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Should my daughter invest in property or stocks?

My daughter is 18 and working full time, earning $34,000 gross per annum. She can’t get a home loan on this salary.

Do you think it is a good idea for her to borrow funds for, say, 12 months to invest in the share market paying interest only, and then see what financial situation she is in after that time? Can you recommend a financial company who can accommodate her?

The goal is a good one, but it is hard to recommend that she borrow to invest into the stock market.

If your daughter wants to buy a home unit, she should create a plan.

Remember, if she wants to rent it out to someone else, she’d receive income and would have tax advantages as well. Perhaps go along to a bank and a mortgage broker to see if this is possible.

Possibly a second job on the weekends could give enough income and tax to make it a goer.

On investing in the stock market, remember if you make 12 per cent a year on average, you’ve done very well. Given you have to pay tax, you then could work out how long it will take to get the money to pull off your property play.

For advice you can trust book a complimentary first appointment with Switzer Financial Services today.

Important information: This content has been prepared without taking account of the objectives, financial situation or needs of any particular individual. It does not constitute formal advice. For this reason, any individual should, before acting, consider the appropriateness of the information, having regard to the individual’s objectives, financial situation and needs and, if necessary, seek appropriate professional advice.

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Published on: Thursday, March 24, 2011

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