Ed

I'm glad we did this one, Andrew.

So because they borrowed more money to renovate the property, they've now got more debt.

And that means that they need to earn even more income in order to be able to buy the rental.

Can they pay off their credit card?

Oh, they potentially could actually, did I put the credit card in here?

I might've forgot.

Oh, they could, they probably could do that, but just, but there's a really interesting point here, Andrew, which is notice how.

If they wanted to get over this test, either Sophie would need to increase her income by $4,000.

Or Matt could increase his income by $3,000.

Now, God, how exciting.

And that's because Sophie's marginal tax rate would be probably 30%, I think.

Whereas Matt over here, his marginal tax rate, let's just go down to the bottom because it's actually got all of the assumptions in here.

His marginal tax rate would be 17.5%.

So then Sophie says, Matt, I've already talked to my boss.

I can't go back to him.

So then Matt, okay, Sophie, I'll go talk to the boss.

It's marginal, but they got it.

Oh, let's put it in.

I'm so proud.

Oh, good on you, Sophie and Matt, you fictitious examples of people.