Re: Any Financial Advice
"Freehold the House you live in".<br /> <br />Best investment you will ever make.<br /><br />"Always expanded out of Tax Paid Profit."<br /><br />I didn't do it for the 1st 18 yrs (Motels, Motor Inn) but father put the idea to me, and I tried it in this business.<br />It has some real down sides tho, as you just buy what you can afford so you have a lot of old/2nd hand/makeshift gear.<br />The up side is: you have no debt, no lease repayments, no credit charges etc etc. Hence you don't need to turn over so much to make the same profit.<br /><br />"Work from Home" if possible. <br /><br />You avoid all the costs such as rent, power, phone,rates utility charges etc (there is a page of these expences). The bottom line is, an associate of mine doing pretty much what i do but not working from his home needs a turnover of $700,000 year to net $84,000. I turnover $125,000 to make $75,000.<br />He is running around 12% net profit of turnover. I am running around 60% net profit of turnover. (His rent is over $6,000 month. Trucks, 4x4 SUV, Mums new car leases exceed $4500 month and so the list goes on). <br />We have a drought at the moment and times are tough. He is very worried, I'm a little concerned. If his sales are down, his expences continue. My sales are down, I have few expences, and i can make changes and adjustments quickly. eg I use to spend over $10,000 yr on seedlings from a grower. My wife has learnt to grow/raise these seedlings. So we spent $2,500 in purchasing seed, and have saved $7,500 yr. My son did the deliverys. He left and wife and I do it, so that freed up another $14,000. I have made minor adjustments around the place which has freed up another $6,000 yr, so I am better of by by around $27,000 yr which compensate for my drop in sales, not effecting my taxable income very much.<br /><br />"what does Tax Deductable mean". <br /><br />If you buy a expensive new vehicle because you get the depreciation off it and tax deductible interest charges on the loan etc, be careful, you may be paying $1,000 month to the bank to save yourself $250 month in tax. Where do you think the other $750 a month comes from - your pocket mate. Not saying it dosn't work, do your sums and be careful. Buying an older vehilce freehold, you may save your self $12,000 yr in repayments and pay $3,000 more tax, but you are $9,000 yr better off, and if your net marging is say 25%, then you don't have to sell an extra $36,000 goods. This is just a rough example, so hope it is understandable.<br /><br />Golden rules in this house<br /><br />Credit card is paid in full every monday afternoon.<br /><br />If the money is not in the bank, you can't have it - and that goes for everything.<br /><br />Not saying this will work for you, but it does for us. We both sleep well EVERY night and have no business or income worries in the world.<br /><br />Cheers<br />Phillip
