3 Factors Affecting the Rule of Two : Part 3 3. Tax Deductions That gives you a tax deduction which you can offset against other income. That tax deduction is not a real expense. It is not a cost to you in that year. If you take...
3 Factors Affecting the Rule of Two : Part 2 2. Cash Returns Another thing referred to here is just a pure cash return. When you start looking at things such as depreciation and you start bringing tax into account, that ratio of basically 1:2 is going...
3 Factors Affecting the Rule of Two : Part 1 1. Borrowings This refers to 100 per cent borrowings being $200,000 borrowed from somewhere, whether it be from another house that you have used as security to borrow the equity against to put into this property, or...
The Rule of Two When you are looking at the ‘rule of two’, what it refers to is: Take the purchase price – for example it is $200,000 – divided by 1000, multiplied by two. That should give your $400 per week. $200,000 / 1000 x 2 =...
The doubling rule of 72 This is just a quick little strategy to help you work out what things could be worth in the future. The ‘rule of 72’ enables you to determine how long it will take for something to double given a fixed growth...
Leverage and Risk When investing, it is important to get the right mix of equity to borrowings – Gearing or Borrowing can be a great friend or similarly it can also be the sword that fatally wounds you. When considering risk factors, things such as age, income...
Compounding Compounding is a product of time, i.e. the multiplying effect of gaining an investment return on your previously earned investment return. That is, interest on your interest. We always recommend that you seek professional advice as this blog is for general information only...
Commodity Trading Commodity trading covers any of a range of markets such as Currencies – Futures – Direct Commodities like cotton, wheat and soya bean and basically anything that has a tradeable market. This type of trading is normally very active and can have very high returns if...
Business As with the other categories, businesses are very diversified and can range from owners buying a job just to maintain their existence, to highly profitable international businesses. They can come in the form of: Wholly owned individual businesses Partnerships Companies – large and small Joint venture...
Property Property is the most understood form of investment as it is tangible – you can walk through it, touch it, alter it, insure it and even demolish it. On the other hand, it can be vandalised, burnt down, flooded or simply neglected. Property comes in...