Peter and Jane own a number of child care centres and they approached their existing accountant, and the financial planner associated with the accountancy firm, and said: “We are paying too much tax and we have strained cash flow. What can we do?”
The response they received was; “Nothing, you just have to pay the tax…”
A friend referred Peter and Jane to us and we took the time to ensure we fully understood their goals and objectives. These included:
- Reviewing their tax situation.
- Freeing up cash flow
- Purchase another child care centre within three years, and;
- Retirement for Peter at age 60.
After understanding these goals and objectives, we offered a solution that re-organised their affairs, this included:
- Set up a budget to enable them to live comfortably now
- Repay a $565,000 home loan
- Increase contributions to superannuation, and;
- Holding assets in a tax effective manner (both short term and long term).
Peter and Jane are now able to divert their home loan repayments to a tax effective environment to assist with debt reduction and retirement planning. They have managed to repay $400,000 in re-organised debt over the last three years, which is helping Peter to reach his goal of retiring by the time he is 60 (two years' time).