Income investing: boost your earnings through investments
Wondering whether to combine finances after saying ‘I do’? Get tips on budgeting, joint accounts, and achieving your financial goals in married life.
If you have a high net worth, you’ve worked hard to get where you are. You want to not only protect what you’ve built but also ensure it’s passed onto your family intact.
As a financial planner in the Southern Highlands, Poole Advisory has years of experience helping high-net-worth individuals improve and protect their financial position. This article will give you some effective strategies you can use to safeguard your wealth from risk.
According to the latest available data from the OECD, Australia has the second-highest personal tax rate as a share of total taxes. This means, as a high-income earner, tax strategies are critical to protect your net worth. Careful planning can protect your income and ensure more of it ends up in your bank account, instead of going to the government.
The simplest way to reduce your payable tax is through deductions. This includes deductions for:
Capital gains tax (CGT) is an important consideration when managing investments. It is the tax levied on the profits generated from the sale of assets such as shares, property, or businesses.
You pay capital gains tax in the same financial year you sell an asset. Timing the sale of an asset can optimise tax outcomes, by considering your overall income for the year and any available capital losses that can be used to offset gains. Additionally, you can reduce your capital gains tax by 50% if you hold the asset for longer than 12 months.
Your superannuation provides a powerful outlet for tax planning. For example, you can sacrifice some of your salary and have it paid directly into your super account instead.
These contributions are taxed within your super fund, usually at a rate of 15% (although if your income is above $250,000 you may also be subject to a Division 293 tax as well). Either way, the amount of tax you pay could be lower than your marginal tax rate. This enables you to reduce your tax bill and grow your retirement nest egg at the same time.
If you keep all your eggs in one basket, you expose your wealth to a high level of unnecessary risk. That’s why it’s a fantastic idea to diversify your investments across a range of different asset classes. These could include:
A trust can be a useful tool for protecting your wealth. Establishing a family trust, for instance, can offer significant benefits such as asset protection, tax efficiency, and flexibility in wealth distribution.
By structuring assets within a trust, you can safeguard them from potential risks and legal challenges, while also providing for your family’s financial security. This is particularly beneficial if your profession leaves you at risk of frequent lawsuits, such as a doctor or surgeon.
Your Will is also an important tool to protect your wealth and ensure its smooth transition to future generations. It dictates how your wealth will be distributed after you die, ensuring that your assets are passed on according to your wishes.
Without a Will, your assets may be subject to NSW intestacy laws, and the process can be complex and time-consuming for your loved ones. Regularly reviewing your Will so it remains aligned with your wishes can avoid complications for your family and ensure they’re taken care of after you are gone.
Insurance provides protection against unexpected risks that could jeopardise your financial security. As a high-net-worth individual, you may want to consider:
While most high-net-worth Australians can benefit from the above strategies, it’s important to remember your situation is unique. A financial planner can provide personalised advice tailored to your specific financial goals, risk tolerance, and lifestyle aspirations. This can minimise any risks and ensure you protect and grow your wealth over the long term.
A financial planner can help you to:
If you’d like to discuss wealth preservation strategies with an award-winning adviser in the Southern Highlands, Poole Advisory can help. Take a look at our financial advice services or get in touch for a free introduction meeting today.
This information contains general advice only, that is, advice which does not take into account your needs, objectives, or financial situation. You need to consider the appropriateness of that general advice in light of your personal circumstances before acting on the advice. You should obtain and consider the Product Disclosure Statement for any product discussed before making a decision to acquire that product. You should obtain financial or credit advice that addresses your specific needs and situation before making investment or borrowing decisions. Taxation information is based on our interpretation of the relevant laws as at 1 July 2018. While every care has been taken in the preparation of this information, Prosperitas Partners Pty Ltd does not guarantee the accuracy or completeness of the information. The case studies are hypothetical, for illustration purposes only and are not based on actual returns
Poole Advisory Pty Ltd ABN 15 642 040 604 is a Corporate Authorised Representative (No. 001282603) of Prosperitas Partners Pty Ltd ABN 30 662 654 453 AFSL 544 917
Wondering whether to combine finances after saying ‘I do’? Get tips on budgeting, joint accounts, and achieving your financial goals in married life.
Wondering whether to combine finances after saying ‘I do’? Get tips on budgeting, joint accounts, and achieving your financial goals in married life.
Wondering whether to combine finances after saying ‘I do’? Get tips on budgeting, joint accounts, and achieving your financial goals in married life.
Wondering whether to combine finances after saying ‘I do’? Get tips on budgeting, joint accounts, and achieving your financial goals in married life.
Wondering whether to combine finances after saying ‘I do’? Get tips on budgeting, joint accounts, and achieving your financial goals in married life.