TAX TIPS
DO YOU REALLY WANT TO MINIMISE YOUR TAX?
B Y C H R I S G R A Y, C E O, YO U R E M P I R E
Most people dislike paying tax and would do whatever they can to minimise the amount they pay the ATO. They often say, “My accountant is great as he is cheap, and I hardly pay any tax”. This is completely understandable
get to charge that amount because
who minimises your income and tax
and makes sense, but being a
their clients get value out of their
down to zero, the chances of you
contrarian property investor, I would
advice and still see that they get a
getting a loan is almost impossible.
suggest that you might actually want
return on their money even after
the opposite i.e. an accountant who
paying the adviser. Would you
charges a lot of money and also gets
rather an adviser charges you $250
you to pay more tax.
and saves you $2,000 in tax or an
The reason I say that is because there is a limit to how much money you can save, but there is no limit on how much money you can make. If you earn $80,000 a year and you
adviser that charges you $2,000 but shows you how you can make another $10,000 - $20,000 a year by educating you around investments and wealth creation?
3. Concentrate on building your assets, not your income. Whilst having a high income is great, it’s unlikely to make you rich. However, controlling more assets, especially if they are appreciating assets, will do more, especially over time thanks to the 8th wonder of the world – the magic of compounding.
spend very little and minimise your
2. If you pay no tax, you’ll never
The more you can sacrifice in the
tax, the most you can increase your
get a property loan. Times have
earlier years, the more you’re likely
wealth by is $80,000. Whereas if
changed over the last few years
to benefit in the later years. Whilst
you invested your money wisely,
and the banks and lenders are
increasing your working hours from
there’s really no limit on how much
very concerned about borrowers’
40 to 60 hours a week will help,
you can make.
abilities to repay loans. 10 years
it’s unlikely to make that much
ago, it was relatively easy to borrow
difference to your long term pay
$600k - 800k if you had a $1m
packet. So, I would rather put an
property even if you didn’t have
extra 10 hours into work rather than
much of an income – it was called
20, and then use those other 10
an asset lend or low / no doc loans.
hours to concentrate on educating
Now it’s gone completely the other
myself about property and wealth
way, and not only do they want to
creation – it’s all a matter of balance.
1. The cheapest adviser is often the most expensive. As a general rule, most advisers charge based on their skill level and what their clients are willing to pay. One that charges low fees will often attract clients that are just buying on price and they may not have the confidence or skills to be able to charge more for the advice they’re giving out. High charging advisers often only
see every dollar of income, they’ll also look at every dollar you spend personally to ensure you can repay a loan. So, if you have an accountant C21 MARKET PULSE
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CENTURY 21
4. You pay for experience or you pay for your mistakes. Experience is often cheaper. It’s very hard to do something perfectly for the very
