Step 1 Typical Client

The first step is to buy an investment property for these reasons

  1. It will cause you to pay much less tax.
  2. It will help you get rid of the non-deductible home loan faster.
  3. It goes up in value over time.
  4. Costs nothing out of your own pocket.

The investment property gives two sources of income in this case. The clear rent ($1584/ month after agents fees) and the tax saving ($653/ month – this is real money you get to keep in your pocket each pay day).

It’s madness in business to ever apply any money to tax deductible investment loans while you still have a non deductible home loan. All possible funds should go towards the home loan until it’s paid off in full, meanwhile making no payment on the investment loan.
Step 1 Typical Client
There is now 3 sources of income at our disposal. The money we now have at our disposal is:

PREVIOUS HOME PAYMENT $2027/ month
CLEAR RENT $1584/ month
TAX SAVING $653/ month
TOTAL $4264/ month

 

If you now pay the whole $4264/ month off the home loan, it will be paid off in 5 years and 2 months instead of 20 years. But it never goes this slow because of step 2 (see next).

This is done without putting more out of your pocket than your present home loan payment

Using our system, it should be unnecessary to even contribute the old $2027/ month payment after a few years.

WHAT’S STEP 2?