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Are you being too focused?
It’s Saturday and I’m sitting in a room of around 150 people all eager to learn how to improve their financial position. It takes a lot of commitment to be in a seminar room at 8.30am on the weekend and spend the entire day learning. I have spent many a weekend and evening attending similar events over the years.
What I found interesting is how many seemed to be so singularly focused on acquiring properties without giving some thought to what it actually means to them – everyone just wants to rush in and buy. I was the first presenter of the day talking about the importance of getting your financial foundations strong and robust. I’ve seen so many people come a cropper, especially in the last few years, because they didn’t spend enough time on the basics and building the right foundations.
The second speaker Keith Mason spoke on money beliefs. It was really interesting to watch the faces of the audience as he delivered his presentation. He held them spellbound as he pointed out many insights about themselves that you could tell had never even crossed their minds.
He talked about our lives being a bit like an iceberg. The bit on top of the water is what you see and that’s what many of us spend time managing and operating from. However the part of the iceberg under the water, the biggest part which is our subconscious, is what really drives us. This is the part that we know the least about and what can really sabotage our ability to get ahead.
It was great to see a property seminar company inviting speakers along who can help people learn about how to take a more holistic approach to building their wealth. I totally agree with Kieran Trass’ recent comments in the media about the numbers of property educators who are far more interested in lining their own pockets with mentoring fees that a genuine interest in helping educating people.
If it sounds too good to be true it probably is – after all if investing was so easy the average financial net worth of kiwis would be a lot higher than it is.
New tax changes for property investors
I thought this was a good summary that I received from my accountant Acorn Solutions about the forthcoming tax changes. The changes introduced following the Government’s budget announcements are not pretty and they require decisions to be made, some of which must be made before 31 March 2011.
Here are some of the things you need to be aware of:
• LAQC’s are not able to attribute losses to shareholders for income years starting after 1 April 2011.
• Shareholding changes in LAQC’s after 1 April 2011 will trigger depreciation recovered issues.
• LAQC’s can elect to ‘morph’ into another tax entity such as a Look Through Company (LTC), sole trader, partnership or limited partnership in the two years after 1 April 2011 with no tax consequences. There is of course a specific process to go through.
• There are limitations to the amount of losses the shareholders in an LTC will be allowed to claim.
• The depreciation changes introduced during last year’s budget will have the effect of reducing the amount of losses claimed, and as a result, the tax refund received.
Unfortunately, as is often the case with such wide sweeping changes, there is no ‘one size fits all’ and each case must be looked at based on your individual situation. Talk with your accountant to ensure you are well prepared and dont have any nasty and expensive surprises down the track.
The simplest things add the most profit
Ive just spend an amazing few days at a workshop called Rock Your Business, run by Mike Handcock. There were business owners from around the country all working on the business plans with the help of myself, Dave Rogers from Singapore who is an international business coach, Justin Herald from Sydney who built up an international brand called Attitude and sold it in under 7 years for many tens of millions of dollars and Alan Butcher a kiwi who built and sold David Reid Homes for many millions and more recently developed the Barn Company and Base 7 franchise systems.
A key message that kept coming up throughout the weekend was that we make things far more complex than they need to be. Its usually the simple things that we do consistently that add the most value. Justin is not a planner and he loves ‘stuff’ as he calls it. His simple way for achieving is to decide want he wants then plan to make enough money from whatever venture he is working on to buy what he wants. His rule is not to buy things from his current assets, which are extensive. Very simple.
If you have heard him speak he started Attitude with $1.25 in his bank, borrowed $50 from his brother and the rest they say is history. His latest venture Intimidate is a sunglass brand that cost him $150 to start and everything was presold before he incurred any costs.
Create simple systems and doing them well is one of Alan from Base7 key messages and he has certainly demonstrated how well that has worked for him. In my world of financial education its also the simple things that add the most value. People would benefit from spending more time on creating good basic financial habits that they would being too focused on the which investment is best.
Are you making you life more complicated that it needs to be? It maybe in relation to your business, your finances, your relationships or your overall life. One of Justins favourite sayings is ‘how well is it working for you?’ – what a great question to ask yourself.
Rock Your Business will be held again at the beginning of November. Heres the link if you are interested.
http://rybnewzealand-acumen.eventbrite.com
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