The REAL answer to the Property vs Shares debate....
Hi?there,
?
Property or stocks?
?
The age-old question that comes up time and time again.
?
Which is the better to invest in?
?
Typically the answer is not a crowd favourite.
?
Maybe after I explain each?you’ll understand what I mean.
?
Let’s do a little side-by-side before I give you the answer.
?
?
When comparing the 2 asset classes, you have to assess them in a number of different metrics.
?
When it comes to income, property can be great if you have a great tenant.
?
But if this tenant leaves or doesn’t pay their rent on time, this obviously can impact how reliable the income is.
?
Whereas shares typically have a better yield and are more reliable due to dividends and franking credits.
?
Similarly, shares are a more cost-effective option as all you are really paying is the brokerage fees.
?
Property is far less forgiving in the cost department.
?
Think council rates, repairs, land tax, agent fees, etc.
?
?
When it comes to debt, you can use leverage with the banks to buy property.
?
Getting a loan for shares purposes is typically a little more difficult.
?
You can diversify shares quite easily through things like ETFs with very little upfront money.
?
As little as $5 really!
?
Buying a bunch of different properties?
?
Well, it’s expensive. No secret there, folks.
?
But both of these methods of investing can be great for tax benefits.
?
Franking credits are great here for the shares department, and property has a lot of tax-deductible expenses.
?
If you’re on a high marginal tax rate and getting sick of the ongoing tax that comes with it, franking credits are going to be your best friend.
?
Typically, these credits will offset any tax you owe the ATO (or most of it) that comes from the extra passive income you get from your investments.
领英推荐
?
Effectively, franking credits are tax already paid by the company that pays you the dividend, passing that tax payable money onto you.
?
So, not only do you get the income, but you also get the tax credit. Win-win!
?
?
So, who is the winner?
?
What should you pick?
?
Drum roll, please!
?
Ultimately, a good portfolio will always have both.
?
(Told you that not everyone loves the answer…)
?
It’s more about what will you focus on first, depending on your personal situation and goals.
?
Property can be tougher to get in compared to shares, but everyone’s plan is different.
?
(Which is why working with an expert to map out a plan and goals is a great idea!)
?
So, what are your goals this year? How are you splitting your focus this year on each asset class?
?
You should book a 15-minute chat and let me know in person. By clicking the link at the end of the email.
?
(A shameless plug…*cough cough*)
?
Until next time.
?
Steve.
--------------------------------------------------------------------------------------------------------
PS: Whenever you're ready,?there are three ways I can help you…
1.?Did you know that every year, Australians are paying?their bank thousands of dollars more than?they need to on?their mortgage? Many folks don’t realise?they’re sitting on home loans year after year that are not?the?best fit for?their situation.?
If you want to know if this might be you, book a free 15-min call with our mortgage broker Eddie and he can make sure you’ve got?the?best loan for your situation
?
2.?Also, if you haven’t seen?the?latest video trainings our team has done on:
You can find all 6 videos here:?
?
3.?And if you ever want to get some 1:1 help with your personal finances, we can jump on?the?phone or on Teams for a quick clarity call and find out where you are right now, where you want to be with your money and lifestyle, and if we can help or not.?
We can?then make a roadmap for?the?next best step for you to take to get closer to your financial independence.
?
General advice disclaimer:?The?information contained within this post is general in nature and does not take into account your personal circumstances. Please reach out if you wish to discuss your personal situation.