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Re: [ProgSoc] SSH keys problem (well, no, just way off topic)



It is interesting when you open a email a random stating SSH keys and find yourself in a tax advice column....

Congrates in getting so far from topic....

Chocky

Ps I realise this is a top-post.... but it didn't seem right burying my response at the bottom of jedd fabulous email....


On Sat, 20 May 2006, jedd wrote:

Date: Sat, 20 May 2006 13:36:19 +1000
From: jedd <jedd@xxxxxxxxxxx>
To: progsoc@xxxxxxxxxxx
Subject: Re: [ProgSoc] SSH keys problem

On Saturday 20 May 2006 12:47 pm, Nigel Sheridan-Smith wrote:
] Negative gearing is getting yourself in debt and losing money
] so you save on tax.

Exactly so.  There may be one or two situations in which it makes
(financial) sense to adopt this approach, say if there are highly
specific instances of the law that you wish to take advantage of.
For example, the 'I have to visit the property each year to inspect
it and the costs incurred are a deduction' clause -- very handy if
you buy a cruddy little place somewhere near your yearly holiday
destination.  A couple of years ago a friend was looking at doing
something similar with a place in Canada.  Given property can be
jointly owned by several people, the dollars would have worked out
pleasantly amongst the people involved.  Non-skiers need not apply.

But yes, this society encourages citizens to be in debt, and a lot
of people are under the illusion that if you pay less tax, then you
must inherently be getting more money -- which is clearly not
the case.  However it plays into the emotional response that
people generally have towards taxation, and all of it built on
the foundation that the vast majority of people think there's a
linear correlation between money and happiness.

] Positive gearing is the property paying for itself - the money
] you earn from rent pays for the loan, maintenance, tax, etc,
] and you still take home a bit of money in your pocket.

Again, exactly so.  An accurately identified pos-gearing opportunity
will also result in a decent return (10% pa) on the net worth
of the property, also, just in case a sale is ever contemplated.

(For young players -- one of the key mantras for those investing in
property is 'never sell'.)

There are groups that can provide you reports on these kinds of
opportunities -- they go back over 10-20 years and look at the VG
figures for various parts of the country, as well as figures for
rental availability and average rental income for those areas too,
and come up with some recommendations.  These reports will cost you
a few hundred dollars, but if you're about to spend $100k on one or
more properties, this seems a trivial expense.

Plus it's deductible.  ;)

] This approach doesn't mean buying a
] $500K+ property, but doing the appropriate homework ...

Most of the locations that one of these reports that I saw were
recommending, were in fairly small towns (f.e. Scone, at the top
end of the Hunter), and were priced around $150k and up.  Certainly
there's very few, if any, examples of pos-gearing opportunities in
any of the metropolitan areas along the east coast -- pos-gearing just
can't work in any area with over-inflated real estate prices.

Other homework would include looking at primary production, and
considering long-term factors .. f.e. future reliance on coal, nature
of the mining workforce, that kind of thing.

Of course, most property investors are happily ignoring the fact that
90% of (housing) property in Australia will be under water within
two generations.  Yes, they'll be dead, but between now and then
there'll be a nasty dip in the market as people start to ack this
likelihood, and it's a gamble as to when this will happen.

I always like to end on an upbeat note.

Jedd.

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