It's such a good idea. I can lose $3. The ATO will give me $1 back. Net loss $2. How smart am I? If I can't make a return when interest rates are all the way down here, what hope do I have when rates go back to 8%?
My parents thought they were clever. Bought a property in Brisbane years ago. Boasted about how good negative gearing was and how much they were saving in tax. Only one problem, it wasn't negatively geared. The property had an extra building rented out separately, so it was in fact positively geared. They thought a big tax refund was coming, instead got a big tax bill. But at least they weren't losing money on the deal.
An "asset" is something that produces an income. A "liability" is something that requires you to pay expenses.
