Five Expensive but Avoidable Financial Mistakes

Years ago everyone looked forward to their “retirement” at age 55. But these days, do you really want to retire?

We’ve all heard many stories about people who retire, and they’re dead less than a year later. Why?

Because they have nothing keeping them mentally active, nothing keeping them going with real purpose.

Instead of aiming for retirement, we believe everyone should be aiming for financial freedom. Freedom to do what you want, when you want.

The road to financial freedom has many potholes. Here are some of the most common mistakes, with help on how to avoid them.

Too little too late
The Government has deliberately set up our superannuation system to favour those who start early and stay on track. Those who leave it to the last minute often do so at their own peril. Start as soon as possible and map out your road to financial freedom.

Pay unnecessary taxes
There are many simple, legal ways to make sure you are not paying more tax than you need to. Ask us at Select Accounting if you are making the most of the tax incentives offered by the Government.

Fall for investment fads

This probably poses the greatest single danger to your prosperity. Tech stocks in the late 1990’s and speculative miners in the late 2000’s were very tempting when they were rising fast. Your best weapon against this temptation is to develop a disciplined investment plan and stick with it.

It won’t happen to me
Wealth management is just as much about protecting your assets as it is about building wealth. Make sure you have a “Plan B” to pay off your house and look after your family if you were to die or be permanently unable to work. Your ability to earn money is actually your most valuable asset, so it’s vital to protect that asset with income protection insurance. If you don’t have income protection insurance – please contact us IMMEDIATELY for a free quote.

Fail to plan
As the old adage goes, “if you fail to plan, you plan to fail”. If you can articulate your goals and visualise what achieving these goals looks like, you are well on your way to achieving them. Write down your three most important goals and keep then in a safe place to review at least once a year.

Keeping your Business Alive

What’s your strategy to keep cash flowing through your business?

High sales and consistent profits are great aspects to have in your business, but without cash rolling in regularly you won’t be able to pay your suppliers, staff, even yourself! Give yourself some security by preparing a Cash Flow Forecast for your business.

What is a Cash Flow Forecast?

A cash flow forecast is a projection of all of your income and expenses for your business over the next 12 months, with an emphasis on when the cash from the income and expenses will be received and sent. This includes when your income locked up in Debtors will be received and when your Creditors will need to be paid.

Once you prepare your 12 month cash flow forecast you will be able to spot weaknesses in the year and plan for it. By taking a proactive approach and planning ahead means you can start making changes now to help you through those tight periods, such as introduce tighter credit policies with your customers or acquire a line of credit to help you through the period in the future.

What’s even better is banks love them! Are you looking to lease some new equipment? If you are looking for finance it’s going to be easier for the banks to approve you if they can see you have capacity to make loan repayments.

Would you like security in your business this year? Are you interested in preparing your own forecasts for the year?

If you would like Select Accounting to prepare a 12 month cash flow forecast for your business give us a call on 02 4337 5155

What can I claim against my tax?

What can I claim against my tax?

It’s tax time again. What can you claim to reduce your tax?

Please take just 2 minutes to read this blog article. We’ll explain:

• Deductions you can claim

• The importance of a fantastic tax accountant

• The “tax trap” you need to avoid

• Links to more information about specific deductions

Deductions you can claim

According to the Australian Taxation Office (ATO) website, there are 3 things you need to claim a work-related deduction:

1. You must have spent the money yourself and weren’t reimbursed;

2. It must be directly related to earning your income; and

3. You must have a record to prove it.

The ATO allows you to claim up to $300 for work related expenses without having kept any receipts – but you must have spent the money and it must be related to your employment.

If the expense was for both work and private purposes, you can only claim a deduction for the work-related portion.

If the cost of any item is over $300, it will have to be depreciated (a portion of the cost claimed each year over its effective life).

The importance of a fantastic tax accountant

Many accountants seem to be working for the ATO. Instead of trying to maximise what you claim, they’re often too scared of upsetting the ATO rather than fighting to get you the largest legal tax deductions.

Rather than using an accountant who “works for the ATO” – use an accountant who works in your best interest.

At Select Accounting – we’ll help you to claim every last dollar you can, and make sure you stay out of jail by not claiming anything you shouldn’t. Our team are aware of everything you can and can’t claim and what you should do this year to give you a bigger tax refund next year.

Our extraordinary accountants are all highly trained specialists at legally reducing your tax – so talk with us today!

The “tax trap” you need to avoid


Everyone wants to increase their tax refund (or reduce their tax payable). We’re here to help you to do this!

Tax saving strategies generally involve you spending money on “something” which creates for you a tax deduction. The “something” you spend your money on could be an expense, an asset, or an investment related payment (like superannuation or prepaid interest on an investment loan).

However – please don’t fall into a common trap of spending money just to get a tax deduction. You only save tax based on the marginal tax rate proportion on the amount you spend, NOT the full amount you spend.

For example, if you earn say $85,000 a year, your marginal tax rate (including Medicare levy) is 34.5%. This means any extra dollar you earn will be taxed at 34.5%, and any extra dollar you claim as a deduction will save you 34.5%.

So, if you spend $100 on something that you can claim a deduction for, you will get back $34.50 from the ATO. But it will still cost you $65.50. So only spend money on what you NEED, not just to create extra tax deductions for yourself.

We are here to help!

To make an appointment with us to discuss and prepare your 2017 Tax Return please do not hesitate to contact us
02 4337 5155 or via email info@selectacc.com.au.

General advice disclaimer
General advice warning: The advice provided is general advice only as, in preparing it we did not take into account your investment objectives, financial situation or particular needs. Before making an investment decision on the basis of this advice, you should consider how appropriate the advice is to your particular investment needs, and objectives. You should also consider the relevant Product Disclosure Statement before making any decision relating to a financial product.

We’re a lucky country, but will you have enough for retirement?

If you were to watch the news recently (by recently I mean in the last 2 decades) you would think that Australia maybe about to lose its ‘Lucky Country’ tag. However research released by Credit Suisse Research Institute has Australia fairing very well in the wealth rankings.

The richest nations in the world are classed as those with a wealth per adult figure of over USD 100,000. Below is a table ranking these nations in order of wealth per adult.

Rank        Nation          Avg. wealth per     Change since mid-2013

                                    adult (in USD)
1              Switzerland  581,000*               10.5%

2              Australia      431,000                 5.0%

3              Norway        359,000                 4.0%

4              USA             348,000                10.6%

5              Sweden       333,000                 4.8%

6              France        317,000                 9.1%

7              Belgium       301,000                11.7%

8              Denmark     293,000                16.1%

9              UK               293,000                18.3%

10           Singapore    290,000                  2.0%

*Dollar appreciation and strong equity performance has resulted in this significant increase and new world record for the Swiss.

Australia is placed nicely in 2nd place, punching well above their weight. When you look at median wealth per adult, which gives an indication of wealth equality, Australia tops the list (as it has for the past 5 years) at USD 225,000.

So what does this mean?

It means that things are still pretty good here in Oz. With high wealth per adult and strong growth in household wealth it’s a good time to be in business.
With only 6% of all Australians with a net worth of less than USD 10,000, that equates to plenty of potential customers.

To Promote & Protect

Depending on your stage of life, having money coming in and compulsory superannuation tucked away for you, it’s important to know that you’re protected and that your future is secure.
Have you considered salary sacrificing into your super to maximize the compound interest effect before you retire?
Or you may already be well set up, are your assets protected?
Australia certainly still is the lucky country, however it’s never a good idea to rest on your laurels.


Source: https://publications.credit-suisse.com/tasks/render/file/?fileID=60931FDE-A2D2-F568-B041B58C5EA591A4

General advice disclaimer
General advice warning: The advice provided is general advice only as, in preparing it we did not take into account your investment objectives, financial situation or particular needs. Before making an investment decision on the basis of this advice, you should consider how appropriate the advice is to your particular investment needs, and objectives. You should also consider the relevant Product Disclosure Statement before making any decision relating to a financial product.]