28 May 2015

"Don’t let the budget goodies cloud your decision making…"

The new budget certainly created some interest from business owners this week. The bulk of our queries related to small business tax cuts and the $20,000 tax write-off for capital items. Some entrepreneurs dusted off old business plans with the enthusiasm and excitement of a 3 year old at Christmas time! This is just what Messrs Abbott and Co. were looking to achieve. So this week I want to address an important issue when making business decisions - Emotion.

To start with – we humans are emotional beings! Sometimes people come in to us with their business plan that they have completed and put a lot of effort into - hence it’s their pride and joy. They don’t necessarily want to hear the truth – they want a tick of approval or a “Well Done – you got a High Achievement”. The owners of the plan are sometimes already living the dream of the business plan when they arrive – in their mind they are almost retired, they are making so much money from this fabulous concept that they have come up with.
Our responsibility as professionals, is to examine the facts and question the relevant parts of the business plan and concepts.  We take the emotion out of the decision making. That’s not always easy for some people to handle. In fact it can be downright deflating. However I would prefer to have somebody leave a discussion with a list of issues to contemplate or at worst – deciding not to go ahead, then risk losing all the capital they have built up, due to major flaws in their business planning.
Sometimes it’s simply not the right time to commence a particular type of business. For example – now is not the time to open a new Indian Restaurant in Gladstone. The concept would have to be extraordinary for it to succeed in the current market. We make our best decisions when we are able to park the emotion. We advise investors if you make an offer on a house and you don’t care if the seller agrees or not because there is so much on the market – then that’s a good emotionless decision. That’s often where we make our most money as investors.
At Sothertons, we go through a rigorous planning review so business entrepreneurs are clear about their risks ahead. Call us on 07 4972 1300 to assist you in making sure your business decision is made for the right reasons.

"Another tax year end is almost upon us!" Article by Tina Zawila

When this article goes to print on Tuesday, it will be exactly six weeks until 30 June.  Hasn’t that snuck up on all of us?!  NOW is definitely the time to think about tax planning, because in six short weeks it will be all too little, too late.

So this week, we share our top five tax planning strategies with you. 
1.       Defer Income
 If possible delay invoicing until after 30 June so that the income will be declared in your 2016 tax return instead of 2015.

2.       Bring Forward Expenses
Where possible, you may wish to bring forward any expenditure such as consumables, repairs and maintenance and other prepayments (for goods or services that will be used within the next 12 months).
3.       Write off any Bad Debts
Go through your list of clients/customers that owe you money, and consider the likelihood of you receiving payment.  If you are concerned that the debt is not going to be paid, then write it off in your accounting system before 30 June. 

4.       Superannuation
If you are self-employed consider maximising your contributions to superannuation.  This is one of the best tax deductions – spending money to save tax and provide for your own retirement.  Remember, you must actually contribute the funds before 30 June (you cannot claim a deduction for contributions made after 1 July, even if you say they related to the 2015 year.
5.       Capital expenditure
In light of the recent Federal Budget, if you are a small business (with turnover of less than $2million) you can now immediately claim a deduction (in full) for assets that are installed ready for use prior to 30 June, provided the asset costs less than $20,000.  This is a huge incentive to buy new plant and equipment which would normally only attract a pro-rated depreciation deduction.
These are very basic, generic, tax planning strategies.  As with all financial advice, it is absolutely vital that you consider your own individual circumstances and obtain advice tailored to you before taking any action.  Too often, we see the ineffective results of “self-tax planning”, so please call the professionals at Sothertons Gladstone today on 4972 1300, and we will help you minimise tax!

"Perseverance, the Secret of Success" Article by Tina Zawila

This week Steve and I have been called upon for advice from clients on a range of different issues, however, there seems to be one underlying solution to the challenges most are facing…and that is perseverance.

Often when things aren’t going to plan, we start looking for an easier option, or an alternative solution, and sometimes our search reveals an attractive and viable substitute to our original path. 
However, there are other times, when simply persevering is what is required to reach our goals.
As Winston Churchill said, “If you are going through hell, keep going.”
There are certainly some businesses and individuals facing some tough times at the moment and some important decisions need to be made.  These decisions shouldn’t be reached lightly or without consideration of all of the alternatives available to you. 
We also strongly suggest that you seek advice or a second opinion before making your final decision.  Sometimes, you may simply be too close to the situation to see all the alternatives, or you may not be aware of all of the consequences of your decisions. 
Whilst the theme of this article is perseverance, we are not suggesting that you should never walk away from something that is not working for you.  Sometimes you need to let go of something to make way for a better opportunity.  However, it’s important to make an informed decision, before throwing in the towel – you may be on the cusp of the breakthrough you’ve been looking for.
Either way, once your decision has been made, commit to what needs to be done, the actions that you need to take, any sacrifices that need to be made, and persevere until you succeed. 
At Sothertons we are dedicated to helping you reach your goals and we are here to help you with any decisions you need to make.  Call us today on 4972 1300.


26 May 2015

"Dreaming of politicians who do the right thing…." Article by Steve Marsten

Well its Federal Budget week. This is when the Government of the day shares its plans to grow Australia’s economy with various tinkering of a very complicated tax system. The only time in the year when the National Treasurer takes the lime light away from the leaders of both sides of the political divide and becomes the centre of attention.

It got me thinking (or is it dreaming?) wouldn’t it be great if all our premiers actually met over a coffee and asked themselves…. What is the one big thing that we could do to improve the tax system within Australia? Something that would make things simpler, less invasive and fairer for all. Why not increase the GST to 12%? This would still be considerably lower then most of the OECD. Make it across everything bar Health Services and banking services. Now I may not make many friends with this suggestion and clearly not many politicians have the stomach to even consider it however we did vote to get it in once and we do need to talk about it.
The GST is considered the best tax reform ever made in this country. It spreads the tax burden fairly across the nation and provides states with an assured income. Further, we as consumers hold one very important key – it’s the right to spend or to save! We can actually choose whether we want to pay GST and how much we want to pay. Everyone in the country holds this right so to some extent, taxpayers can determine how much tax they want to pay.
The other advantage is that it would make the Governments of the day less likely to attack the hard earned savings of the Taxpayers who have worked hard to stow as much as they can into their superannuation without fear that the Government will take a second dip into these reserves.
…..and the premiers all agreed setting aside their political differences and the NSW premier rang Mr Abbott on his mobile and made the suggestion. Tony agreed and prepared the legislation immediately; and everyone with saved superannuation had a better nights sleep knowing that we have politicians that actually care about our Nations future! We can dream….. can’t we?
Contact Sothertons for your Budget Wrap email on sothertons@sothertonsgld.com.au or ring 4972 1300 to provide your email address to get the wrap.

"Dealing with change.." Article by Steve Marsten

There is a lot to deal with in life nowadays….Orange is the new black, 50 is the new 40 and Life and Financial Planners are the new personal trainers! Sometimes we don’t know when it’s the right time to call in the trainer or coach. Last week I met an acquaintance who thought he needed a financial planner. He was in the middle of a major change in his life and didn’t know what to expect. Then again the more we talked it turned out he needed to change some things but didn’t know how to make it happen!

We ended up discussing what it was he really wanted to change and identify some target areas such as relationship; health and finances or career. The starting point needed to be the area of “least satisfaction”. Sometimes we feel we have a good life and there are some parts that just aren’t great. Often it’s the area where we suffer the most that, with focus, we can create the greatest improvement.
We also came up with a 6 point plan to ensure that my friend had some way of measuring his achievements and knowing where he needed to continue to focus his energies and thought processes.
1.       Set some manageable goals. These needed to be short and to the point.

2.       Ask your self the following questions everyday – Did I do my best to:

a.       Set clear and concise goals?

b.      Make progress toward my goal achievement?

c.       Maintain a good level of happiness?

d.      Build positive relationships?

e.      Be fully engaged?
Failure is part of life and progress so it’s bound to happen along the way to achieving your goals. Whether it’s a financial goal or any other goal we are aiming  for - when we fail, we need to forgive ourselves and be get back on top of the plan. Stay disciplined to the goal. Set the failures aside and carry on. Don’t replay or relive failures – focus on the benefits of achieving your goals and what that will mean in terms of the positives for your life. At Sothertons improving our clients’ lives through goal achievement is a high priority for us. Call 07 4972 1300 to put your plan in place today.