Single high income earner & tax

[Cobalt5]

Hi, like everyone here I am trying to learn as much as I can so hope I am in the right place .. My question is I am a single high income earner (new job) & I want to make the most of it.

If you were earning $125'000 (Aus) per year (or $1775.50 Net per week), debt free & could save between $800-$1000 per week what would you do (investments etc) to make your money work for you & also to reduce tax's (if you can?), should I salary sucrifice & top up my super to reduce my taxable income or just focus on saving hard for 12mths?
I don't currently own a house or have any such assets as such, but my plan is to save $50'000 in 12mths to be able to buy a house for around the $300-$320'000 range to break into the market for my own piece of the Aussie dream (buying a house). I see doing this as having a nice buffer to not stretching myself to thin etc.. Would I be better off paying off the house or most of it before looking at buying another, while still owning the first house?

I work away for 3 weeks out of 4 so was thinking would I be better off either renting it out fully or renting out 1-2 of the rooms & I live there as well (& get the first home owners grant). Which one would be better for reducing my tax (again if I can at all??), I have even been told to look at setting up a "Family trust" & even "SMSF" with the help of a finanical advisor..

Argggg So much info out there & it gets a little confusing lol

My long term goal is to have a number of investment properties & get set up...


Thanks in advance for any advice/suggestions

[snafu]

Welcome to SA. It's a terrific, safe place to get different points of view.

1st, taxation rules are different in each country and even more confusing is that governments change the taxation rules so it's up to you to keep current on how you are affected. Before jumping into buying a home, you need to run the numbers to determine if it is more expensive or less expensive for you to rent.

Some things to think about... Home buyers have a long list of expenses added to typical mortgage and property tax. I have the impression you see home ownership as an investment without considering for many it is more of an albatross. Americans saw the value of their homes drop like a rock. It resulted in being 'upside down' in their mortgage, they owed far more than their home's value. Lenders were demanding huge catch up to balance loan with value!

Problem #2 is the lack of liquidity. If a career opportunity arose to move to another city, or country, the work, aggro and cost of selling is incredible! If the house doesn't sell in the expected time frame, you're stuck with cost, care and upkeep.

Problem #3 You are home one week of 4! Who does daily maintenance? Renters can trash a home very quickly. Some insurers will disqualify claims from absent owners due to heightened vulnerability.

Examine an amortization table at the price point you expect to buy. The lender preloads interest [lender's profit] so that for the first half of the term you are primarily paying interest - not ownership.
Different countries - different rules. What are the requirements for down payment and mortgage insurance separate from house insurance and content insurance?

[snafu]

Kudos to you for wanting to start out on the right foot.

Part 2: Everyone needs an emergency fund, life happens and things can go wrong. Its important to have at least three months of expenses in an easily accessible liquid form like linked saving account or Money Market a/c.

When I look at the economy in OZ, the figures look good. Only you can assess your RISK tolerance. You need to be able to sleep well without worrying day-to-day about investments. I found it easy to have an automatic Dollar Cost Averaging [DCA] Index Fund with a no fee, low cost Management Expense ratio [MER]. No fee, low cost MER are critically important factors in an Index Fund. It's a great place to start. If your tax laws permit a deduction for Retirement savings check the numbers to see if it's worthwhile to keep growth accumulating tax free until future retirement. Some of us use the tax deduction/tax savings to fund most of the following year contribution.

Different type of investments have different tax consequence relative to your country's laws. We were taught to base investment decisions buy & sell on the investment not on the tax issues. The one exception was retirement savings because our tax penalties and rates are brutal.*

This is a lot to take in at once but decisions you make now will influence future choices.