Who doesn’t charge a fee???
Thanks Clark.
I think this is a great product for those who want to fast tack some savings and don’t want the risk of a margin loan
It’s about reducing fees over the life of your investment. Your right a small player can beat the market some years but not over 50yrs. And I don’t think many individuals managing their own money can do it better over that period.
I see SMSF and Super WRAP style choice products as having a fairly niche target market. And I’m super skeptical it’s the right product for most using them.(I think most useful for perhaps older wealthier individuals with some time on their hands).
And investors in those products are absolutely gouged in fees. Was interesting to hear Clark Griswolds post on LICs as they have been investment vehicles I’ve found interesting outside of super.
Outside of super vs super it’s hard to compare because there are also tax benefits to consider. It may also not have an affect now (depending on your income) but during the pension phase later.
Again I just want to point out, I don’t like generic ‘all things are good’ or ‘all things are bad’. Without knowing each person’s situation or goals it’s silly to use blanket statements like that.
Old work colleague of mine was heavily exposed on margin loans. When the sharemarkets collapsed early days of the GFC, he didn’t worry about his wife or kids. Just headed for North Head in Sydney and off the top he went. Bit of a coward’s way out in my book.
Yeah I didn’t feel comfortable with the risk of a margin call - losing more than you invested can’t be a good feeling.
I really am a massive fan of this product though:
3% interest
70% LVR on most investments
A reasonable selection of ETFs and a lot of Funds
If you were planning on investing in ASX listed ETFs or Australian managed funds and have the capacity to make regular repayments then I think you should be looking at this.
Basically gives you early access to cash to invest at a 3% rate.
So is the difference only that they won’t sell your shares if your LVR drops below a %?
You still have a loan to pay off. You can still lose more than you invested if you fail to pay the loan.
Only no recourse geared fund I can think of are the ones where it’s internalised. Betashares has a few, MLC horizon 7 is one, Perpetual and CFS have a couple of aussie ones off the top of my head.
Beta actually have a good explainer.
Also rate has gone up to 3.75% as the special discounted rate.
Yeah if your LVR dips or you miss a payment you can either contribute more funds or sell holdings to balance back to 70%.
So, like a margin loan.
(I’m nit picking 
)
The product you are using looks good though. Just depends if you have any other loans that are non deductible that you should be paying off rather than principle and interest on this one.
That’s too personal though so I won’t dig further.
Ask your accountant if you are curious.
Not exactly like a margin loan - with a margin loan your calls could be exponential. With an equity loan your potential losses are limited to your investment and repayments.
But in reality the approved investment list is established funds and significant ETFs. It would be hard to see (not impossible) a lose it all situation.
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or fully repay your loans.
Difference between NAB Equity Builder and a traditional margin loan
Unlike a traditional margin loan, NAB Equity Builder:
• Is a principal and interest loan
• You must pay the loan interest, and reduce the loan principal each month
• If a monthly repayment is missed, loan assets may be sold to correct the position or repay the loan
• The loan is designed to be completely repaid in a time frame selected by you (typically: to 10 years)
• The approved investment list is comprised only of investments with inherent diversification
• If existing loan security is removed from the approved list, you must switch it to a valid option
• Movements in the price of your loan security will not trigger the need for any corrective action from you
• Cash advances are only possible if you are ahead of the agreed repayment schedule, and there is sufficient loan security in place
Yep it’s a good product. Westpac I think offered a similar one too for a while. Canstar I think rated it.
P&I is good if you don’t have any other non deductible interest (like a home loan).
Its well structured if you cant be bothered doing it yourself with redraw or an investment loan.
my investment break down… 6% growth even with the crash in 4 years since i started it
Australian Shares (43.21%)
International Shares (37.88%)
Australian Fixed Interest (3.79%)
International Fixed Interest (4.22%)
Australian Property (2.03%)
International Property (2.73%)
Cash (5.55%)
Other (0.55%)
distributed through 3 investemnt groups that i chose can change anytime for any number of groups that are available to me
Neither are shares
need to look at overall market cap and where they exzpect it to go.
i got in at 3.4c and done cap raise
there is currently a cap raise at 7.5c
and they hit 16c early this morning.
lot of hype about the stock in fb groups.
but still might be ok if you can hold if it falls back a bit.
i got in novonix under $1 ands recently hit $4 but has been a topsy turvy ride.
also LKE i looked at 5c and then 20c but thought I had missed boat now they are 60c and latest podcast listened to managing director still thought they were a bargain, as about to get a lot more easier money from o/s investors which will help them grow.
everything lithium going well atm,but who knows when it ends and something else takes off - copper etc.
Interesting concept.
When the music stops, a lot of those cryptos are worthless. Some of them may have substance but things like Dogecoin inter al are purely a castle built on sand.
Shares, Crypto all controlled by bigger players manipulating people’s money.
They are all gambles because you rely on information from people which generally is misinformed ( lies ) for their own personal gain oh and the bigger fish.
PS The music won’t stop for crypto it’s too big now, it’s going to takeover.
Cardano, Ethereum are solid.
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