Can someone tell me if I'm on the right track here ?
I want to start with a 30K portfolio.
5 Blue chip shares with average grossed up yield of 6.89%
Interest on borrowings of 8.87%
Difference approx 2%
2% of 30K is a $600 loss = $11.50 per week.
Actual loss = $6.92 after tax benefits
i.e. it costs $6.92 per week to run a 30K investment in the stock market
n.b for simplicity I have not included borrowing costs as an expense.
Have I missed anything ? Also, some idea of the potential pitfalls, apart from the value of the portfolio not increasing in value and the yields varying from the estimates, would be very much appreciated.
Thanks in advance