buying a expensive boat

[Tonyzee]

If you want a really big boat, setup a Company, run a charter boat business and then you will have the asset in the company name, and all the deductable expenses, loan repayments, fuel, tackle and supplies all legitimate business expenses.

You may only do 20 charters a year, or if it goes pear shaped your house is still protected. Tax Department so shifty.

[ducky]

Ducky ...you just make a simple concept way too complicated bro

Like you said, discipline is needed otherwise don't bother with any loan - especially something as large as a home loan.

Assuming everything else equals, it is DEFINITELY cheaper to use your home loan redraw facility (if available) than to take out a personal loan to finance luxury things in life whether it be the Bar Crusher or the next Mustang. This is evidence by your contradicting example above with respect to your initial position of cheaper using a personal loan - even when your example assume that you will pay the extra $25K over the life of the loan (25 years).

Don't have the exact calculations for you but I guarantee you will save heaps more if you redraw 25K from the home loan and then pay $2881 (combined monthly payment for 400K home loan and 25K personal loan) for the first 5 years -effectively paying off the extra loan for your boat at the lower iinterest of your home loan. But where you will benefit most is the difference between the extra $543 repayment and the 5% interest rate portion be considered as capital repayment and will effectively reduces your loan balance and of course in turn reduces the interest on your loan for for future interest calculations. This is why a line of credit is a great product, especially if you're disciplined.

Will happy to take a wager on your boat that using a home loan redraw will be cheaper than taking out a personal loan or boat loan for that matter ... juat kidding only bro ... will be happy to explain more Finance 101 to you if you take me out on your boat to your secret gummy spot in WP ... promise I will not tell Nude Up ... the bugger has so many secret spots already :icon_lolz:

Still reckon the best way to get my Bar Crusher is if the lucky numbers comes up

I must admit I am on nightshift currently so my brain is a bit mushy.

It may have been cheaper to take out a redraw on the homeloan but I didn't have that as an option. (Locked in for 3 years) my boat was $13k. The difference between 5% and 11% is about $1700 over the 5 years if you don't look at the bigger picture. A small price to pay considering there wasn't an alternative. I have been putting money into renovations rather than extra on the loans however that will change in 2-3 years when my wife is back at work (stay at home mum, 2 kids) we'll be smashing out the mortgage at that point.

Interesting topic anyway.

[ducky]

If you want a really big boat, setup a Company, run a charter boat business and then you will have the asset in the company name, and all the deductable expenses, loan repayments, fuel, tackle and supplies all legitimate business expenses.

You may only do 20 charters a year, or if it goes pear shaped your house is still protected. Tax Department so shifty.

I don't know much about this topic but I'm pretty certain the individual is still liable should the business declare bankruptcy? Only time I have seen someone go bust and not lose anything he had all assets held in a discretionary trust including his house. ATO couldn't seize anything.

[canned_tuna]

You only live once and its only money so who cares :super: buy the boat that you want and dont worry about it!Enjoy life while you can

[Scraglor]

If you want a really big boat, setup a Company, run a charter boat business and then you will have the asset in the company name, and all the deductable expenses, loan repayments, fuel, tackle and supplies all legitimate business expenses.

You may only do 20 charters a year, or if it goes pear shaped your house is still protected. Tax Department so shifty.

I don't know much about this topic but I'm pretty certain the individual is still liable should the business declare bankruptcy? Only time I have seen someone go bust and not lose anything he had all assets held in a discretionary trust including his house. ATO couldn't seize anything.

Sole Traders / Partnerships, the owners are still liable for buisness debt. Once you incorporate a buisness and form a company, that company becomes its own legal entity, seperate from its shareholders. Basically you incorporate a small buisness to protect yourself from liabilities that the buisness might incur. If you operate as a sole trader/partnership, you can still lose everything if it goes sour.

Incorporated companies are more expensive to set up, and have a lot more legal requirements in regards to financial reporting, etc, etc. As far as I can remember from when I was at uni, (I did a buisness degree, majoring in accounting and commercial law - but this was about 8 years ago now so the memory is a little fuzzy) a director of a company is still personally liable for outstanding wages and super, but can basically put the company into voluntary administration and walk away from most other debt and let the liquidators sort out the mess. Quite often they then go on to start up a new company and do the whole thing again.

Again, I cant really remember the ins and outs, so I might be totally wrong, but I dont really think setting up a buisness purely to buy a boat will work out as the best option, but who knows.

[Scraglor]

You only live once and its only money so who cares :super: buy the boat that you want and dont worry about it!Enjoy life while you can

this :thumbsup: :thumbsup: