Busy day
...he says, after spending most of it trawling lazily through the Internet.
I did get a call back from the finance guys. They've unearthed an interesting loan structure which involves us buying an investment property, paying effectively zilch for the property and the subsequent several years' interest payments, and walking away at the end of it with about two million bucks. One and a half mil if neither of us want to work during those years.
I said I'd have to think about it :P
And yep, this does involve some interesting interpretations of various numbers. Ever realised that if you declare yourself to be a property investor (by saying "I am a property investor" out loud, apparently, regardless of if you have another job), the annual increase in value in any properties you own could be considered to be income, purely because when (and if) the property is ever sold, the tax office will want its share?
(Note that this is kind of deferred income, so the Tax Office will not be sending around the heavies to ask for their cut just because you say you're into property.)
So instead of our income being whatever some contracting company is willing to pay us, the right accountant can declare it to be the amount by which our house went up in value in the last year.
Did I mention that we just went through a major property boom? Enough so that our equity boost was more than ten times what we were taking home from our 9-5 jobs?
But if the Tax Office doesn't care, and we don't see any actual dollars in our hands, what's the point, you ask?
Ah. Now this is where the story really starts.
In order to make money by investing, you (generally) have to invest. In order to invest, you need startup money to buy whatever it is you're investing in. If you have no money of your own, you need to borrow someone else's.
Banks are MUCH more likely to loan this kind of money to people who have an accountant's letter saying their income has an extra zero on the end. Thus leading to the kind of bizarre scenarios where you have dedicated finance professionals calling up asking if you would like to be (effectively) paid over a million bucks plus all living expenses just to patronise this or that bank for a couple of years.
I'm not even sure what I should be feeling, apart from "I'm sure there's a hitch somewhere."
I did get a call back from the finance guys. They've unearthed an interesting loan structure which involves us buying an investment property, paying effectively zilch for the property and the subsequent several years' interest payments, and walking away at the end of it with about two million bucks. One and a half mil if neither of us want to work during those years.
I said I'd have to think about it :P
And yep, this does involve some interesting interpretations of various numbers. Ever realised that if you declare yourself to be a property investor (by saying "I am a property investor" out loud, apparently, regardless of if you have another job), the annual increase in value in any properties you own could be considered to be income, purely because when (and if) the property is ever sold, the tax office will want its share?
(Note that this is kind of deferred income, so the Tax Office will not be sending around the heavies to ask for their cut just because you say you're into property.)
So instead of our income being whatever some contracting company is willing to pay us, the right accountant can declare it to be the amount by which our house went up in value in the last year.
Did I mention that we just went through a major property boom? Enough so that our equity boost was more than ten times what we were taking home from our 9-5 jobs?
But if the Tax Office doesn't care, and we don't see any actual dollars in our hands, what's the point, you ask?
Ah. Now this is where the story really starts.
In order to make money by investing, you (generally) have to invest. In order to invest, you need startup money to buy whatever it is you're investing in. If you have no money of your own, you need to borrow someone else's.
Banks are MUCH more likely to loan this kind of money to people who have an accountant's letter saying their income has an extra zero on the end. Thus leading to the kind of bizarre scenarios where you have dedicated finance professionals calling up asking if you would like to be (effectively) paid over a million bucks plus all living expenses just to patronise this or that bank for a couple of years.
I'm not even sure what I should be feeling, apart from "I'm sure there's a hitch somewhere."