Reinvesting vs Withdrawing Income

Reinvesting vs Withdrawing Income: What Should You Consider?

Mortgage funds like TierONE Capital offer investors regular income from interest earned on secured, first-mortgage loans. Once income is distributed, or when capital is repaid from a loan, investors have three flexible options:

• reinvest into new mortgage opportunities;
• withdraw income or capital; or
• hold funds in a high-interest, low-risk account while deciding what to do next.

Below we outline the advantages of each approach, and how TierONE Capital’s flexible investment structure helps you stay in control of your capital at every stage.

Reinvesting: Build Wealth Through Compounding Returns

Reinvesting income and repaid capital can significantly accelerate wealth creation by compounding your returns. Instead of withdrawing income, reinvested funds continue earning and produce a larger income base each month.

Benefits:

• maximises long-term capital growth;
• no downtime between investments; and
• suitable for investors in growth phase or SMSFs seeking compounding returns.

Withdrawing: Consistent Income When You Need It

If you rely on your investments to support your lifestyle or retirement, withdrawing monthly income is a simple and effective strategy.

Benefits:

• delivers reliable, regular income;
• ideal for investors in pension phase or those seeking passive cash flow; and
• frees up capital for alternative uses or diversification.

TierONE Capital Cash Unit Account: Secure, Liquid, and Earning Interest

For investors who want to keep funds liquid while still earning interest, TierONE Capital offers a Cash Unit Account, a unique feature not available in most mortgage funds.

Key features:

• funds are invested in a major Australian bank’s Cash Management Account;
• earn a competitive 3.6% p.a. (paid monthly in arrears);
• no fees to invest or withdraw; and
• perfect for holding:
  • income distributions not yet reinvested
  • repaid capital awaiting redeployment; and
  • capital set aside for short-term needs.

This allows you to stay investment-ready while still generating meaningful returns without taking on additional risk.

Combine Strategies: Reinvest, Withdraw, and Stay Flexible

Many TierONE Capital investors blend all three strategies to meet their personal objectives. For example:

• Reinvest 70%, hold 20% in the Cash Unit Account, and withdraw 10%.
• Temporarily keep repaid capital in the Cash Unit Account while evaluating new investment options.
• Maintain a standing balance in the Cash Unit Account for opportunistic reinvestment.

This flexible structure puts you in control of your capital at all times.

Start Investing with TierONE Capital

The starting point for generating wealth through TierONE Capital is simple:

1. Complete an investor registration form.
2. Access your secure Investor Portal to view current investment opportunities.
3. Transfer funds to your Cash Unit Account.

The Investor Portal allows you to view available investment opportunities and invest with a click of a button. This means you control the timing and amount you wish to invest, helping you maximise your investment capability and generate the best possible returns on your money.

Income earned, whether withdrawn, reinvested, or held in your Cash Unit Account, is generally treated as assessable interest income and taxed at your marginal rate. We recommend consulting your tax adviser or accountant to understand how this may affect your specific situation.

Whether you’re seeking capital growth, reliable income, or a flexible mix of both, TierONE Capital gives you the tools to tailor your investment strategy. With the ability to reinvest, withdraw, or utilise the Cash Unit Account, you remain in full control of your financial journey.

Contact our Investment Services team to learn more investments@tieronecapital.com.au or 1800 287 346.