400,000 problems
Hi Scott,
My partner and I earn great money, close to $400k a year. After years of splurging on kids, cars, houses and fantastic holidays, we are finally sorting out our ‘stuff’. We have savings of about $70k plus about $150k in shares. Here is my question: I took a call today from a financial company talking about a strategy called ‘post reduction tax’. Sounded good. Is it a real thing?
Cindy
Is ‘post reduction tax’ a real strategy?
Well, I think I remember reading about that in the Australian Journal of New Idea. Professor Kim Kardashian was detailing a ‘post reduction strategy’ to get her bikini bod back after having her latest baby.
Cindy, what I’ve just said is no more stupid than taking a cold call from a stranger who pitches you an investment opportunity to save you tax.
Statistically, on your household income, you’re 97 percent wealthier than the rest of the population -- it’s time you started acting like it.
Three points:
First, while a high income allows you to look rich, it doesn’t automatically make you wealthy. For that you need to save, which you seem to be doing, so well done.
Second, you should minimise your taxable income the smart way. Salary-sacrifice the maximum amounts you can both put into super ($30,000 if you’re under 50, $35,000 if you’re 50+). With any money left over, focus on paying down your mortgage, as well as looking to invest either in a family trust or investment bonds.
Finally, don’t get too stressed about paying tax. It’s a good thing! This is something I know about -- I’m a high income earner but I don’t have a dollar of debt. Some people would call that silly. I call it peace of mind -- and when you’ve got that, you’ve really got it made.
Scott