Looking to tap into home equity to invest in shares

2021.10.24 09:07 FIREfiend99 Looking to tap into home equity to invest in shares

Hey FI Team,
Just wanted to gauge some thoughts or ideas on a strategy we're considering. We're looking to tap into our home equity to invest in the share market.
Context / Situation
We focused heavily on our mortgage in the years before discovering FI and with the crazy property market in our area have a lot of paper equity tied up in our PPOR (close to 7 figures). Didn't know about debt recycling at the time.
As we neared paying it off we discovered FI and since have been building up a separate share portfolio with the improved cash flow. Slow and steady and going well to date.
Although we were initially debt averse now that we have a better understanding that not all debt is bad we're considering put some of that equity to more productive uses. Essentially we'd prefer a lot of it to be in the share market producing passive income.
Not looking to retire for another 10 years or so. Targeting somewhere between a 1.5-2.5m share portfolio in total. $60k p/a would probably be the minimum I'm comfortable with.
Approach
Take advantage of low interest rates to take on some additional risk and refinance to use some of that equity to invest in shares instead.
It looks like we can get a fixed interest rate for the investment split with the following options 2year - 2.24, 3y - 2.34, 4 or 5y 2.64% (if using LVR 75, maybe slightly cheaper if we have a lower LVR). We could also leave it as VBR currently at 2.49% but for this situation i think i like the fixed option for certainty for a few years.
Although I normally subscribe to a total market approach and have been keeping our Aussie share portion around 20% I'm actually leaning towards focusing on Aussie Shares for the higher yield as it may be possible to positive gear the interest portion while interest rates remain low and franking credits should help minimise tax. I was thinking something like A200 for super low fees or even some of the old school LICs for the dividend smoothing aspects.
We already have separate investments each in VAS but I'm not sure yet if it'd be easier to just create a joint brokerage account for this investment loan to keep everything separate and better help with a paper trail for the ATO.
If the distributions/dividends drop or don't cover the loan in the future if interest rates rise we'd have to cover the difference.
Depending on how much we want to take on I was thinking of an LVR of between 25-75% (250-750k borrowed).
As an estimate 700k Aus shares could yield about $28k (4%) with interest of about $18.5k (2.64%) p/a. Tax would be owing on it but if a large part is franked this might only ending up being $1k or so?
I don't want to get greedy but we're a DINK high income household (~$260k - 140/120 split) so I believe serviceability should be fine and could get the snowball happening a bit quicker.
It would greatly overweight our portfolio at the moment doing it this way but i'm looking at it in the context of front loading our Aussie shares upfront and slowly over the next 5-10 years bringing the international shares back into line. I'd be ok with a 20-50% split of Aussie to international shares (and a roughly 50/50 of AUD/international currency).
Issues / Risks / Mitigation's
Uses the house as collateral which we've already effectively paid off (kept the mortgage offsetted as an emergency fund).
Housing market slump - paper loss as the loan could be worth more the property if it was significant. Keeping LVR below 75% should help.
Share market downturn - paper loss on capital value of the shares - not intending to sell these for a long time if ever. I figure these will cover a large chunk of our passive income eventually, bolstered by international distributions and selling shares eventually if needed. Distributions might reduce but a portion will still come through.
Interest rates may rise after the fixed period - this could turn it into a negative gearing situation but distributions from Aussie shares over the long period should help cover a good chunk of it for next 5 years or so.
Job loss - a single wage could cover repayments even without distributions helping. Plus have additional mitigation's such as income protection, decent amounts of sick, annual and long service leave. Have separate international investments we could see in a pinch if it really came down to it as well as stopping nice to have's like super salary sacrificing.
Psychological factor of getting back into debt again - mitigation - realising the money potentially might be more productive for us.
If we go with any fixed option can only make an extra $20k repayments over the fixed term so can't eat into the loan to much but will let us keep investing elsewhere. Likely re-assess in 3-5 years and work out if we re-fix or start aggressively paying it down on the current VBR in the years before retiring.
Tax efficiency - not as good as delaying CGT but i think the franking credits should help.
Other Options
Looked at NAB equity builder and product looks great but i think the interest rates didn't seem as good as what we can get (albeit using our house as collateral which you don't have to with EB).
Line of credit - didn't look much at this but interest rates seemed higher
Thoughts?
I don't think we're being unrealistic or overly aggressive for our situation but are we crazy for getting back into debt again while it's so cheap? Have we totally overlooked something significant?
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2021.10.24 09:07 MurkyLobster Are Hermits still a thing and can you become one?

First off, I'm not a confirmed catholic but have been baptised. Hopefully I'll be able to go through the process and be confirmed this Easter, God willing. I've recently started to attend mass again every Sunday, but I struggle. Not with the mass itself, but with the congregation. I'm aware this is likely a personal failing on my part, but I really struggle focusing on the mass itself.
I like to get to mass early so i can quietly pray and focus myself to worship God, but all around me people are chatting and gossiping and honestly at times it feels like a social club.
Today a woman came in late with a baby and sat next to me. Throughout the entire mass the baby was playing with and dropping toys, eating those puffed carrot snack things that are super crunchy, playing with the tape blocking off pews to help with covid distancing. I really struggled to focus on the readings and the gospel and did not feel connected to God or any of the awe
I also don't enjoy the hymns. Most people just mumble along but there's one woman who signs like she's auditioning for a talent show, and also prays really loudly.
I know im probably coming off as a complete grouch and don't be shy in telling me so, and the likely solution is to just try and get over it. But I came away from mass today feeling so deflated and disconnected.
But also try and understand I'm a very solitary person. I feel closest to God and happiest when I'm quietly praying the rosary and contemplating the mysteries, or pursuing my own informal studies into the faith. Or just in private prayer. I want to go to church to be in the presence of our Lord and offer him my reverence but it feels more of a social club. I should also mention I've not been going to this church for long.
Since I was a kid in school, I've always felt a respect to monks living in quiet contemplating. And I feel a calling to the ermetic life. But are Hermits a thing of the past?
Be honest but please be kind. Is this something I just need to get over and to just accept, or is it maybe the church? I'm not coming away from mass with that deep sense of Peace I get when I pray on my own.
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2021.10.24 09:07 winder30 I KNOW I have social anxiety. How to convince a significant other who is convinced I have autism?

Bit of a strange situation… I’m married to a pre-registration doctor with very bad contamination OCD. She basically cancels everything I say or do by stating that I’m unable to think logically and that I have autism, with far worse words but to that effect. In front of our kids too… I’m 100% certain I don’t; not that there’s anything terrible about having such a condition, but just get sneers and rolling of eyes if I defend myself.
Her reasoning - I’m an entrepreneur, so don’t get a ‘normal’ job, so must be of low intelligence or something. I sometimes have hobbies where I collect things (part of the fun of learning something new for me, but I always make sure I buy cheap so I can sell expensive when / if I lose interest) and that I’m sometimes awful in social situations. She used to have trouble understanding why this was, and why I wasn’t like that all the time…
I used to be terrified of school assemblies when I was a kid, never knowing where to look because I was sure everyone was judging me. I’d agonise over little conversations and things that had happened during the day. I was extremely averse to public speaking. Sometimes it was fine, other times I’d basically collapse. I’m a bit better at it now but I’ll worry for weeks before if I have something like that coming up. I hate phone calls, which I find really tiring for some reason. At parties, I’d sometimes get really shy for no particular reason and barely be able to lift my head. Other times I’d be fine. I crossed the road to avoid people (pre-covid!) All the classic social anxiety symptoms, I guess!
So, I don’t really want to leave my wife. This respect issue is obviously bothering me a lot and I’m trying to find a way past it. She sometimes pushes to try and get me diagnosed as autistic (“go see a doctor, but I’ll need to be in the room to tell the truth about you”), which won’t be happening. I don’t trust her pet doctors / colleagues and I’m not going to put myself into some potential trap in case it turns out she has other future plans. A few days ago she said she took advice on how to live with someone like me; which I find hilarious considering how she’ll totally melt down if I don’t wash hands at the right time, or throw away good new food because she thinks it’s contaminated, or runs the washing machine 10 times in a row, or has the heating at 30+ degrees… I’m easy going and I think helpful in general, looking after kids etc while she studies cloistered until 3AM every day, plus I’m running a software development team and handling the architecture on a major project. I do a lot more besides that too.
Does anyone have any advice on how I can convince this person that I have social anxiety and not a form of autism?
Sorry for the intensive read!
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