Offset Vs. Continue to Invest?

lakes_8 on 18/12/2023 - 20:46

With interest rates in excess of 6% at the moment, are you adding to your offset account or continue to invest?

Can't decide whether I continue buying etf's such as NDQ or add to the mortgage.

What's your current investment strategy?

Financial

Comments

  • Aureus on 18/12/2023 - 20:55
    +2

    Mostly in the offset, some in to very speculative stocks. Hard to know if NDQ will keep pumping.

  • Tee Rex Arms on 18/12/2023 - 20:55
    +2

    Every spare dollar into my offset.

  • mskeggs on 18/12/2023 - 21:00
    +6

    Offset is predictable and tax free.
    You have to beat the offset rate by 15-30% to be ahead, and it isn't like the market is particularly low.

  • JIMB0 on 18/12/2023 - 21:40

    History teaches us that borrowing lots of money and investing it into a broad market index pays off over the longer term. This is assuming you are financially strong enough to ride out the periods when the market is down. If you are not able to ride out the downturns you will likely go bust and lose everything.

    Putting it in the offset is a guarantied 6% tax free return and lets you sleep at night. But that is all it is ever going to be.

    • mskeggs on 18/12/2023 - 21:46

      Yeah, who need sleep!
      There have been chunks of time when history teaches us you go out backwards badly if you are over leveraged, as you note.
      It’s hard to tell if you are about to enter such a period.

      I guess if I had my time again, I would leverage up hard early in life when I had little to lose and time to recover. But it was often hard to get lots of credit as a young person with limited assets (but importantly, it wasn’t always herd!).

  • blocky27 on 18/12/2023 - 22:55
    -1

    Without a deduction 6% makes little sense to invest with. Luckily debt recycling is a thing.

  • mlburnian on 18/12/2023 - 23:48

    My NDQ, HNDQ and FANG etfs have done really well, much better than ASX. This also tells me to not expect much in CY 24.
    I think crypto will be in the headlines again soon….

  • avoidfullprice on 19/12/2023 - 05:31
    +2

    Depends how much mortgage i have left, and remaining timeframe to pay it off

    For example:
    100k - I’ll put some in etf
    1mil - I’ll put all in offset

    Or
    30 yrs - I’ll put all in offset
    10 yrs - I’ll continue to DCA a small portion into etf
    3 yrs - further income largely into etf

    If I’m close to 60, I’ll utilise super for further tax concession

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