Redraw vs offset account - why you need BOTH?

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  • Опубліковано 5 січ 2025

КОМЕНТАРІ • 31

  • @OZRuiShi
    @OZRuiShi  7 місяців тому +7

    Did you find the debt recycling example helpful? Let me know if you want to see a video going into more detail on the topic! 😊👇

    • @mannix601
      @mannix601 7 місяців тому

      Oh yah..

    • @mannix601
      @mannix601 7 місяців тому

      is the that example only applicable for Split loann? I have one scenario though. What if you DONT split the loan?
      Suppose you have a $500,000 home loan, and you put $100,000 into redraw, then remove it and invest it in stocks.
      Does this mean you have created and tax deductable on $100,000 home loan?

    • @OZRuiShi
      @OZRuiShi  7 місяців тому +1

      @@mannix601 Thank you for your question! Splitting the loan first is indeed an important step for debt recycling. In the scenario you described, where you have a $500,000 home loan and you put $100,000 into redraw and then invest it in stocks, the interest on the $100,000 would be tax-deductible.
      However, this creates complications down the track. For instance, if you have $20,000 cash available that you want to use to pay down the loan, you would generally want that to reduce your non-deductible home loan. With a mixed loan, the repayment has to be proportioned according to the purposes. So, in your case, $16,000 would go towards reducing the non-deductible part of the loan and $4,000 towards the deductible part. This makes the process less effective.
      Hope this helps!

  • @walkingtofi
    @walkingtofi 7 місяців тому +3

    Thank you for a well researched and informative video. With great fresh content on Australian based finance, I'm sure you will do well with your platform. I'm personally getting ready for our tax season so keep it coming!

    • @OZRuiShi
      @OZRuiShi  7 місяців тому

      Thank you so much for your kind words! I'm glad you found the video informative. Stay tuned for some tax-related videos before the end of the financial year-just in time for tax season! 😀

  • @mannix601
    @mannix601 7 місяців тому +2

    HI Rui, another spectacular video.. i really enjoy it.. this is mind blowing info.. keep it up

    • @OZRuiShi
      @OZRuiShi  7 місяців тому

      Thank you so much for your kind words! I'm glad that you enjoyed the video. Your support means a lot to me. I'll definitely keep it up! 😊

  • @josesuarez5716
    @josesuarez5716 20 днів тому

    Your videos are clear and super helpfull. thank you very much.

    • @OZRuiShi
      @OZRuiShi  20 днів тому

      Thank you so much! 😊 I’m glad you find the videos clear and helpful-really appreciate your support!

  • @rayfeetrono259
    @rayfeetrono259 7 місяців тому +1

    Ahh. There you go - answered my question!
    From your first video re: offset vs. redraw, I thought the latter didn’t have any advantage over the former at all. Thanks for clarifying, helped me a lot as a new investor myself. Cheers!

    • @OZRuiShi
      @OZRuiShi  7 місяців тому

      Thanks for your comment! I'm glad you watched both videos and found this one to be complementary to 'Redraw Facility Traps.' It's important to me to offer a more balanced view so that everyone gets the full picture. Appreciate your engagement! 😀

  • @peterhatem8844
    @peterhatem8844 Місяць тому

    Hi Rui,
    Congratulations on your presentation on offset vs redraw and subsequently on debt recycling. I have researched for weeks on debt recycling like 50 hours of research and still didn’t quite grasp it. Your video was so clear and simple. Would love to see a further video on debt recycling. how do you do the recycling in the second and third rounds as you earn more funds to invest? In relation to the split accounts you have opened

    • @OZRuiShi
      @OZRuiShi  Місяць тому

      Hi, and thank you so much for your kind words! 😊 I’m really glad to hear that the video helped clarify debt recycling for you. I’m actually planning a video that will go into more detail on debt recycling, including how to handle the second and third rounds as you earn more funds to invest and how to manage split accounts. Stay tuned!

    • @peterhatem8844
      @peterhatem8844 19 годин тому

      Hi Rui,
      Are you planning to launch a video of debt recycling? If delayed, can you give me guidelines on my question above on how to manage split accounts into 2nd and 3rd stage of debt recycling?

  • @jate.photography
    @jate.photography 7 місяців тому +1

    I'm loving the videos! Honestly, you've just blown my mind on Joe 2.0 debt recycling scenario. In short, yes! a more detailed video on this would be amazing. Ive got two questions. (1) What would happen that instead of transferring the redrawed amount to your brokerage account, but then parked it back again in the offset? Would this still work? (2) What if you didn't want to put $300k in the stock market at the same time but dollar cost average lets say with $10k a month over years?

    • @OZRuiShi
      @OZRuiShi  7 місяців тому +1

      Thank you for your questions! I'm glad you're enjoying the videos. Here are the answers to your questions:
      (1) If you park the redrawn amount back into the offset account instead of investing it, it won't work. There needs to be a direct link to an income-producing asset for the redrawn amount to be tax-deductible.
      (2) You can still use a debt recycling strategy while dollar-cost averaging, investing $10k a month over the years. However, it's important to split the loan and ensure the loan split is paid down in one go first . Many people make the mistake of not doing this properly while trying to debt recycle in stages.
      I will do a detailed video about debt recycling to address these points. Stay tuned! 😊

    • @jate.photography
      @jate.photography 6 місяців тому

      @@OZRuiShi Thanks Rui. This would be great. In your detailed video, can you please also include a slightly more complex but realistic example where the PPOR (that will be paid down and split off) is a joint loan (like husband and wife). And what happens if only one person (Eg. the husband) wanted to pay down the loan, take on the debt recycling for investing in shares / property, but not disturb the wife's finances (ie. keep her's separately). How does that impact taxes, super, etc .etc.

  • @MindsettoMastery
    @MindsettoMastery 7 місяців тому +1

    great video! please make another on debt recycling!

    • @OZRuiShi
      @OZRuiShi  7 місяців тому

      Thank you! I'm glad you enjoyed the video. Another one on debt recycling is in the pipeline. Stay tuned! 😊

  • @ChiPhi-x1x
    @ChiPhi-x1x 26 днів тому

    Hi Rui. I got a new offset account 400k using my existing rental as a security. I used this 400k to pay for my personal house. I know it is not tax deductible (as for personal use). If after 1 year, I got 400k saving to offsetting this account. then i use to spend on my rentals. Is this new portion now tax deductible? Thanks

  • @danielguo1033
    @danielguo1033 5 місяців тому +1

    I am planning for my retirement, I would like to ask you a question, I currently have both accounts for my home loan. Currently I have all my money (approximately $300k) in my offset account to hedge interest, if I moved the $300k out of my offset account and parked it in a redraw account at my primary residence , then it will pay off all owner-occupied loans. But if I did that, I would have $300,000 in my home loan account (redraw fund). Can you tell me if the $300,000 in my home loan redraw account is subject to the age pension asset test? Thanks

    • @OZRuiShi
      @OZRuiShi  5 місяців тому

      Thank you for your question! Generally, money in a home loan redraw account is not subject to the age pension asset test, whereas money in an offset account is considered an asset for the age pension asset test. Hope this helps. 😊

    • @danielguo1033
      @danielguo1033 5 місяців тому

      @@OZRuiShi Thanks very much. Yes that’s helps a lot 🙏

  • @peterhatem8844
    @peterhatem8844 Місяць тому

    Very nice video

    • @OZRuiShi
      @OZRuiShi  Місяць тому

      Thank you. I am glad you enjoyed it! 😊

  • @sebmonti5904
    @sebmonti5904 7 місяців тому +1

    Good job 👍 very useful

    • @OZRuiShi
      @OZRuiShi  7 місяців тому

      Thanks so much! I'm glad you found it useful. 😊

  • @SamSam-hn4qe
    @SamSam-hn4qe 4 місяці тому

    Hi Rui
    Can u please explain the new unrealised capital gains tax incoming July 1 2025
    PLEASE HELP WITH THIS

    • @OZRuiShi
      @OZRuiShi  4 місяці тому

      Hi there. Thanks for your question. Are you referring to the division 296 tax on superannuation over $3 million? 😊

    • @SamSam-hn4qe
      @SamSam-hn4qe 4 місяці тому

      @@OZRuiShi Hi Rui, yes does this include trusts ? This can destroy wealth passed down ??