🎁🎁🎁 GRAB SOME FREEBIES 🎁🎁🎁 💰Use Moomoo App (chess sponsored) to buy shares & get these free bonuses 🎁: 1. 10 FREE Stocks (worth up to $3,626). 2. Earn 6.8% Interest for up to 100K Uninvested Cash. 3. $2,000 Brokerage free cards (free brokerage fees for 30 days. Click this link to sign up: j.moomoo.com/00A1xQ 💰Get $100 FREE if you sign up to ING with this link or use code: Jir462 & complete the 4 steps: bit.ly/3BuKGHd 💰 Ubank: Get $30 FREE if you sign up with my code & make 5 small purchases: bit.ly/3L0duZM or Use Code: MDPYUAG
I was told my my tax man this won’t work if you live in the home? But I’m sure you said you can do this while living in the home..? Which it it please? I live in Adelaide..
Hi Bryan, Think there is a flaw. If you look at your video at 06:32 You make $2000 in dividends at 4%. However you pay an extra $2500 (5% interest on 50K) You are losing $500. I’d rather leave that $500 in the offset and pay off the principal rather than losing. Your strategy will work if it’s earning more than 5%. But hey in todays market you have to atleast make 6.34% to beat your mortgage interest rate.
@@Venkata_kumar_us Hey mate, the 4% is just from dividends. You need to take into account share price appreciation as well. The stock market usually averages 8-10% per year in the long term. It's not guaranteed to continue of course but we investing in the hope it does. Plus you will get a tax credit on the interest rate since you borrowed to invest.
@@BryanInvest is moomo cheap broker fees? How much is it to trade and buy? I used comsec in past was so expensive. Can I use moomo to get vas and vgs and do monthly pay, also any thoughts on asx zip
Bryan I keep thinking something is missing in your example: the interest on the new loan 2! In the chart at 5:34 the new loan 2 will have an interest cost that needs to be paid. Without digging into your own savings, this interest cost is funded by the dividend income. So if Interest cost is say 5% and Dividend Income is also 5%, there is no net cash leftover to pay down the bigger housing loan 1. In order for this to work, the dividend % earned has to be greater than interest %, and only that small differential would be what can be paid off Loan 1
Hi Lakun, I understand what you are saying. The interest on loan 2 would have to be paid regardless. In fact, it’s the main reason we can claim a tax deduction. Without a debt recycling strategy, you would be paying the same amount of interest on 500k vs 450k + 50k. So yes, you would have to dig into your own savings to pay the interest (which you would be paying anyway). The main idea of debt recycling is to get that tax deduction on the interest (loan 2) you were going to pay anyway.
Depending on your Debt-to-Income Ratio it's definitely worth it. However, with current interest rates and extra expenses, you'd better make sure your income can cover the cost of holding investment properties. Could you present a cost model with a timeframe for this exercise. A Gantt chart easily explains the step-by-step process.
What I see in Option 2 (6:31) is that you made $1300 from dividends and you made $875 by savings on tax but you paid out $2500 as interest so you made a total loss of [$2500 - ($1300+$875)] = $ 325.. so essentially its not making for you but taking away an extra $325 .. without this strategy, you wouldn't have paid that $2500 on interest anyways as you have offset it using your $50K savings ....Am I missing anything ?
Yes, I see your point but you're not taking into account the share price appreciation. Historically, the stock market returns 8-10% on average per year. This is not guaranteed of course but that's the risk you take as an investor. Anyway, the point of the video is the best tax efficient strategy for people who have ALREADY decided to invest outside of super. Not people who are deciding whether to invest or keep money in offset.
Hi, I think this example is when you already have the money in an offset account. Because if you already have the 50k in an offset and take the money out to invest, you will be paying the extra 2500 in interest regardless!
When you compared option 1 vs Option 2 (6:30). There should have been an Option 3 with not touching your Offset amount of 50K..considering you have a 100% Offset arrangement with that $50K, you save the entire interest payable on that 50K vs saving only the 35% tax on the interest paid on that $50K shown under option 2. So essentialy: Option 1: $1300 returns from share dividends Option 2: $ 2175 ($1300 from share dividends + $875 from tax savings on interests) Option 3 (Suggested in comments above) : $ 2500 savings by keeping money in Offset account I am happy to be proved wrong
Hi Sawab, I understand what you're saying. However, I have mentioned in the video that debt recycling makes sense IF you were planning to invest into shares anyway (so investing without receiving tax benefit). We can debate about investing in shares vs keeping money in offset all day long. There's not really a correct answer. What you are not taking into account with Option 1 and 2 is the historical expected overall return of shares in the long term which is about 8-10% on average per year. Eg. Option 1 & 2 should be $1300 from dividends plus any share price appreciation. Of course this is not guaranteed which is where the risk lies. I understand that the offset interest is a guaranteed tax free return and is a good option for some who are more risk averse. However, people invest in shares hoping they can beat the offset interest rate which historically it has. Otherwise, no one would bother investing and just keep all money in offset. So the point of the video is not offset vs investing. It's the most tax efficient way to invest IF you have already decided to invest outside Super.
@@BryanInvest Sure thanks for the clarification , so taking out money from an offset account and investing in anything which provides a return rate higher than my ROI on my current Home loan would definitely makes sense.. By the way your video content and presentation are excellent and provides massive value
Do you have to pay 50K into the second loan and immediately redraw (minute 6:18)? If interest rates are the same in the split loan, wouldn't leaving it in the offset have the same outcome? Or can debt recycling only be realised if is paid (from the offset) and immediately redrawn, instead of just borrowing from your equity directly?
Not really. Usually the bank you are moving to will cover all moving costs + may also give your a few thousand dollars in cash back for switch. The main cost is the time inconvenience to setup all your accounts again.
Hi Bryan, thanks for the video which is better than a stake sandwhich. Do you think it is a good time to do a ''debt conversion'' this time of high interest rate for those in mortgage?
Great video. I have a question please: In example 2 where the home loan was split to 450K and 50K and directing dividends to pay the 450K bad debt. You said we can continue to grow the shares portfolie by redrawing the additional payments and buying more shares with it, how is that can be done step by step please? The dividends will go to the 450K loan, how can you then take them out and put them into the 50K loan to buy more shares?
Hi, For the first method, if we earn dividends which is a profit (capital tax deductions) and pay off the first loan. We still have to pay that tax on profit, rigjt, where is tax deduction on that?
Yes, you still have to pay tax. The tax deduction comes from the interest rate you're charged for borrowing money to use for investing. 'If you borrow money to buy shares or related investments from which you earn dividends or other assessable income, you can claim a deduction for the interest you pay'. www.ato.gov.au/individuals-and-families/income-deductions-offsets-and-records/deductions-you-can-claim/investments-insurance-and-super/interest-dividend-and-other-investment-income-deductions
I have watched this video and could not stop myself watching it again and again until I got better understanding. Especially for the people having very little knowledge in this field. Subscribed the channel
Sandwich! Thanks for this awesome video. I definitely check all the boxes for someone who could debt recycle, and at first I was like 'jeez, why am I not doing this?' The 'not so fast' bit gave me some pause, definitely worth running the numbers first.
Hi Brian, PPR In order to get tax deduction, does the money invested in shares have to be hold under a personal name or it works in trust account as well? Thanks!
Considering if an individual already has a Share portfolio prior to debt recycling, is it recommended to have a separate HIN for debt recycled pool of shares?
Sounds great, however trying me trying to explain this concept to my Bank would be impossible. I will watch a few more times to try to better understand, thank you. Great channel!
I love your videos Bryan but I need advice on who to go to for more detailed advice on this strategy. Who do I go to for help? I would really like a company who manages all this for me, or even an advisor who can help. Our tax agent does not seem to help us with this. Please point me in the right direction if you can suggest something please?
So let's say i have a rental property with 300k left to pay, I should split the loan and instead of just investing the 100k from the offset account (which i was planning in the first place) i should pay the account down to 200k and redraw the amount? How does paying off the loan and redraw affect the equity i can use for a future ppor? We're rentvesting at the moment ..
Yes that's correct. I don't think impact future equity. You still end up in the same place. I would recommend speaking to a tax accountant to set up your accounts properly.
Thanks for the vid. For your second way of debt recycle, this means you pay less repayment compared to the first way (coz interest only loan is always higher than home loan rate) and it is not technically borrowing equity from the bank anymore but using your own cash. Is that right? Does this increate the home loan you paying for the original home loan given you are using the extra cash for investment instead of offsetting the home loan? Thanks
Yes, it will. Those extra repayments will reduce the amount of interest you'll have to pay so over time you will end up paying off your mortgage sooner!
But that only works if you have pisitive cash flow property and yields ? As ij if your investment property is negatively geaared yoi lose momey onnit and the tax isnt that substantial, so you could only pay your ppor off once you sell your ip? But it needs cash flow positive and high growth and hold for at least 10 years?
Not really. While ideally, you want your properties to have positive cash flow, debt recycling only requires you to borrow money to invest in income producing assets. The example I used is using borrowed money to invest into shares that you would have invested in anyway. That way you can claim the interest on the borrowed money. Of course, you can argue that the shares you buy may be red for the next 30 years but that's part of the risk you would have taken anyway (assuming you were going to invest in those shares without debt recycling anyway).
Hey Bryan Thanks a lot for sharing your knowledge. I have learned a lot from. Can you also share your views on how to buy property as a primary residence. I am new to Australia and confused where to buy. Should I use mortgage brokers, is the price right for this property. How will my investment perform. I am living in Melbourne. As my experience tell me that when too many people talk about some share don’t buy it until everything cools off does the same rule apply for property. Can you make detail video about your views on this topic please.
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?
Any bank or financial institution you recommend for the line of credit? I am with NAB and their line of credit rate is: 9.28% while my home loan is at 6.34%?
Hi @bryaninvest, thanks for the helpful,video. I have a couple of questions for you. If you are choosing share investments (my preferences is ETFs), should you focus on high dividend paying shares for this strategy or high capital growth? Also, do the dividend paying shares need to be Aussie or will global work too?
Hey Alexis, I have a long term outlook and plan to hold for ages so I prefer more capital growth. With dividends, you will have to pay tax everytime even if you set up DRP. As long as the stock is bought from the ASX, they should be paid in AUD. So there many global ETFs on the ASX that still pay AUD.
@@BryanInvest thanks Bryan. So the true benefit derives from the total return growth (capital and dividends combined)… dividends are only necessary to ensure it is an ‘income generating asset’ and therefore the loan is tax deductible debt? In fact, a low dividend paying asset is better because it means a larger net income loss and improves the tax benefit if I am thinking correctly?
There is always risks when investing in shares. That’s why some investors go for ETFs/index funds since there is less ‘human management’ involved and you’re just automatically buying the entire market.
This is one of the best videos I have seen on debt recycling. You covered it so cleanly and comprehensively. kudos! Does the investment have to happen in a dividend generating stock? I do options trading to generate income. I assume this would also qualify as investment loan eligible for tax deductions right? I am planning to use my current money from my trading account to pay off the loan account and then redrawing to fund the trading account to continue my share and option trading!
Great question. I’m not 100% sure. I think it depends if you qualify as a trader in the eyes of the ATO. Check out this article: www.insightaccounting.com.au/2015/09/are-you-a-share-investor-or-trader/ You might want to double check with a tax accountant about this while also structuring your loan accounts correctly with them.
Option 2 - interest is deducted from income so net loss is actually $500. For that you get a 30% rebate of $150 so cost is $350. Therefore you need your shares to grow by that amount to make it worthwhile. Even then there is capital gains tax to pay.
Thanks for sharing, ppl often seem to skip explaining the part where the cost far exceeds the tax return. Still be great, if you could cover the cost (or should I say forced savings).
@@thealcobies because if you have 5pk in cash rather than it being from a place of profit you get a loan put 5pk into it then take money out so then it becomes money from debt
Hi Bryan, say if I had $100K sitting in a redraw account of my investment property saving myself 6.5% interest - would it be more beneficial if I redraw it to invest in shares instead so I can maximise my tax benefits or leave it as is to pay off the mortgage faster? Thanks in advance
Theoretically, it could work out better if you did. However, 6.5% is quite high. I would just keep it in the redraw/offset. That 6.5.% is a guaranteed return and tax free. Whereas, nothing is guaranteed in the stock market. It would make more sense to debt recycle in a lower interest rate environment.
Can you simply redraw any extra payment in the home loan, transfer it to a new account and name that account "line of credit" and use it the same way or does it have to be a second loan - Line of credit?
never mind, answered it myself as it won't work unless the account is split into two as it would make it impossible to calculate the interest charged on the 2 x accounts and that's the reason, the second account is recommended.
Not really. The $2500 interest would have to be paid regardless since in the example, you have a 500K loan at 5% interest. In the example, I just simply split the loan into 2. So you're spending an extra $2500, you would have to pay that portion regardless if you didn't split the loan. This way, you would at least get a $875 tax savings for basically doing nothing.
Basically good old risk and return. You are simply risking capital in the expectation of making more income and capital growth than the cost of money after tax benefits. Risk is quite high now I would guess.
Thank god you did reality check on options towards the end of your video. In theory yes, but with many changes post covid many people have had totally change money management. strategies.
Hi @bryan, thanks for the video, very informative; how would this work if you are currently in a primary place of residence (for example 200k equity on 600k property and wanting to get a new loan to purchase a new primary place of residence (keeping the original property as the investment asset)
But aren’t you also paying more for the original loan now that it’s gone from $300k to $400k? How does that cost factor in to your total made for the year?
Yes of course, but you’re using that $100k to buy hopefully appreciating assets that will grow well beyond $100k in the future. Plus the interest is tax deductible. This strategy is for people who were already going to invest in shares.
You should also mention the benefits of fully franked dividends/imputation credits. Great video! :) on a side note ive always preferred the term "debt conversion" i think its far more intuitive.
whats the advantage of a fully frank credit other than the obvious it has no tax to pay. But would this not normally come from an stock purchase, rather than an ETF which makes it a little more risk?
But what no one will tell you as there is no magic wand, is where to invest. I would assume as we are needing the income you would be looking for a greater dividend yield rather than growth. Also if they are better dividend yields would you not DRP or get the payout to bad debt, and then redraw same amount to buy the same etf again.
Say you have that 500K (200K fixed, 300K variable) mortgage with 100K in offset If we want to use 100k to invest in ETFs, I understand we split the mortgage to include a 100k interest only loan (so now 200K fixed, 200 variable and 100K)- when paying down the 100k from offset, 1. does it matter which loan we pay down and is there a preference? 2. Once we have paid down the loan by 100k, do we have to use the total 100k split loan to buy shares or can it be done in parcels? Thank you
pay the non-tax deductible debt first, redraw on this portion and create a split loan. Use the funds from this split loan to invested in share (can be done as lump sum or parcel)
It’d be good if you included an example of interest costs in your calculations. Especially in the first part of the video, it gives the impression that if you borrowed $100k of equity for 4% dividend yield, you’d be able to put all of that $4k back into Loan 1. But that’s will never be the case if there’s interest payable.
I did mention in the example it works best is an interest only loan. The idea is the shares provide a 4% dividend plus approximately 4% share price growth (the historical average return of the stock market). The interest payable would be tax deductible which would not be the case if you don’t debt recycle. This strategy is for someone who is looking to invest in shares anyway. I’m not encouraging you to get a loan to buy shares if that was never your intention in the first place.
I’m a god of devaluation, I buy it and it goes down! Why I can't make earnings is beyond me. It can be annoying how volatile the market is. How can I ride this fresh wave of all-time highs without getting burned again with $450k set aside to get fully invested this year?
I think the whole thing about holding stocks for long term will always apply. So I think you should get a quality broker who is able to analyze and pick stocks that will do well in the long term, else you will be in a long bear ride.
You have a very valid point, I started investing on my own and for a long time, the market was really ripping me off. I decided to hire a broker, even though I was skeptical at first, and I beat the market by more than 9%. I thought it was a fluke until it happened two years in a row, and so I’ve been sticking to investing via an analyst.
There are a handful of experts in the field. I've experimented with a few over the past years, but I've stuck with ‘’Melissa Elise Robinson for about five years now, and her performance has been consistently impressive. She’s quite known in her field, look-her up.
Other vid talks about redraws being a negative vs offset accounts, but here loan 2 redraws are encouraged. Which is the best for someone considering on purchasing a PPOR?
Redraw only becomes an inefficient tax problem if the purpose of the 'loan' is for personal expenses. In this case, we are using it for investment purposes so the tax is treated differently. I prefer offset accounts because they are more flexible.
Hi Bryan, Thanks for the video. What are your thoughts on Gold? For gold, do you suggest physical gold or gold stocks? For gold stocks which are the better ones in Australia with higher liquidity? Would really appreciate your response on this one.
Hey mate, I don't really invest in gold so don't really know too much. I did some research a few months ago and you can invest into gold ETFs like QAU or GOLD which tracks the price of gold. In terms of physical gold, I would have no idea. You should probably read some reviews online to make sure it's safe. There has been some controversy in news about the quality of some of the gold bars.
As Bryan said you can invest in GOLD.ASX as an EFT and also PMGOLD which both give you a physical gold allocation, rather than just a paper based trade some offer.
If your loan interest is greater than your investment returns of 4% you will be getting further in debt. The interest spent is a tax deduction, but the income earned is taxable, basically the net loss is a deduction.
Whilst it is a good concept on how to work around in getting more tax back through an investment property, there’s still an extremely high risk of a) not finding a tenant b) have a tenant who pays enough to cover your principle per month C) hoping to God that nothing in the house needs repair because you’ll be further out of pocket And probably most of all as you would find in majority of the paying off debt cases; D) the debt issue is 80% behaviour 20% financial situation. Majority (not all, but majority) of people who end up making more income don’t utilise it for what it was initially set up for in the first place.
The example in the video was for investing in shares, not an investment property. I get your point though. However, every investment carries risks. There will always be a ‘what if’. It’s just finding out how much risk you’re willing to take that will still let you sleep at night.
That’s a really good point. I would think it’s fine since the tax is benefit the same household but not 100% sure. Best to check with a tax accountant or go with a joint account broker just in case.
I am currently facing a dilemma : I am about to use the cash saving to buy a home for my daughter, it will be as an investment property & she will still be paying basic rent to serve the loan . With the current 5% interest rate, the cash in the bank has been giving me good interest income which I use some portion to invest in stocks. But now if the money move into the offset, not only I lost interest income, I need to top up or collect enough rent to pay the mortgage at 6.3%. I even wonder if I will have to sell shares (unwillingly) to offset mortgage liability … if anyone can advise if there is a better Win Win strategy ..
I think your question is more philosophical than a financial one. From a financial standpoint, if you have a home loan then parking your money in the offset is the superior choice versus leaving it in a HISA since the offset will give you a guaranteed tax free return which is even higher than a HISA. If you want to help out your daughter buy a home then there is no magic pill solution where you can keep your cash in a savings account AND help her with the deposit. It's one or the other. Wish you all the best.
Very useful content, thumbs up.... Just a quick suggestion, can you speak slower please, and also the way you deliver is like you are reading news for audience, hopefully you won't mind...
I’m currently looking at debt recycling or just keeping my money in offset since I’m not too confident about the stock market presently. Do you think it’s a good time to invest? (Sandwich)
If you're not ready to invest then keep your money in the offset account. Then continue to learn about the stock market and psychology behind it then you can revisit this strategy when you're feeling more confident.
When you pull 50k from your home loan you will increase your home loan which means you will pay more interest there. That additional spend was not included in your calculation.
Actually you are not increasing your home loan. The example I used is you have a 500k home loan + 50k in offset. Then you split the loan into 2. Loan 1 = 450k. Loan 2 = 50k. Then you use the 50k in your offset that you already have to pay off loan 2 then redraw (borrow).
Hi Bryan, you talk super fast for the information to sink in so it's information overload at high speed that I have to stop and start the video to write everything down. Thanks for all the info, we appreciate you 🙏🏾
Haha, sorry about that. I'm naturally a fast talker. I've been trying to slow it down for the camera so hopefully future videos will be a bit slower. I appreciate your support! Wishing you all the best.
Hi Bryan, just stumbled onto your account and loving it! Question, let's say I split the loan and take out 200k of equity to invest. with the 200k, can I combine that with my existing shares in the same stake account? or does it need to sit in its own account and be separated from my current existing shares? Hopefully that makes sense. thanks Bryan (:
Hi Jiimmy, thanks for the support! Yes, I believe that shouldn’t be a problem as long as you keep the buy confirmations and keep a record if you ever sell any of the ‘older shares. Just make sure you speak with a tax accountant to properly structure the loan in the first place. Good luck 😉
If it seems too good to be true, it isn't. This is doesn't work unless you can get a greater return than your home loan interest, and you have to keep your home loan on variable rates to keep 100% of any pay down or offset value (i.e. keeping it on the highest interest rates!!) Paying the money off your home loan directly is 100% RISK FREE and incurs NO TAX.
Yes, I stated all this in the video. Also, you do not need to keep your home loan on a variable rate. It can certainly be done with a fixed rate. It's certainly not for everyone. It's for people who are going to use the money to invest anyway.
🎁🎁🎁 GRAB SOME FREEBIES 🎁🎁🎁
💰Use Moomoo App (chess sponsored) to buy shares & get these free bonuses 🎁:
1. 10 FREE Stocks (worth up to $3,626).
2. Earn 6.8% Interest for up to 100K Uninvested Cash.
3. $2,000 Brokerage free cards (free brokerage fees for 30 days.
Click this link to sign up: j.moomoo.com/00A1xQ
💰Get $100 FREE if you sign up to ING with this link or use code: Jir462 & complete the 4 steps: bit.ly/3BuKGHd
💰 Ubank: Get $30 FREE if you sign up with my code & make 5 small purchases: bit.ly/3L0duZM or Use Code: MDPYUAG
I was told my my tax man this won’t work if you live in the home? But I’m sure you said you can do this while living in the home..?
Which it it please? I live in Adelaide..
Hi Bryan,
Think there is a flaw.
If you look at your video at 06:32
You make $2000 in dividends at 4%. However you pay an extra $2500 (5% interest on 50K)
You are losing $500.
I’d rather leave that $500 in the offset and pay off the principal rather than losing.
Your strategy will work if it’s earning more than 5%. But hey in todays market you have to atleast make 6.34% to beat your mortgage interest rate.
@@Venkata_kumar_us Hey mate, the 4% is just from dividends. You need to take into account share price appreciation as well. The stock market usually averages 8-10% per year in the long term. It's not guaranteed to continue of course but we investing in the hope it does. Plus you will get a tax credit on the interest rate since you borrowed to invest.
@@BryanInvest is moomo cheap broker fees? How much is it to trade and buy? I used comsec in past was so expensive. Can I use moomo to get vas and vgs and do monthly pay, also any thoughts on asx zip
so good the only utube vid that I don't have to speed up the talking!
Haha thanks! I also speed up RUclips videos when watching.
Don't encourage him or you might have to slow it down again ;)
I slow Bryan down to 0.8 speed and he is normal! :)
1 Minute in and you've done an amazing job of giving a simple breakdown of the concept. Liked and subscribed for sure!
Thanks for the support!
Bryan I keep thinking something is missing in your example: the interest on the new loan 2! In the chart at 5:34 the new loan 2 will have an interest cost that needs to be paid. Without digging into your own savings, this interest cost is funded by the dividend income. So if Interest cost is say 5% and Dividend Income is also 5%, there is no net cash leftover to pay down the bigger housing loan 1. In order for this to work, the dividend % earned has to be greater than interest %, and only that small differential would be what can be paid off Loan 1
Hi Lakun, I understand what you are saying. The interest on loan 2 would have to be paid regardless. In fact, it’s the main reason we can claim a tax deduction. Without a debt recycling strategy, you would be paying the same amount of interest on 500k vs 450k + 50k. So yes, you would have to dig into your own savings to pay the interest (which you would be paying anyway). The main idea of debt recycling is to get that tax deduction on the interest (loan 2) you were going to pay anyway.
Kindly request you to reduce your speed of speaking plz
@@darshirathod1213 you can use the youtube speed setting and play the vidoe at slower speed (a .75x should be good enough)
Sandwich
Depending on your Debt-to-Income Ratio it's definitely worth it. However, with current interest rates and extra expenses, you'd better make sure your income can cover the cost of holding investment properties. Could you present a cost model with a timeframe for this exercise. A Gantt chart easily explains the step-by-step process.
Mate, you are a legend. Pure gold class information without the bs. Please don’t change.
I appreciate that mate! Don’t worry, I’m all for the Aussie people. More videos coming soon 🫡
What I see in Option 2 (6:31) is that you made $1300 from dividends and you made $875 by savings on tax but you paid out $2500 as interest so you made a total loss of [$2500 - ($1300+$875)] = $ 325.. so essentially its not making for you but taking away an extra $325 .. without this strategy, you wouldn't have paid that $2500 on interest anyways as you have offset it using your $50K savings ....Am I missing anything ?
Yes, I see your point but you're not taking into account the share price appreciation. Historically, the stock market returns 8-10% on average per year. This is not guaranteed of course but that's the risk you take as an investor. Anyway, the point of the video is the best tax efficient strategy for people who have ALREADY decided to invest outside of super. Not people who are deciding whether to invest or keep money in offset.
Hi, I think this example is when you already have the money in an offset account. Because if you already have the 50k in an offset and take the money out to invest, you will be paying the extra 2500 in interest regardless!
One of the best videos people will watch this year.
When you compared option 1 vs Option 2 (6:30). There should have been an Option 3 with not touching your Offset amount of 50K..considering you have a 100% Offset arrangement with that $50K, you save the entire interest payable on that 50K vs saving only the 35% tax on the interest paid on that $50K shown under option 2.
So essentialy:
Option 1: $1300 returns from share dividends
Option 2: $ 2175 ($1300 from share dividends + $875 from tax savings on interests)
Option 3 (Suggested in comments above) : $ 2500 savings by keeping money in Offset account
I am happy to be proved wrong
Hi Sawab, I understand what you're saying. However, I have mentioned in the video that debt recycling makes sense IF you were planning to invest into shares anyway (so investing without receiving tax benefit).
We can debate about investing in shares vs keeping money in offset all day long. There's not really a correct answer. What you are not taking into account with Option 1 and 2 is the historical expected overall return of shares in the long term which is about 8-10% on average per year. Eg. Option 1 & 2 should be $1300 from dividends plus any share price appreciation. Of course this is not guaranteed which is where the risk lies. I understand that the offset interest is a guaranteed tax free return and is a good option for some who are more risk averse. However, people invest in shares hoping they can beat the offset interest rate which historically it has. Otherwise, no one would bother investing and just keep all money in offset.
So the point of the video is not offset vs investing. It's the most tax efficient way to invest IF you have already decided to invest outside Super.
@@BryanInvest Sure thanks for the clarification , so taking out money from an offset account and investing in anything which provides a return rate higher than my ROI on my current Home loan would definitely makes sense.. By the way your video content and presentation are excellent and provides massive value
@@SawabAhmed Thank you, Sawab. I appreciate that! 👍
Do you have to pay 50K into the second loan and immediately redraw (minute 6:18)? If interest rates are the same in the split loan, wouldn't leaving it in the offset have the same outcome? Or can debt recycling only be realised if is paid (from the offset) and immediately redrawn, instead of just borrowing from your equity directly?
Isnt there a cost to remortgaging every year?
Not really. Usually the bank you are moving to will cover all moving costs + may also give your a few thousand dollars in cash back for switch. The main cost is the time inconvenience to setup all your accounts again.
What about if I refinance my mortgage to a different bank. Would it interrupt the strategy?
Do we have to invest all money from the split loan in lump sum or we can invest monthly basis?
I believe you can invest monthly.
Hi Bryan, thanks for the video which is better than a stake sandwhich. Do you think it is a good time to do a ''debt conversion'' this time of high interest rate for those in mortgage?
sandwich time, thanks this explanation is simple and concise.
Thanks Adam. That's what I like to hear 😄
Great video.
I have a question please:
In example 2 where the home loan was split to 450K and 50K and directing dividends to pay the 450K bad debt. You said we can continue to grow the shares portfolie by redrawing the additional payments and buying more shares with it, how is that can be done step by step please?
The dividends will go to the 450K loan, how can you then take them out and put them into the 50K loan to buy more shares?
The information is very good but you talk too fast mate. Hard to sink in and follow the information.
Configuration => speed => 0.75
I just watch it 30 times 😂
Can you do this with an investment property and put dividends into your PPOR? If so what’s the formula with this?
Hi,
For the first method, if we earn dividends which is a profit (capital tax deductions) and pay off the first loan. We still have to pay that tax on profit, rigjt, where is tax deduction on that?
Yes, you still have to pay tax. The tax deduction comes from the interest rate you're charged for borrowing money to use for investing.
'If you borrow money to buy shares or related investments from which you earn dividends or other assessable income, you can claim a deduction for the interest you pay'.
www.ato.gov.au/individuals-and-families/income-deductions-offsets-and-records/deductions-you-can-claim/investments-insurance-and-super/interest-dividend-and-other-investment-income-deductions
I have watched this video and could not stop myself watching it again and again until I got better understanding. Especially for the people having very little knowledge in this field. Subscribed the channel
That's great. Glad the video was helpful 👍
Same!
Should the dividends go into line of credit account, or can it be part of reinvestment plan to maximise the tax benefit?
So I have an investment property but living regional and paying subsidised rent. Can I still do this?
Sandwich! Thanks for this awesome video. I definitely check all the boxes for someone who could debt recycle, and at first I was like 'jeez, why am I not doing this?' The 'not so fast' bit gave me some pause, definitely worth running the numbers first.
I'm glad you paid attention to the 'not so fast' bit. Like most things in life, you need to make calculated decisions and not just jump right in!
Bryan , how do you split the home loan ? Do all banks allow you to split and redraw after making the payment?what’s the advantage of splitting?
Is line of credit normally same interest rate as home loan for this case?
Hi Brian, PPR In order to get tax deduction, does the money invested in shares have to be hold under a personal name or it works in trust account as well? Thanks!
Considering if an individual already has a Share portfolio prior to debt recycling, is it recommended to have a separate HIN for debt recycled pool of shares?
Sounds great, however trying me trying to explain this concept to my Bank would be impossible. I will watch a few more times to try to better understand, thank you. Great channel!
Haha no problem mate. Speak to a loan manager at the bank, they should be aware of this.
I love your videos Bryan but I need advice on who to go to for more detailed advice on this strategy. Who do I go to for help? I would really like a company who manages all this for me, or even an advisor who can help. Our tax agent does not seem to help us with this. Please point me in the right direction if you can suggest something please?
Thank you Bryan.
Really appreciate it.
Saved me from just refinancing and cashing out
Awesome! Wish you all the best.
This is a great video, real informative and tells you how to use the system, my problem is Im too risk avert to try it, sandwich.
Cheers mate. That’s fair enough. It’s not for everyone. It’s just another tool in the arsenal at the end of the day!
So let's say i have a rental property with 300k left to pay, I should split the loan and instead of just investing the 100k from the offset account (which i was planning in the first place) i should pay the account down to 200k and redraw the amount? How does paying off the loan and redraw affect the equity i can use for a future ppor? We're rentvesting at the moment ..
Yes that's correct. I don't think impact future equity. You still end up in the same place. I would recommend speaking to a tax accountant to set up your accounts properly.
Thanks for the vid. For your second way of debt recycle, this means you pay less repayment compared to the first way (coz interest only loan is always higher than home loan rate) and it is not technically borrowing equity from the bank anymore but using your own cash. Is that right? Does this increate the home loan you paying for the original home loan given you are using the extra cash for investment instead of offsetting the home loan? Thanks
If I just start paying extra each week on my mortgage will that reduce the interest or do I have to ring the bank?
Yes, it will. Those extra repayments will reduce the amount of interest you'll have to pay so over time you will end up paying off your mortgage sooner!
@@BryanInvest thank you legend
But that only works if you have pisitive cash flow property and yields ? As ij if your investment property is negatively geaared yoi lose momey onnit and the tax isnt that substantial, so you could only pay your ppor off once you sell your ip? But it needs cash flow positive and high growth and hold for at least 10 years?
Not really. While ideally, you want your properties to have positive cash flow, debt recycling only requires you to borrow money to invest in income producing assets. The example I used is using borrowed money to invest into shares that you would have invested in anyway. That way you can claim the interest on the borrowed money. Of course, you can argue that the shares you buy may be red for the next 30 years but that's part of the risk you would have taken anyway (assuming you were going to invest in those shares without debt recycling anyway).
@@BryanInvest ok great . Also you channel is amazing and clear and informative with no sales. Keep up the good work
Hey Bryan
Thanks a lot for sharing your knowledge. I have learned a lot from.
Can you also share your views on how to buy property as a primary residence. I am new to Australia and confused where to buy. Should I use mortgage brokers, is the price right for this property. How will my investment perform. I am living in Melbourne. As my experience tell me that when too many people talk about some share don’t buy it until everything cools off does the same rule apply for property. Can you make detail video about your views on this topic please.
Hello. Welcome to Australia. I will definitely make a future video on this topic. 😊
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?
Hi, thank you for your video. Is there a way fo debt recycling for investment property with equity? Thanks!
Any bank or financial institution you recommend for the line of credit? I am with NAB and their line of credit rate is: 9.28% while my home loan is at 6.34%?
@2:33
Shouldn’t loan 1 be 300k and loan 2 be 100k? Making the whole loan $400k?
hi, can i still do this with an investment property mortgage? or is it only for PPOR mortgage?
Yep 100% with an IP, am currently doing the same now. Although we plan to make it a PPOR in around 15yrs
Would be interesting to see how debt recycling is done with real estate.
I think it's a bit more complicated with real estate but would be a great topic for sure!
Sandwich, Thank you for an informative vid.
🫡
Sandwich! It’s great you have emphasised all is involved. It is not about magic!
Thanks Debora. Yes, this is definitely not a magic pill.
Hi @bryaninvest, thanks for the helpful,video. I have a couple of questions for you. If you are choosing share investments (my preferences is ETFs), should you focus on high dividend paying shares for this strategy or high capital growth? Also, do the dividend paying shares need to be Aussie or will global work too?
Hey Alexis, I have a long term outlook and plan to hold for ages so I prefer more capital growth. With dividends, you will have to pay tax everytime even if you set up DRP. As long as the stock is bought from the ASX, they should be paid in AUD. So there many global ETFs on the ASX that still pay AUD.
@@BryanInvest thanks Bryan. So the true benefit derives from the total return growth (capital and dividends combined)… dividends are only necessary to ensure it is an ‘income generating asset’ and therefore the loan is tax deductible debt? In fact, a low dividend paying asset is better because it means a larger net income loss and improves the tax benefit if I am thinking correctly?
Sandwich! Thank you for sharing your knowledge, Bryan.
Thank you! 💙
Agree! The bigger share the bigger dividends. 😊
My question now is, is there a chance that your shares crash if managed by a wealth management?
There is always risks when investing in shares. That’s why some investors go for ETFs/index funds since there is less ‘human management’ involved and you’re just automatically buying the entire market.
This is one of the best videos I have seen on debt recycling. You covered it so cleanly and comprehensively. kudos!
Does the investment have to happen in a dividend generating stock?
I do options trading to generate income. I assume this would also qualify as investment loan eligible for tax deductions right?
I am planning to use my current money from my trading account to pay off the loan account and then redrawing to fund the trading account to continue my share and option trading!
Great question. I’m not 100% sure. I think it depends if you qualify as a trader in the eyes of the ATO. Check out this article: www.insightaccounting.com.au/2015/09/are-you-a-share-investor-or-trader/
You might want to double check with a tax accountant about this while also structuring your loan accounts correctly with them.
sandwich! never knew this kind of thing existed. Thanks!
No worries!
Option 2 - interest is deducted from income so net loss is actually $500. For that you get a 30% rebate of $150 so cost is $350. Therefore you need your shares to grow by that amount to make it worthwhile. Even then there is capital gains tax to pay.
Thanks for sharing, ppl often seem to skip explaining the part where the cost far exceeds the tax return. Still be great, if you could cover the cost (or should I say forced savings).
The capital gains tax will be a tax deduction because it's associated with mo ey made from debt.
I dont understand why with option 2 you have to pay 50k the second loan and redraw immediately?
@@thealcobies because if you have 5pk in cash rather than it being from a place of profit you get a loan put 5pk into it then take money out so then it becomes money from debt
@@vkturbo7676ohhh thank you. I watched the vid again and it was from offset.
Gold content! Thanks Bryan 💯🙏
Hi Bryan, say if I had $100K sitting in a redraw account of my investment property saving myself 6.5% interest - would it be more beneficial if I redraw it to invest in shares instead so I can maximise my tax benefits or leave it as is to pay off the mortgage faster? Thanks in advance
Theoretically, it could work out better if you did. However, 6.5% is quite high. I would just keep it in the redraw/offset. That 6.5.% is a guaranteed return and tax free. Whereas, nothing is guaranteed in the stock market. It would make more sense to debt recycle in a lower interest rate environment.
Cheers Bryan.. appreciate your input
Can you simply redraw any extra payment in the home loan, transfer it to a new account and name that account "line of credit" and use it the same way or does it have to be a second loan - Line of credit?
never mind, answered it myself as it won't work unless the account is split into two as it would make it impossible to calculate the interest charged on the 2 x accounts and that's the reason, the second account is recommended.
loan sandwich, great info as always. Im keen to give this a go. Thanks Bryan. Great video as always
Great to hear, Sheldon. Wish you all the best 😄
Sandwich. Great video ❤
Thank you! ☺️
Well sandwich it is 😊. Thanks for the genuine and useful tips.
Thanks mate! Glad it helped you 😄
What if you buy the wrong shares?
That’s always the risk. This strategy is not risk free. However, the strategy is for people are were going to invest in shares anyway.
Steak Sandwich! Oh man... my brain is boggled with all this great info, Bro! So much to think about haha! Thanks for sharing, Bryan
Thank you! You're making me hungry bro. I hope this video awakens the hunger inside you to push on with your investing journey 👊💙
In the 2nd example you have to spend $2500 in interest expenses to gain a $875 in tax savings though. Isn't that costing you more?
Not really. The $2500 interest would have to be paid regardless since in the example, you have a 500K loan at 5% interest. In the example, I just simply split the loan into 2. So you're spending an extra $2500, you would have to pay that portion regardless if you didn't split the loan. This way, you would at least get a $875 tax savings for basically doing nothing.
Basically good old risk and return. You are simply risking capital in the expectation of making more income and capital growth than the cost of money after tax benefits. Risk is quite high now I would guess.
I will be implementing this if there is a significant market correction.
Nicely put. You nailed it. If you're a long term investor and were planning to invest in Index ETFs anyway then this is way more tax efficient.
Have a thumbs up sandwich! Definitely given me food for thought! This is a much needed vid for Aussies!
Sammich. Also, there is but 1 NO RISK investment... Its investing in YOURSELF!
Absolutely. There is no greater investment than in yourself! 🤝
Thank god you did reality check on options towards the end of your video. In theory yes, but with many changes post covid many people have had totally change money management. strategies.
Absolutely. Debt recycling is great if you mean all the prerequisites but its definitely not for everyone.
Hi @bryan, thanks for the video, very informative; how would this work if you are currently in a primary place of residence (for example 200k equity on 600k property and wanting to get a new loan to purchase a new primary place of residence (keeping the original property as the investment asset)
But aren’t you also paying more for the original loan now that it’s gone from $300k to $400k? How does that cost factor in to your total made for the year?
Yes of course, but you’re using that $100k to buy hopefully appreciating assets that will grow well beyond $100k in the future. Plus the interest is tax deductible. This strategy is for people who were already going to invest in shares.
You should also mention the benefits of fully franked dividends/imputation credits. Great video! :) on a side note ive always preferred the term "debt conversion" i think its far more intuitive.
Absolutely mate. Thanks for pointing that out. Debt conversion sounds more modern 😎
whats the advantage of a fully frank credit other than the obvious it has no tax to pay. But would this not normally come from an stock purchase, rather than an ETF which makes it a little more risk?
Line of credit interest rate is like 10%. Is that tax deductible against your home loan? I don't think so?
But what no one will tell you as there is no magic wand, is where to invest. I would assume as we are needing the income you would be looking for a greater dividend yield rather than growth. Also if they are better dividend yields would you not DRP or get the payout to bad debt, and then redraw same amount to buy the same etf again.
Say you have that 500K (200K fixed, 300K variable) mortgage with 100K in offset
If we want to use 100k to invest in ETFs, I understand we split the mortgage to include a 100k interest only loan (so now 200K fixed, 200 variable and 100K)- when paying down the 100k from offset,
1. does it matter which loan we pay down and is there a preference?
2. Once we have paid down the loan by 100k, do we have to use the total 100k split loan to buy shares or can it be done in parcels?
Thank you
pay the non-tax deductible debt first, redraw on this portion and create a split loan. Use the funds from this split loan to invested in share (can be done as lump sum or parcel)
It’d be good if you included an example of interest costs in your calculations. Especially in the first part of the video, it gives the impression that if you borrowed $100k of equity for 4% dividend yield, you’d be able to put all of that $4k back into Loan 1. But that’s will never be the case if there’s interest payable.
I did mention in the example it works best is an interest only loan. The idea is the shares provide a 4% dividend plus approximately 4% share price growth (the historical average return of the stock market). The interest payable would be tax deductible which would not be the case if you don’t debt recycle. This strategy is for someone who is looking to invest in shares anyway. I’m not encouraging you to get a loan to buy shares if that was never your intention in the first place.
I’m a god of devaluation, I buy it and it goes down! Why I can't make earnings is beyond me. It can be annoying how volatile the market is. How can I ride this fresh wave of all-time highs without getting burned again with $450k set aside to get fully invested this year?
I think the whole thing about holding stocks for long term will always apply. So I think you should get a quality broker who is able to analyze and pick stocks that will do well in the long term, else you will be in a long bear ride.
You have a very valid point, I started investing on my own and for a long time, the market was really ripping me off. I decided to hire a broker, even though I was skeptical at first, and I beat the market by more than 9%. I thought it was a fluke until it happened two years in a row, and so I’ve been sticking to investing via an analyst.
This sound interesting. I’m not really one to use pro analysts, but I guess it would not hurt to try one. My portfolio is in the red waters right now
There are a handful of experts in the field. I've experimented with a few over the past years, but I've stuck with ‘’Melissa Elise Robinson for about five years now, and her performance has been consistently impressive. She’s quite known in her field, look-her up.
She appears to be well-educated and well-read. I ran a Google search on her name and came across her website; thank you for sharing.
Other vid talks about redraws being a negative vs offset accounts, but here loan 2 redraws are encouraged. Which is the best for someone considering on purchasing a PPOR?
Redraw only becomes an inefficient tax problem if the purpose of the 'loan' is for personal expenses. In this case, we are using it for investment purposes so the tax is treated differently. I prefer offset accounts because they are more flexible.
Hi Bryan,
Thanks for the video. What are your thoughts on Gold? For gold, do you suggest physical gold or gold stocks? For gold stocks which are the better ones in Australia with higher liquidity?
Would really appreciate your response on this one.
Hey mate, I don't really invest in gold so don't really know too much. I did some research a few months ago and you can invest into gold ETFs like QAU or GOLD which tracks the price of gold. In terms of physical gold, I would have no idea. You should probably read some reviews online to make sure it's safe. There has been some controversy in news about the quality of some of the gold bars.
As Bryan said you can invest in GOLD.ASX as an EFT and also PMGOLD which both give you a physical gold allocation, rather than just a paper based trade some offer.
If I already have a $50k share portfolio, any way I can transition that to be tax deductible?
Could you recommend any tax specialists? The accountant I see (franchise) are useless
Sandwich! Thanks for this, found it very helpful
Glad to hear! 🤝
I didn't understand the Sandwich part until the end. 😂
Great video. Thanks
Sandwich.
First video. Subscribed.
Awesome! Welcome to the family 👊
If your loan interest is greater than your investment returns of 4% you will be getting further in debt. The interest spent is a tax deduction, but the income earned is taxable, basically the net loss is a deduction.
Great content and super helpful. Thank you Bryan!
Awesome! Thank you ☺
Sandwich 🥪 Subscribed great video ❤
Cheers! Welcome to the family 😎
Few selective videos/channels I watch at 0.75X speed; otherwise, it's 1.25X or higher. Respect!😁
Haha! I am honoured 😂
I asked for a equity to my current home loan bank and they have given me this $$ by adding into my current home loan, will this be a problem?! thanks!
Whilst it is a good concept on how to work around in getting more tax back through an investment property, there’s still an extremely high risk of
a) not finding a tenant
b) have a tenant who pays enough to cover your principle per month
C) hoping to God that nothing in the house needs repair because you’ll be further out of pocket
And probably most of all as you would find in majority of the paying off debt cases;
D) the debt issue is 80% behaviour 20% financial situation.
Majority (not all, but majority) of people who end up making more income don’t utilise it for what it was initially set up for in the first place.
The example in the video was for investing in shares, not an investment property.
I get your point though. However, every investment carries risks. There will always be a ‘what if’. It’s just finding out how much risk you’re willing to take that will still let you sleep at night.
PPOR is dual ownership (husband & wife).. Using platform like Stake, it can only be single investor? Assume this would only be half the tax benefit ?
That’s a really good point. I would think it’s fine since the tax is benefit the same household but not 100% sure. Best to check with a tax accountant or go with a joint account broker just in case.
I am currently facing a dilemma : I am about to use the cash saving to buy a home for my daughter, it will be as an investment property & she will still be paying basic rent to serve the loan . With the current 5% interest rate, the cash in the bank has been giving me good interest income which I use some portion to invest in stocks. But now if the money move into the offset, not only I lost interest income, I need to top up or collect enough rent to pay the mortgage at 6.3%. I even wonder if I will have to sell shares (unwillingly) to offset mortgage liability … if anyone can advise if there is a better Win Win strategy ..
I think your question is more philosophical than a financial one. From a financial standpoint, if you have a home loan then parking your money in the offset is the superior choice versus leaving it in a HISA since the offset will give you a guaranteed tax free return which is even higher than a HISA. If you want to help out your daughter buy a home then there is no magic pill solution where you can keep your cash in a savings account AND help her with the deposit. It's one or the other. Wish you all the best.
@@BryanInvest Yes! you are right! Thank you 🙏 I know what to do now
You always give me new ideas , thanks mate . Sandwich 🥪 😅
That's what I'm here for mate! 😎 how's the crop looking this year in your garden?
@BryanInvest Things are going good thanks. Been a bit busy with other things in life. But the garden continues to do its thing 😁
great Video, thanks
Cheers Shannon 👍
Very useful content, thumbs up.... Just a quick suggestion, can you speak slower please, and also the way you deliver is like you are reading news for audience, hopefully you won't mind...
Yes, I'm working on it! 😉
Subscribed to that sandwich. Cheers mate
Welcome to the family! 💙
Great video! (sandwich) .. thanks for laying this all out
Cheers Vincent 🤝
I’m currently looking at debt recycling or just keeping my money in offset since I’m not too confident about the stock market presently. Do you think it’s a good time to invest? (Sandwich)
If you're not ready to invest then keep your money in the offset account. Then continue to learn about the stock market and psychology behind it then you can revisit this strategy when you're feeling more confident.
When you pull 50k from your home loan you will increase your home loan which means you will pay more interest there. That additional spend was not included in your calculation.
Actually you are not increasing your home loan. The example I used is you have a 500k home loan + 50k in offset. Then you split the loan into 2. Loan 1 = 450k. Loan 2 = 50k. Then you use the 50k in your offset that you already have to pay off loan 2 then redraw (borrow).
@@BryanInvest ok, it's crazy if that's legal :)
@@pabichpawel it's absolutely legal. Just need to structure it correctly :)
Hi Bryan, you talk super fast for the information to sink in so it's information overload at high speed that I have to stop and start the video to write everything down. Thanks for all the info, we appreciate you 🙏🏾
Haha, sorry about that. I'm naturally a fast talker. I've been trying to slow it down for the camera so hopefully future videos will be a bit slower. I appreciate your support! Wishing you all the best.
Hi Bryan, just stumbled onto your account and loving it! Question, let's say I split the loan and take out 200k of equity to invest. with the 200k, can I combine that with my existing shares in the same stake account? or does it need to sit in its own account and be separated from my current existing shares? Hopefully that makes sense. thanks Bryan (:
Hi Jiimmy, thanks for the support! Yes, I believe that shouldn’t be a problem as long as you keep the buy confirmations and keep a record if you ever sell any of the ‘older shares. Just make sure you speak with a tax accountant to properly structure the loan in the first place. Good luck 😉
Awesome...thank you Bryan...
SANDWICH :)
Cheers Adam 🥪
If it seems too good to be true, it isn't. This is doesn't work unless you can get a greater return than your home loan interest, and you have to keep your home loan on variable rates to keep 100% of any pay down or offset value (i.e. keeping it on the highest interest rates!!) Paying the money off your home loan directly is 100% RISK FREE and incurs NO TAX.
Yes, I stated all this in the video. Also, you do not need to keep your home loan on a variable rate. It can certainly be done with a fixed rate. It's certainly not for everyone. It's for people who are going to use the money to invest anyway.
You didn’t account for the repayments on the investment as you pushed the dividends to the home loan!
I did mention an interest only loan as the most optimal option.
@@BryanInvest yes even interest only loans require payment of interest which you didn’t account for
Great information ❤
Easy said than done ✅