Borrowing Additional Money on Home Loan to Purchase Bitcoin. Need Advice

LNyclix on 27/02/2021 - 09:50
Last edited 02/03/2021 - 15:43 by 1 other user

Hi everyone.

Last July I purchased a property off the plan for 530k in Canberra. It's a 3 bedroom 2 bathroom 2 garage seperate title townhouse. I negotiated a few good additions for free ( ducted to entire house as opposed to one aircon unit, caeser stone bench top) which should help add to the value. The house is due for completion in April and house prices seem to have gone up a fair bit in Canberra since then so I'm thinking it could come back evaluated 570-580k.

Now I've been wanting to purchase Bitcoin again for a while. I've been in it previously but I sold at a loss as my mortgage broker said I needed 20% to get pre-approved ( I had around 13%) I didn't want to sell but I did in order to get it. Needless to say it's gone up dramatically since then and I'm kicking myself about it. It's my own fault as I didn't reach out to other banks for their advice which it turns out I'd have been fine on 10-12% and pay LMI.

My question is would it be ridiculous of me to use the equity I have in the home and borrow more from my bank in order to purchase 30-45k of Bitcoin since the bank will loan me 20% of the evaluated value. Interests are incredibly low at the moment and I could see myself getting ahead more by utilising this low loan rate and banking on Bitcoin.

Once I move in I'll receive 25k from the government from their building stimulus scheme which will go towards purchasing some appliances and furniture. I should have around 10k spare.

I'm currently on just under 60k a year, clearing $950 a week after tax. If I proceed as planned borrowing 80% which is 424k my repayments will be around $365 a week on a 3 year fixed term leaving me $585 a week to live on.

If I was to borrow an additional 40k to throw into Bitcoin( 80% of 580k) my repayments would go up to $400 a week, leaving me $550 a week to live on. The house is 7.8 energy stars with 2.2kw solar so I don't imagine my utilities will be too much.

I'm a big believer in Bitcoin and could see it hitting 200k by the end of year. I understand it could also be worth a lot less than it currently is. I'm looking to hold long term.

Is it mad that I even consider borrowing an additional 40k to throw into Bitcoin ? The other two bedrooms would be empty so if I struggled financially I could rent a room out for around $250 to help.

Another option I considered was not borrowing anymore than I needed, renting a room out and paying as much into the mortgage as I could in order to purchase a second property in a year or so. This seems the more sensible route?

I don't see myself getting ahead from working in retail alone so I'm looking at other means to get ahead in life.

I apologize for the long post and appreciate all your replies.

Cheers,

Edit: Thank you to everyone that has replied. I've decided against borrowing any additional money from the bank. I really hadn't thought the idea through and how badly it could turn out. I still believe in Bitcoin and will invest but only a small amount each month that I wouldn't lose sleep over if it went to zero.

Financial Cryptocurrency Home Loan

Comments

    • Nyclix on 27/02/2021 - 10:37

      Starting to get that idea ! Thanks for your reply :)

      • treekangagaroo on 27/02/2021 - 10:42
        +2

        When you hear the so called crypto gurus (A lot of them came back to life from hibernation since Mar 2020 ) talking about institutional investors including papa musk, remember none of them are investing there personal wealth in btc

        • Nyclix on 27/02/2021 - 10:43
          +2

          PayPal accepting Bitcoin as a form of payment in America is a massive sign of real world adoption. I don't generally follow any crypto gurus.

          • treekangagaroo on 27/02/2021 - 10:59

            @Nyclix: PayPal will not allow crypto assets to be withdrawn to external wallets, so essentially once they’re on the platform PayPal can set whatever price it wants (spread and fees if any) for users needing to convert back to fiat. Also there is not govt protection of the money if PayPal goes burst or some one manage to hack them.

            Worth taking the risk ?

            • whooah1979 on 27/02/2021 - 11:17

              @treekangagaroo: PayPal is required to hold enough assets on hand in case their members want to liquidate.

              They either have to hold fiat which is a liability when the market moves up. It makes more sense for them to buy the underlying assets OTC or on the spot market if there is a shortage. This will affect the spot price in a good way.

              • treekangagaroo on 27/02/2021 - 12:05

                @whooah1979: Can you enlighten men on what's considered enough and how much that will be ?

                My understanding is that enough assets as per regulation will be a small % of what they hold and not enough to cover all investors if they go burst as the custodian of bitcoin

                • whooah1979 on 27/02/2021 - 12:51

                  @treekangagaroo: PayPal use Paxos as its custodian. Paxos hodl the digital assets in trusts that are regulated by the NYDFS.

                  The NYDFS is known to have the strictest compliance requirements in the US. They don't play ball and have just issued a USD 18.5m fine to Tether for not being forthcoming with their books.

                  One of the conditions for a licence to operate in NY is that the assets are backed 1:1. That means 1 BTC in the app is 1 BTC in Paxos trust.

  • Meho2026 on 27/02/2021 - 10:41
    +8

    You’re too late
    You’ve missed the boat
    Financial markets are finally starting to wobble
    It’s time to sell not buy

    • Nyclix on 27/02/2021 - 10:42

      Yeah I'm starting to get the idea of just how risky it is lol.

  • graysen on 27/02/2021 - 10:45
    +8

    Wrong place to ask this..

    if you ask people who understand BTC they will say go all in and dont buy property..
    if you ask people who dont understand will call u mad.. clearly the bitcoiners have been winning over a decade.

    If i were in your place, i would look at dollar cost averaging the amount i can afford to lose daily/weekly. I dont think its a bubble. its never too late.
    good luck..

    • Nyclix on 27/02/2021 - 10:46
      +1

      Thanks mate. Do you mean just putting in a small part of my pay each week, as opposed to taking out a loan ?

      • graysen on 27/02/2021 - 10:51
        +6

        yeah.. taking loan made sense when it was low.. its a bit risky now to do it.. although Michael Saylor took a $1B loan and put in bitcoin over 52k. but he is a billionaire. for you i think it could be a highly risky thing to do. just put a small percentage of you salary. it still has long way to go. use exchange like Bitaroo you will get it much cheaper compared to other aussie exchanges.

        Once you buy make sure you hold it atleast 4 years.

        • Nyclix on 27/02/2021 - 10:58

          Think there's anyway I could put $250 a week cash into it without the tax man knowing ?

          • graysen on 27/02/2021 - 11:01
            +1

            @Nyclix: you pay tax when u sell and make profit. if you hold it more than a year you get cgt consession of 50%.

            • Baysew on 27/02/2021 - 12:15

              @graysen: Also, your previous purchase loss can be used to offset your capital gains.

              • Nyclix on 27/02/2021 - 12:55

                @Baysew: That's handy as I've got substantial losses to carry forward so I wouldn't have to worry about paying taxes on gains.

              • deme on 27/02/2021 - 13:10

                @Baysew: Just a note to those reading this as far as I underdtand taxation law there is no expiry for using these losses.

        • deme on 27/02/2021 - 12:22

          Once you buy make sure you hold it atleast 4 years.

          why

          • whooah1979 on 27/02/2021 - 12:59
            +2

            @deme: The halving.

            • deme on 27/02/2021 - 13:06

              @whooah1979: While in the past it's gone up due to halving the block reward, the asymptotic supply is 21 million everyone knows that. I've been under the impression the event is a social catalyst for price increase rather than under lying economic fundimentals.

  • Misplaced on 27/02/2021 - 10:46

    No

  • SydStrand on 27/02/2021 - 11:28
    +4

    I don't see myself getting ahead from working in retail alone so I'm looking at other means to get ahead in life.

    Solve this first. I've spent several years in retail, and according to the 'lifers' (department and store managers), you've pretty much reached the limit of what you'll make in this sector unless you intend to move into corporate, which will need a degree. Retail is a revolving door to a dead end. IMO, seriously consider moving into a job with more potential upward mobility instead of grinding out $60k for the rest of your life, throwing every spare cent into Bitcoin, and praying that it works.

    • Nyclix on 27/02/2021 - 11:34
      +2

      Any idea on who I could talk to about this ? I work 6-2 Monday to Friday so I could study in the afternoons and evenings. I'd definitely like a change.

      • Kangal on 01/03/2021 - 03:02

        It's not too late. No I'm not talking about Bitcoin, but rather I.T. since there's a lot of dinosaurs out there getting ready to retire from their managerial positions, and they're frightened about "computers". So there really is lucrative pay in that field for even newcomers. That is until GenY, who grew up with Home Computer and Internet get older and fill these managerial spots. So these lucrative pay and positions are going to dry up (for newcomers) in the next 10 years.

        Otherwise, ask yourself this: what is a problem for people, and can you find a feasible solution to it, and be able to scale it up. That is the only way to be wealthy, besides dumb-luck or inheritance. I don't consider having a lot of money when you retire as being wealthy, as that is what is expected of you normally.

  • badonde on 27/02/2021 - 11:37

    If you don't need the money in the foreseeable future I don't see the issue.

    I think it's important to follow leads that you have strong conviction on.

    But also - definitely if you do this, dollar cost average. Buy your amount over an extended period so you don't "buy at the peak"
    The average return is muuch higher especially for BTC as it is due a big crash probably by end of the year.

    Long term I do believe it's going easily over 100k - but again this is just a small percent of holdings.

    • Nyclix on 27/02/2021 - 11:43

      Thanks for your reply.

      If I was to rent a room or two out and get cash for the
      andd use the cash to buy BTC is the tax man likely to find out I've been making an income from renting ? Is there anyway to buy BTC with cash ?

  • ihbh on 27/02/2021 - 11:47
    +2

    I'm a big believer in Bitcoin and could see it hitting 200k

    What if it hits 1000 or 100? Would you be okay?

    • Nyclix on 27/02/2021 - 11:51
      -3

      I'd only consider it 40k lost which wouldn't really worry me.

      • deme on 27/02/2021 - 12:05
        +6

        40k lost which wouldn't really worry me.

        If you need a loan for the money you are cooked.

        • Nyclix on 27/02/2021 - 13:36

          I'd be using my own money saved from the deposit but yeah essentially I'm borrowing an additional 40k on the home loan so I suppose it's the same thing.

      • axlfan on 27/02/2021 - 12:32
        +1

        The 40k is not even yours. You are taking it on loan and paying interest right?

      • brendanm on 27/02/2021 - 13:44
        +9

        Losing $40k on $60k a year should bother you.

    • whooah1979 on 27/02/2021 - 11:57

      A -98% discount. People would pile on like 🧟 on 🧠.

  • deme on 27/02/2021 - 12:25
    +2

    Stop OP, you are going to get a colonoscopy from the ATO if you keep this up.
    If you rent out rooms you may lose the CGT exemption on your house.

    • Nyclix on 27/02/2021 - 12:33
      -1

      Keep what up? Asking questions.

      • deme on 27/02/2021 - 12:34
        +3

        https://www.ozbargain.com.au/comment/10145052/redir

        You are asking how to evade tax.
        And
        If you rent out rooms you may lose the CGT exemption on your house.

        • Nyclix on 27/02/2021 - 12:39
          -2

          People avoid paying tax all the time eg trade with for cash etc. Everyone does it. Legally you're right but I personally know a lot of people who rent out rooms for cash and have never had any issues. I guess what I'm asking is that do you think you're likely to get caught by taking cash for a room ?

          If I do it the legitimate way I'd be paying 32.5c on the dollar which means the $250 becomes $168.75 after tax which hardly seems worth it.

          And you're correct with it could affect the CGT exception. It works on a pro rata scheme for the percentage of the house rented out and the duration.

          It just doesn't seem like it's worth while renting a room out if you do it 100% by the books.

          • deme on 27/02/2021 - 12:43
            +2

            @Nyclix: Oh god just stop. I can see when you get slapped with a 120% fine for tax evasion this post is brought up.

            • Nyclix on 27/02/2021 - 12:52

              @deme: Don't think I've broken any laws by simply discussing the possibilities of something.

              • deme on 27/02/2021 - 13:08
                +3

                @Nyclix: You are not discussing hypotheticals.
                You are conspiring to defraud.

                This comment was especially egregious: https://www.ozbargain.com.au/comment/10145262/redir

                • Nyclix on 27/02/2021 - 13:14

                  @deme: Not conspiring anything. Reason I don't think I'll rent anything out is because after paying tax on it it wouldn't be worth my while and I'll just live alone. Unless I decide to rent a room out and avoid paying tax I can't see I've done anything wrong. Conspiring to defraud, lol. I'm sure you've never had a tradie do a cash job for you in your life /s

                  • deme on 27/02/2021 - 13:32
                    +2

                    @Nyclix: You can't post facto absolve yourself of conspiracy.

                    Unless I decide to rent a room out and avoid paying tax I can't see I've done anything wrong.

                    That would be committing tax fraud. What you've done so far is conspiracy.

                    never had a tradie do a cash job for you in your life

                    I use bank transfer for evidence of payment. There is nothing wrong with paying cash. If you conspired with someone to, for example "I'll pay cash knock off the GST" that would be an offence.

                    • Nyclix on 27/02/2021 - 13:35

                      @deme: Fair enough. Thanks for your replies and advice.

          • CrowReally on 27/02/2021 - 21:29
            +4

            @Nyclix: Don't put too much faith in the "well, everyone else does it" line of thinking. Everyone jaywalks, but tell that to the police officer who's writing you a ticket for it and insist they go and issue fines to everyone else instead/first/as well and see how far it gets you.

            The ATO is getting better at Black Economy policing. Someone had an idea to check the bank account details of successful eBay businesses [can't remember their criteria, maybe it was any business doing $10K+ in sales a year] with bank account details of people lodging tax returns and not reporting any business income. Apparently as a followup they then passed the same data onto Centrelink to see if anyone was stupid enough to collect the dole into a bank account while running that same eBay business from that bank account. A human had an idea and a legal team had to figure out how to get the information shared that it needed, but then a computer took 3 seconds to bring down the Hammer of Thor onto some penny-ante deadbeats who never thought they could get caught. That program is still running and I have no doubt the human is coming up with other ideas.

            While I'm being a negative nancy, there's a whole bunch of other things that can go entirely wrong with the "who's to know if I rent a room" thing. For instance, what are you going to put on your home insurance forms? You think the ATO are assholes, wait until you see how insurance companies react if they catch you in a lie. What would happen if your room renter puts your home address on their TFN declaration form when they start a new job and a human at the tax office has an idea to start testing addresses on tax returns versus rental property information?

            Anyway.

            "The legitimate way" would allow you to claim additional deductions in your tax return, don't forget [including some of your mortgage interest]. If you work retail, your union should occasionally arrange to have a finacial planner drop by to your store to "have a chat" about any questions their workers have [or can arrange to put you in contact with one]. That's the person you should be speaking to about these sorts of ideas [the legal ones, I mean].

            • Nyclix on 01/03/2021 - 13:11
              +2

              @CrowReally: Thanks for your reply mate. If I decide to rent out a room I'll do it the proper way and speak to someone beforehand to see the pros and cons to see if it's worth my while.

  • axlfan on 27/02/2021 - 12:30
    +2

    Mate. Bitcoin is a gamble regardless of who says what. It might even go to 10 million dollars next year or all the way back to zero.

    Having said that, invest responsibly in crypto. And the basics are to invest only what you can afford to lose.

    Can you afford to lose that investment really? If so, then go for it.

  • TheBird on 27/02/2021 - 12:37
    +3

    I'm a big believer in Bitcoin and could see it hitting 200k by the end of year. I understand it could also be worth a lot less than it currently is. I'm looking to hold long term.

    I've never understood how these things keep afloat. They only have intrinsic value while people agree to accept it as some form of currency. Those trade dollar things were all the rage decades ago and AFAIK they all went kaput. Long term, I don't see how it could do anything but come to a tradgic end. Currently it's picking up acceptance. What happens when some of that acceptance withdraws?

    • Nyclix on 27/02/2021 - 12:42
      -2

      Couldn't you say the same thing about gold though ?

      • TheBird on 27/02/2021 - 12:42
        +4

        It has uses outside currency, so no. Gold is used in electronics.

        • Geillis on 27/02/2021 - 15:56
          +2

          Also dentistry and medicine.

        • grips on 28/02/2021 - 11:58
          +1

          And in Jewelry and in the Reserves of the Central Banks

    • fsjlkaroiejor on 01/03/2021 - 08:56
      +1

      The intrinsic value argument doesn't apply well in the internet age, imo. There are plenty of valuable things with no intrinsic value. Baseball cards… Art, etc.

      Take the idea of art. Having a Picasso would mean absolutely nothing to me, you couldn't even burn it without stinking up the fireplace. Other than to sell it for cash, I'd prefer not to have it clutter up my house. Yet it undoubtedly has value. Is it rare? Well, Picasso's are, but art in general isn't "rare", anyone can make an "art". So then art must have no value?

      Company valuations are not the sum of the balance sheet + projected future earnings. Facebook at its current price, I think you'd need to hold shares for around 150 years for them to "pay for themselves". Its real value comes from the network effect.

      Bits on a hard drive are absolutely of no value, in isolation. No question at all. However with the network effect, they can have incredible value.

      • TheBird on 01/03/2021 - 14:39

        There are plenty of valuable things with no intrinsic value. Baseball cards… Art, etc.

        It's an interesting point, but it is still vulnerable to the initial question. What happens when some of that acceptance withdraws? That's part of my point. When people decide those things hold no value anymore, like most collectable cards, they become worthless.

        As for company valuations, that's also part of my point. It's why we had the internet bubble. People decided that the DotCom companies that had no instrinsic value then crashed in value.

        Maybe I don't get what you're trying to say?

        Its real value comes from the network effect.

        What do you mean by this?

        • andgucps on 02/03/2021 - 10:19
          +1

          An excellent example of what you describe is postage stamps. For decades people argued that intrinsic value didn't matter because the 'market dictates value' and that the only value that mattered, was what the going price some other person would pay.

          Stamps are nearly worthless now. A lot of collectors were blindsided by it. Their precious thousand dollar collections are worth cents on the dollar.

          This will go for sneakers, pokemon cards, bitcoin, 'rare' digital skins, game accounts, all of the stuff which you can definitively argue has no value. They're speculative assets and the moment there is no demand and there is no speculation then the 'true' value comes out. In the case of stamps, they are little pieces of paper with a bit of art.

          • bman20 on 03/03/2021 - 09:11

            @andgucps: You didnt have the richest person in the world spruiking stamps, you didnt have multi billion dollar companies taking billions of dollars worth of stamps on to their balance sheets, you didnt have the largest banks in the world buying up stamps, you couldnt store a billion dollars worth of stamps on a usb drive, stamps need to be protected from the elements and kept in perfect condition.

            The only reason cash has an 'intrinsic' value is because the government mandates its bills are paid in their own currency, if not for this it is no different to a digital currency.

  • Baysew on 27/02/2021 - 12:45

    The bank may not view this deal with as much enthusiasm you might be hoping for.

    • Nyclix on 27/02/2021 - 12:48

      Already spoke to them and they said a lot of people are doing the same, borrowing additional money from equity in evaluations , not buying crypto but yeah the more I think about it the more I realise it could end up pretty badly in a few years lol.

  • Keplaffintech on 27/02/2021 - 12:47
    +3

    It's your risk to take.

    When you see people starting to take out loans to buy bitcoin, or sell their house to buy bitcoin, then you know there is mania going on. It will eventually crash, it could be at 50k, 100k, 200k, but the last few people to get in are going to lose big time. It's essentially gambling.

    • Nyclix on 27/02/2021 - 12:51

      Thanks for your reply.

  • tomleonhart on 27/02/2021 - 13:08

    That's a ballsy move. The question is, if you were to borrow money and throw it at BTC. Can you sleep at night?

    or is it a better idea to throw it into an ETF or banks stock that pay dividend.

    • Nyclix on 27/02/2021 - 13:16

      I don't think I'll have issues sleeping at night but someone raised a good point that if the interest rates were to go up a bit I'd be in a bit of trouble with repayments in a few years time.

    • whooah1979 on 27/02/2021 - 13:36
      +1

      ETF or banks stock

      ETF is ok. Banks stock is ok if people like to see it go down.

      • netjock on 28/02/2021 - 15:13

        Banks are too big to fail and I would say too big to bail out at some point.

        I don't want to see it but it would be hilarious when Bank fails and government tries to rescue and realises they actually can't afford it. Look at what happened to Iceland. Their banks failed and it literally took the country with it. Yes, it is a small country but just multiply it by 5 and see how big the bank's need to be.

        The UK government ended up with like 80% plus of RBS, they made RBS sell off / wind down the profitable investment bank and 10 years later isn't even close to getting their money back.

  • Sum-Ting Wong on 27/02/2021 - 14:45
    +3

    Don’t discount how much your peace of mind is worth. If you’ve never been in a financial squeeze, and experienced the stress of wondering how you’re going to make your next mortgage payment, then don’t borrow money to invest in a volatile asset such as Bitcoin.

    Number 1 rule of investing: never invest more than you can afford to Do not leverage yourself in order to purchase crypto.

    If you believe in Bitcoin, then rent out a room for board and DCA (dollar cost average) the income weekly into it.

    I recommend you do some reading of r/cryptocurrency and r/Bitcoin on Reddit and learn some better strategies. Besides that, some of the memes on there are quite funny.

    • Nyclix on 27/02/2021 - 14:50

      Thanks for the good advice I think I'll end up doing this. I used to follow then for ages haha

      • deme on 27/02/2021 - 21:02

        Will you self report the rental income or wait for ato to data match?

  • idjces on 27/02/2021 - 22:03

    Generally you want to borrow to "invest" after a crash, or a bear market. Investing borrowed funds at the top never ends well.

    Another good rule of thumb is no more than 1% of your portfolio in crypto. Maybe even 10% if you're feeling particularly risky/knowledgable.

    Some people made more money on GME then you ever could in crypto. A few, very few of them, were smart about their approach.

    If you don't fully understand the risks you are taking, you probably shouldn't be taking them.

    • Trying2SaveABuck on 27/02/2021 - 23:24
      +1

      GME is probably the WORST example of an investment as most people lost money on it becuz all that happen was a bunch of idiots ended up buying it off one an other until the least greedy ones cashed out and left the majority of idiots holding the bag.

      • idjces on 27/02/2021 - 23:54
        +1

        Exactly. Just because something happened to go up a lot, doesn't prove it was a wise investment.

        A few smart ones turned a $50 way out of the money call option into $10,000.

        Most people brought in big after the news attention, with funds they couldn't afford to lose, and lost their shirts

        • Trying2SaveABuck on 28/02/2021 - 00:00

          I think their is a strong argument for crypto - modern monetary policy is a DISASTER waiting to happen it is essentially print as much money that is needed and hope nothing bad happens in the end….

  • Trying2SaveABuck on 27/02/2021 - 23:31

    My 2 cents is this - dont take this is financial advice

    I dont think you should EVER invest more than you're willing to lose.

    I agree with you bitcoin will probably raise in value ( 200k by the end of the year i cant see happening but 100-120k is possible)

    Without reading the comments here most people here will tell you it is a bad idea and to invest in EFTs bla bla - 4-5 % returns make money sensible etc etc all good advice wont get you rich till you got 1 foot in the grave

    I wouldnt bet my house on anything but if the idiotic leaders of the world (esp western nations) keep sliding into socialism and continue printing money to try and prevent short term economic down turn then yes crypto will probably be the future.- Every great empire falls we are witnessing the end of the great western civilisations.

    Take from that what you will but remember whatever you decide to do in life let alone investing your decision is your own - i have broken away from traditional investing because i have opened my eyes to the fact that 'if you do what everyone else is doing than you will be like everyone else' and the fact is you want to be better then everyone else thus you have to do things a bit different.

    I wish you luck if you do take this play ill be rooting for you because it would be another example of our traditional investing advice is so out of touch with how to actually get rich

    • Bargain-er on 28/02/2021 - 09:01
      +1

      I like this advice. I too was a bit sceptical about crypto and in addition didn't believe about property market will be going up. During property market low last year (6-9/2020 based on rea historical data i observed) and banks predicted crash, i decided to wait and see. It costs me 8% premium i had to pay this year. Ouch but that's the price of being speculative from being my home (not investment). Similar to crypto, i bought btc for 12k and was holding but a friend told me it's a bubble and price is controlled by whale (51%) so i sold for small profit. Now, I'm kicking myself at the back too.

      Traditional investing, PE ratio valuation is no longer relevant. That's why Warren Buffet is missing out this time. Investing now is like fashion, whatever the hyoe is. GME, TLS, BTC, is it pump and dump scheme? We would never know.

      The only question i have abt Crypto, i read that every country now is developing digital currency and will change regulations regarding crypto which eventually kill crypto. Is it mostly nonsense?

      My strategy atm for crypto is i invest beer money due to its volatility. I don't really want to lose sleep ;) i chip in a little every pull. Thanks

      • Nyclix on 28/02/2021 - 14:10
        +1

        I like this idea. I've decided I'm not going to borrow any additional money and just put in a little each month. Thanks for your advice.

        • Bargain-er on 28/02/2021 - 14:22

          Np, mate. I think you are wise enough to invest in a house when you are young. All the best to all of us :)

  • Gelato on 28/02/2021 - 01:04

    How are you so sure the valuation will go up in April for an off the plan settlement?

    I’m no expert in Canberra market but I’ve heard a lot of valuations go lower for off the plan purchases.

    • Nyclix on 28/02/2021 - 09:24

      The market value since I bought has gone up around 10% or so in Canberra and when looking at comparable properties selling in the area now they're going for close to 600 and selling. You're right though I might not have much equity in it at all. Won't know until they evaluate it.

      • snooksy on 28/02/2021 - 12:10
        +1

        It can easily go down 10% again next year

  • pdperth on 28/02/2021 - 09:38

    Maybe invest in shares related to Bitcoin, like those involving blockchain. I think blockchain as a technology has a huge future. Seems a safer bet with a bit less hype. You can't really afford to lose this sort of money at your stage in life. Investing a bit every month sounds a great plan as picking the best time is impossible. Never sell anything and you will have no tax worries. Make sure you have a principal place of residence as this is the best tax advantaged investment you can make except for maybe super if you are not to far from retirement.

    • Nyclix on 28/02/2021 - 10:07

      Thankyou for your advice ! I've decided I'm not going to borrow any money and just put a bit of spare money in each month.

    • SBOB on 28/02/2021 - 11:23

      I think blockchain as a technology has a huge future

      Damn it…I went all in on linked list investments

      • netjock on 28/02/2021 - 15:08

        LOL

        Blockchain has a huge future of you are selling storage devices. The ledger just keeps on getting longer with data that is basically people moving coins.

        At least Facebook has your personal data they can sell for a profit. What value is there in the data within the block chain? Probably worth something for law enforcement. It is the digital version of The Panama Papers.

    • Raj09 on 28/02/2021 - 13:35

      Good one. Buy companies which are profiting from bitcoin. Energy companies, chip making, etc

  • MontyMacaw on 28/02/2021 - 10:21
    +1

    No disrespect intended but #IDIOT

    • Nyclix on 28/02/2021 - 10:32
      +1

      Yeah I've realised how badly this could go so I'm not going to borrow any money for it. Just throw a little in each month. Thanks haha

      • MontyMacaw on 28/02/2021 - 11:06

        Sadly I’m speaking from experience. I sold my car in 1987 because everybody said the market will bounce back. It did in the USA but not anywhere else - for decades. There is a huge vortex right now of retail investors throwing money into risky assets that are climbing in value. Everybody makes money in a market like this but when things turn to shit it all gets sucked up by Wall Street because those guys have the resources to ride out any storm and get backing from the federal reserve. Then they buy up the distressed assets the retail investors dumped and make all their money back plus a fortune on top. The game is rigged my friend and if you are not a trained, seasoned, successful trader don’t go play with the sharks because they will eat you up.

        • netjock on 28/02/2021 - 15:06
          +1

          The game is rigged that is why you buy the index. Long term will always go up. Individual stocks are for trading, over the long term even the best have to go through a near death experience. General Electric is a classic case. Formerly a bell weather of US economy and largest company by market cap , they might have a Kodak moment soon.

  • johnwinds on 28/02/2021 - 13:09

    OzB crowd is very conservative and would mostly recommend things like ETFs, real estate (even that they would debate) and (maybe surprisingly to some) going on an overseas trip instead.

    Not the best place to get advice for risky investing (even the word "investment" would be frowned upon here in regards to btc) - unless all you want to hear is "don't touch it with a long pole".

    If you'd ask for my opinion, I would say "that would depend on which price you intend to purchase it". IMHO, the "smart money" has already left the building and we are probably in the "bull trap" phase as can be seen in this graph https://transportgeography.org/contents/chapter3/transportat…

    If you're planning on buying at current prices I would advise against it. If you're planning on buying at sub 10k or even better at sub 5k I would say that would be a well-thought-out idea (not to mention brave, buying during a crash).

    • Nyclix on 28/02/2021 - 14:12

      I've decided I won't borrow any money and just buy a little each month with money I wouldn't be stressed about if it went to zero. Thanks for your advice.

      • johnwinds on 28/02/2021 - 14:15

        That's a solid plan.

        Go even one better and create a YNAB (or similar) category in which you create a btc-investment savings goal for $x per month to ensure you follow through with it and that it fits within your long term budget.

        • Nyclix on 28/02/2021 - 14:20

          I'm going to look at the pros and cons of renting a room or two out to see if it could be a useful way to make additional income.

  • Raj09 on 28/02/2021 - 13:34

    Lots of good points have been made here. I'll put it like this. Bitcoin is not like your ordinary stock purchase. Put whatever you want in bitcoin which you can afford to lose without jeopardising your way of living. If you can afford to lose 40k then go for it. If you cannot, then it's a bad decision and it's a gamble. Your gamble can go really well or go completely wrong.

    • Nyclix on 28/02/2021 - 14:13
      +1

      Great advice. Just going to throw a little in each month :)

  • Keeegs on 28/02/2021 - 13:53
    +1

    Honestly, BTC is too volatile. It doesn't follow conventional investment fundamentals so anything you know about investing is out the window.

    I see crypto as gambling; did I regret not buying it at $6k? Yes, but it's the same regret as not putting it all on black after the ball has landed on wheel.

    If you can't afford to lose it, don't go into crypto.

    • netjock on 28/02/2021 - 15:03

      Obviously they can afford to lose the house

  • Cluster on 28/02/2021 - 13:56

    Go for it. It's your (borrowed) money and house on the line, so if you feel it's a good risk then take it.

    I will add two things to that:

    1. Banks want to know what you're borrowing money for when you extend a loan. You have a choice between being honest and lying. Quite often, and for very good reasons, banks will not extend a loan to invest.

    2. Bitcoin is highly volatile and has crashed 85%+ three times over its history. If it crashed 85% from US$58k, would you be okay?

  • monkeyfood on 28/02/2021 - 14:10

    my uncle said apparently cardano will overtake bitcoin

    • johnwinds on 28/02/2021 - 14:21

      I did a lot of alt trades in the last few years, and my takeaway lesson learned is you're pretty much always better off sticking with btc. When btc goes up, the alts go down (relative to btc) and when it goes down the alts still go down.

      Having said that, I did have a few lucky trades with ripple, doge, vericoin and eth.

      • Nyclix on 28/02/2021 - 14:42

        Amen. Much better just sticking with BTC or atleast a large percentage in BTC 75% or do.

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