Typically high earners and those with high net wealth have complexity and that can get in the way of practical wealth building and management. Over the years I’ve committed to making what is complex simple, and in doing so I created what I call a Chase & Enjoy wealth approach.
In this article, I provide an insight to this practical financial planning approach which I’ve designed for high net wealth individuals, professionals and business owners to live life their way.
My Chase & Enjoy approach is built on the fundamentals of wealth tracking and tax forecasting.
You may have heard the saying: You can only be what you can see. While it’s generally used in context of role models, it’s also true of being wealthy.
When you can track your wealth, proactively contribute to it and watch it grow, it’s …well, fun! And believe me, wealth and fun go hand in hand.
By nature I’m a planner who works to live, and in accordance with my business mantra, I use wealth to live life, my way.
This is an ingrained philosophy, cultivated by my father (a former accountant and financial adviser) who consciously made wealth decisions to enhance his, and his family’s lifestyle.
I remember being seven years old when he explained how purposefully planning our family’s financial assets funded our trekking adventure through South America and other far-flung places. (Yep, I was seven!)
It left an indelible mark on me and underpins my commitment to well-executed financial planning for creating extraordinary lifestyles for my clients.
High net wealth individuals, couples and family groups need robust and holistic financial planning that is tax effective.
Many people underestimate the value of tax planning in alignment with financial planning. In the absence of tax effective structures such as trusts and superannuation, high income earners can pay considerably more tax than necessary.
However, thanks to the recently amended Stage 3 Tax laws, most Australians will pay less tax from 1 July, 2024.
For those earning $190K per year you can expect $4,529 in extra cash to your pay packets.
In households with two $190K-earners that’s an extra $9,000 in disposable cash each year that could make a considerable wealth and lifestyle difference.
The question is: Will you chase the opportunities your tax-cut windfall brings?
You could do nothing and allow it to become absorbed in day-to-day expenses or you could use it with purpose.
As $375 per month (or $750 per couple) its money you’ve never had before. Chasing and enjoying the wealth opportunities will therefore be financially pain-free and guilt-free.
Spend with purpose
Of course you should spend it, but may I suggest you spend it with purpose. Be conscious of making your purchases meaningful. Whether it funds a monthly night out or family occasion or you let it build up over the course of the year and use it for something more substantial like a family holiday. Enjoy it!
Repay more
If you have a home loan, the extra $375 or joint $750 additional repayment each month will make a good size dent in your debt. However, you may also keep it liquid by paying to an offset account where you can access it easily if you want to use it for something else.
Invest and grow your wealth
Chasing extra wealth has never been easier with cash you’ve never had before. For example, using a dollar cost averaging investment approach to buy quality shares has the potential to build wealth effortlessly.
Enjoy your retirement
It’s something of a double-wealth-whammy when you contribute your tax windfall to superannuation. Firstly it boosts your retirement savings as you can add it to your employer’s annual super guarantee contribution. On $190K your employer’s 11.5% contribution would be $21,850 add your $4,500 annual tax windfall and you’ve still got some wriggle room in your $27,500 non-concessional contribution cap.
Secondly, when salary is sacrificed to super, the additional cash will be taxed at a very agreeable 15% (plus 2% Medicare levy) rather than taking it as wages which is taxed at the higher marginal tax rate of 37% (plus 2% Medicare Levy).
Tax planning
With the end of financial year only a few short weeks away, chasing wealth opportunities through tax planning should be top of mind.
With the tax cuts come opportunities for deferring income from this year to the next. This year deferring income could help reduce your tax liability, and next year it will attract less tax as the new reduced tax rates take effect.
These are just a few practical examples of chasing wealth and leveraging tax opportunities.
But hey everyone is different and how you chase and enjoy your wealth needs to be considered and tailored so you can live life, your way! For a no strings attached discussion, may I invite you to request a consultation or call me on 08 9328 5044.
Moiler Wealth helps high net wealth individuals and family groups, professionals, business owners and pre-retirees to live life, your way!
Learn more about Adam here.
This document contains general advice. It does not take account of your objectives, financial situation or needs. You should consider talking to a financial adviser before making a financial decision.
