media trying to pump the property market, page-68

Please go on. I await your explanation.

Anyway, I did some quick calcs. If Man X can afford $200 per week to service a loan that is $10,400 pa. If has borrowed the money to invest in the share market and is allowed a tax deduction for the interest payable how much can he borrow?

Assuming he is on $80,000 pa how much can he borrow to be costing himself $200 pw allowing for the tax benefit? Doing a rough calculation I get about $170,000 in shares. If we have dividends then that will affect things, what should we allow for dividends? What effect has that got on how much he can invest?

A property which will cost the guy $200 will (after all is said and done) will probably cost about $420,000 at purchase. These are very rough figures but I am trying to be as fair as I can.

So at time t=0 the guy starts with either a $420,000 property or a share portfolio of more than $170,000 if we allow for dividends. Let's say the share portfolio is $220,000 is that fair enough?

Ok so now we look at your pdf.

10 years shares were 10.6% pa and for the same individual property was 8.8% according to your document.

After 10 years the house is worth $976,199

After 10 years the share portfolio is worth $602,523

This is not allowing for rent rises or dividends or any of the other myriad of things we need to look out for.

Still it illustrates what the scale of the investment means to an individual.