AKE (ASX) Allkem General Discussion

Originally posted by GCar: ↑

That's actually a very good point, and hopefully a "problem" that many of us have had / will have at some point.

Say for example one owns $1M of AKE stock.
Wants to purchase property for $1M.

Plenty of options...
e.g.
1/ sell some stock to cover the deposit (say $200k), borrow $800k and pay it off by gradual selldown of further stock
2/ sell a bit more stock (for deposit and then some), say $500k total, borrow $500k and pay it off by gradual selldown over time
3/ sell $1M of stock, buy the property outright
4/ wait a bit longer, sell "half" and buy it outright...??!!

Of course, it all depends on your risk appetite, timeframes, borrowing capacity, stock growth expectation etc etc, BUT I would still be very interested in hearing others' views on these (or other) options i.e. pros and cons / considerations etc..

NO, I am NOT asking for financial advice, and any comments/experiences etc will not be taken as such. Post "not advice" to be extra clear and to keep mods happy!

An interesting topic imo!

Cheers

(edit - the above ignores tax but you get the drift!)

Expand

Here's an interesting consideration wrt selling stock to eg fund property purchase....

Selling in one go compared to selling down over multiple financial years...?

Simplified scenario:
Assume $1M of stock
Assume no other income
Assume CGT discount applies

Option A: (outright purchase)
Sell $1M stock in one hit
Assume $800k profit
Pay tax circa $150k
$850k in pocket
(85% in pocket)

Option B: (outright purchase)
Sell stock across 2 financial years
eg. sell $500k stock in June and $500k in July
Assume $800k (2 x $400k) profit as before
Pay tax circa $120k total (2 x $60k/yr)
$880k in pocket; pays for the kitchen renovation lol
(88% in pocket)

Option C: (pay down loan over time)
Sell stock gradually over say 10 years
ie. sell $100k per year
Assume $80k profit per year
Pay tax $40k total (10 x $4k/yr)
$960k in pocket
(96% in pocket)

For option C:
Need to factor inflation effects
Need to factor sp growth over time
Need to factor potential dividends over time
Need to factor interest rate for cost analysis and comparisons... etc

Just some food for thought and NOT ADVICE in any way.

IMO some careful thought + option C (or some variation of) might be a very interesting choice....?

Thoughts?