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strategy and structures
the STrategy
THE WHAT
What is the end goal? What are you looking to invest for? Having real long-term goals are fundamental for success, with no roadmap, there's little chance of success!
Imagine trying to build a house with no plans. The best way to figure out where to start is to work from the desired goal, you can work backwards establishing clear and precise milestones that need to be achieved, but even that can be daunting.
Our Game Plan template helps you quantify and qualify what your actual goals are. We're not talking unrealistic goals either, these need to be clear, well-defined and measurable.
To get started on the journey to becoming wealthy you must first take stock of your current position.
By taking responsibility and ownership of your current situation you'll attain a clarity that only you can change your situation, for better or worse, your decisions and actions are the only things that can change your circumstances.
Outside factors need to be partitioned and kept away from your goal setting process.
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When you speak with your Strategy Consultant you will find we are more interested in getting to know your situation than sharing our successes.
Our goals have now re-aligned to our new situation, we can be very comfortable financially but now we have new goals that drive us further than before and we need to build a robust team of likeminded investors around us.
When you are assessing your own financial goals one thing that helps is to put a value to a goal, let's say you wanted to set a dollar figure as your annual retirement income.
EXAMPLE:
If I want $100,000 in ongoing income in retirement the unencumbered asset value would need to be $2,000,000 assuming a rate of return of 5% p.a.
Time to retirement needs to be factored in, plus you probably want to adjust for inflation and my retirement nest egg may need to be north of $3.5m+
Set your target, the sooner the better!
latest investment statistic
The structure
THE HOW
What is your structure when buying? We know the what and hopefully by now the why, so how do you buy the property? Sounds quite silly when you hear this for the first time.
Different ownership structures carry different benefits and restrictions, they serve different purposes, for different scenarios.
When weighing up the options and structures available, cost does become a factor, hopefully a cost that can be substantially offset by the benefits gained, this can be tricky to navigate but educating yourself in this field by asking questions pays massive dividends.
EXAMPLE:
I am planning on buying a property and I have been told that a Company structure would be a great idea. So, I set up a Company and purchase a property. Later I find myself questioning the prohibitive costs of running the company. What tangible benefits do I see day-to-day? Was it worth the additional cost, and if I decide to sell the property will I have any avoidable expenses?
The issue here is that I have set this company in place without first having undertaken a cost-benefit analysis. Is the ongoing cost and time obligation being substantially reimbursed by the financial benefits of the company?
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Your strategy and structure need to work in tandem to justify any potential costs, weighing up additional accounting fees, management and compliance fees.
You may be better off with a Family Trust, perhaps a Unit Trust, but the purchasing entity should be known well in advance of any potential purchase.
Having the right ownership structure can help reduce your new annual tax obligations, it is also important for future potential sale of the property as there may be ways to reduce capital gains tax etc.
Most investors will purchase their first property in their personal names as the cost of setting up a Trust or a Company seems expensive, however if you have plans of multiple properties the cost could be born out over multiple years.
It is extremely important to work the strategy and structure into the same conversation because it can cost/save you tens of thousands, potentially hundreds of thousands of dollars.
EXAMPLE:
I purchase a property with the intention to pass to my child when they turn 18. After speaking with my accountant they suggest a Unit Trust would allow me the ability to transfer ownership of the Unit Trust rather than transferring the property, thereby avoiding Stamp Duty as the ownership of the property has not changed.
I purchase a property with the intention to pass to my child when they turn 18. After speaking with my accountant they suggest a Unit Trust would allow me the ability to transfer ownership of the Unit Trust rather than transferring the property, thereby avoiding Stamp Duty as the ownership of the property has not changed.
