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We do quite well on what we earn and manage to keep a $350-400K house quite nicely – we also have kids.
The reason we don’t struggle is because we don’t incur credit card debt – and we don’t work regular jobs. If you work for someone else then you are limited to what you can earn – if you are a wage earner then you don’t get the tax breaks that a corp or business can provide. How many workers can claim GST and have the balance deducted from their PAYG witholding?There are lots of ways to do it – you just have to get creative. I started by hitting the bookshop and reading everything business I could get my hands on and if I can do it – believe me – anyone with half a brain and a dose of organisation can:)
P
oh yeah and thanks TERRYW – I guess my company is a beneficiary too:) I never thought about it that way before.
P
I was told by my accountant that the trust would be taxed at individual rates if my company dividends the trust.
The only time it is not taxed is when I put my own after tax dollars into it.
A good ref guide is “Family Trusts” by NE Renton.
The problem with using the trust directly is that it doesn’t have enough history or assets yet for the bank to take it seriously on it’s own.A new accountant might be the way to go –
thanks for the RE trust tip:)P
It’s not so much using pre tax dollars as not using dollars coming directly out of my own personal bank account – my company earns more than I pay myself and if the rest sits idle then I only end up paying corporate tax on it anyway.
I have a superfund and a family trust – the family trust is handy for protecting assets but is taxed at individual rates – which my corp is not.
Capital gains is not an issue as I’m not intending to sell – the reason why I liked Mr. McKnight’s book is because he talks about rental cashflow – whereas everyone else talks about neg gearing and back end profit from sales.Thanks again,
P
