks of course but most don’t know if the offset is actually doing what it’s supposed to.
@mitchgolding9765
@mitchgolding9765 23 күн бұрын
@@indigofox72on our mortgages, we can clearly see the offset account linked to the main loan account. The offset product needs to be linked to the main loan account.
@lingssakeo
@lingssakeo Ай бұрын
Small
@indigofox72
@indigofox72 Ай бұрын
Small
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