Wayne & Diane’s story
Wayne & Dianne are in their mid 30s and own a plumbing contracting business in country Victoria. Over a period of 5 years their family business has continued to grow. They have enjoyed this period of success which meant that they could reduce their business debt and reinvest funds to grow the business.
However, a real issue has been the fact that their tax bill has increased each year to go with the business improvement. Wayne & Dianne were happy with the business improvement but now were extremely keen to transform this business improvement to enhance their personal wealth. After a discussion with their accountant Wayne & Dianne decided to make a sustained investment to their future via contributions to their superannuation fund. The commitment was to invest $20,000 each for both Wayne & Dianne per year for a five year period to add to their current $30,000 balance each in superannuation.
What was the problem?
Wayne & Dianne felt they were paying too much tax from their business success. They felt that the success of their business was not being seen in growth in personal wealth as they entered their early 40s for all their efforts to improve their business Wayne & Dianne couldn’t see that their personal financial future was being secured.
The Solution and result;
As the superannuation is tax deductible, they saved $12,000 in company tax every year for five years (i.e. $60,000 in tax). At the end of the 5 year period they had a combined $310,000 in superannuation after paying all taxes and fees associated with the consistent contribution and earnings. They invested each of these funds via a Self Managed Superannuation Fund to a share portfolio that contained $250,000 in blue chip shares. The remaining $60,000 was invested in cash funds.
Now after 10 years of working hard in the business not only did they have a solid business asset which was salable, they had begun to secure their personal financial future with $310,000 in net investment assets that they had full control over.
Every situation is different, so if you would like to find out more information about what superannuation strategy is right for you click on this link where you can register to attend our FREE upcoming Superannuation Strategies Information Session. Seating is limited so call Lynda on (03) 9744 7144 to book.
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