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Which is why better late than never I am overpaying into pension and chucking that on a far/wide international index. My calcs say I won’t retire rich but I wil

Which is why better late than never I am overpaying into pension and chucking that on a far/wide international index. My calcs say I won’t retire rich but I will still most likely have the money and beat inflation. And not spend it lol! The real issue for the average Jo seeking alpha is you often need to pay the house (your government!) for the privilege. In Australia you trigger capital gains tax when you sell. And if you buy and sell alot they may audit you and consider it income from professional trading!

reedf1 3y ago
You are probably not finding alpha as a retail investor - probably just some form of beta.
- quickthrower2 3y ago
  Yes - what I am saying is I prefer my E(X) of beta over maybe-alpha minus additional taxes. (Assuming you meant indexes = beta... ?)
golemiprague 3y ago
The problem in Australia is that they still tax you if you rent your house to someone and then use the money to rent for yourself. So if you need to move or change house size you must sell and buy. However if you buy an investment house you can get tax deduction on the interest of the mortgage. They basically tax people with one house but give deductions to people with multiple houses.
- quickthrower2 3y ago
  Yes. I think that is silly as they should encourage freedom to move. You should just get taxed on the “profit” you make if you find somewhere cheaper to rent than what you get. The workaround is buy to rent out a property you never live in then just rent and move around as normal. But then you lose out on the primary residence capital gains exemption. A work around to that is to never sell and use the death trust to pass that on to your kids. All this stuff takes a lot of planning and thinking about. Another weird thing: transfer your house to your spouse and pay stamp duty! Stamp duty itself is regressive and should be replaced by a smaller annual property tax or just another form of tax (but given that property ownership tends to create wealth inequality probably good to tax ownership rather than add more income tax)

reedf1 3y ago

You are probably not finding alpha as a retail investor - probably just some form of beta.

quickthrower2 3y ago
Yes - what I am saying is I prefer my E(X) of beta over maybe-alpha minus additional taxes. (Assuming you meant indexes = beta... ?)

golemiprague 3y ago

The problem in Australia is that they still tax you if you rent your house to someone and then use the money to rent for yourself. So if you need to move or change house size you must sell and buy. However if you buy an investment house you can get tax deduction on the interest of the mortgage. They basically tax people with one house but give deductions to people with multiple houses.

quickthrower2 3y ago
Yes. I think that is silly as they should encourage freedom to move. You should just get taxed on the “profit” you make if you find somewhere cheaper to rent than what you get. The workaround is buy to rent out a property you never live in then just rent and move around as normal. But then you lose out on the primary residence capital gains exemption. A work around to that is to never sell and use the death trust to pass that on to your kids. All this stuff takes a lot of planning and thinking about. Another weird thing: transfer your house to your spouse and pay stamp duty! Stamp duty itself is regressive and should be replaced by a smaller annual property tax or just another form of tax (but given that property ownership tends to create wealth inequality probably good to tax ownership rather than add more income tax)