May, 2015

Negative Gearing Perth

Negative Gearing Perth – what does it really mean?

Negative gearing is an often used and sometimes misunderstood phrase in relation to investment and borrowings.  When boiled down to its basics, negative gearing refers to the practice of accepting a short-term loss from an investment with a view to converting that loss ultimately to a capital gain.

An investment is said to be negatively geared if, after taking into consideration the interest cost of the investment, the investment shows a negative return.

Whilst all taxpayers can negatively gear a property or other investment, it is typically more appealing to taxpayers with higher marginal rates of income tax.  This is because the Australian Taxation Office allows an offset of the loss from the holding of a negatively geared investment against other income.  Therefore, the higher a taxpayer’s marginal tax rate, the greater the benefit from a gearing strategy.

There may come a point when the owner of an investment decides to cash in on the capital growth their investment may have experienced over time.

It is at this point, when determining the tax to pay on the capital gain, that investors may appreciate the gearing versus capital gain outcomes.

Investors receive a tax deduction against other income on a dollar for dollar basis during the period that they hold their investment.  So a taxpayer on the top marginal rate of tax of 46.5% incurring a net loss on their investment is effectively having it subsidised at the rate of 46.5 cents for every dollar of loss incurred whilst they remain at the top marginal rate.

Conversely, due to the 50% discount that applies to capital gains for investors who hold investments in excess of 12 months, the tax payable on a capital gain made by a top marginal rate taxpayer in real terms equates to 23.25% maximum.

The secret to the gearing strategy lies in the ability of the investment to produce a capital gain over time where the investor can cash in on the gearing advantages whilst minimising tax payable on the gain.

PAYG Withholding Tax Variation

Taxpayers with negatively geared property or other investments may make application to vary the tax instalments deducted from salary or wages to enhance cash flow during the year rather than await a substantial tax refund on lodgement of their taxation return after financial year end.

The application needs to be lodged during May/June to allow for processing and approval, then notification to the relevant paymaster prior to commencement of the new financial year.

For assistance or advice please Contact Us to lodge on line and so bring forward the benefit of the reduced tax payable.

5 Best Selling Books about Business and Money

Bookstores and libraries around the world supply excellent instructional materials on books about business and money written by experts. The bestseller lists at Amazon are fantastic resources on books about business and money, so have a look and learn from the experts.

The Millionaire Next Door

Thomas J. Stanley, PhD, first published The Millionaire Next Door in 1996.  The latest edition was published in November 2010 and regularly appears on Amazon’s bestseller list.  Stanley debunks the myth that most millionaires drive luxury cars and live in classy neighbourhoods.  He says look around, and you will find rich people are conscientious, hard working people who live ordinary lives.  They carefully manage their money and budget thoughtfully. Rich people do not live beyond their means.  According to Stanley, most rich people did not inherit a fortune or win the lottery.

An Invisible Thread

In An Invisible Thread, Laura Schroff tells her true story of a wonderful friendship developed between a hard working sales executive and a homeless boy. On a busy New York City corner, the author swept by a young panhandler but suddenly felt the urge to go back.  She took the boy to lunch at a nearby McDonald’s.  Schroff continued to visit the boy which changed both their lives substantially.  It became a friendship that has spanned three decades and brought meaning to an over-scheduled professional and hope to a hungry and desperate boy living on the streets.  Nearly thirty years later, that young boy is married and has his own family.  Now he works to change the lives of disadvantaged kids, just like the boy he used to be.

Carrots and Sticks Don’t Work: Build a Culture of Employee Engagement with the Principles of RESPECT

Dr. Paul Marciano shares his wisdom on motivating employees in his book first published in 2010. Organisational leaders, trainers and human resource professionals will find seven drivers for employee engagement according to Marciano. He provides specific methods for assessing, troubleshooting and improving employee performance.  He recommends a respectful engagement of employees through coaching and mentoring to improve their performances. He also maintains that employees set up to succeed will reach the high expectations set by their leaders.

Zero to One: Notes on Startups, or How to Build The Future

On September 16 2014, Peter Thiel and Blake Masters published Zero to One: Notes on Startups, or How to Build the Future.  Thiel, a professor at Stanford, founded PayPal and Masters was his student who kept copious notes while attending his lectures. According to the authors, a bright future depends on asking questions that lead to find treasure in unpredictable spots.  Although reporters publish news of spectacular technological innovations, the authors maintain that the world is stagnant.  The authors note that a brighter future depends on innovators who uncover special secrets.  Mark Zuckerberg, Elon Musk and Jeff Immelt wrote positive reviews of Zero to One.

StrengthsFinder 2.0

The Gallup Organization, with author Tom Rath, published StrengthsFinder 2.0 in 2007 to help individuals discover their natural talents.  According to Rath, people do not have the opportunity to excel daily, for they concentrate on their weaknesses rather than developing their strengths.  The book includes an assessment tool that readers use to determine and build on their five most important talents.

Business leaders continue to develop skills throughout their careers, and the bestsellers provide wonderful resources to “sharpen the saw”, as Covey advised in Seven Habits of Highly Effective People.

Great books filled with invaluable advice arrive regularly in bookstores and libraries, and the bestseller lists often point the way to great reads filled with solid advice.  Have a look and see what you can learn about business and money.

Business Management in Perth – habits to avoid

Surprisingly destructive habits you should avoid in business management

Business management in Perth, success is largely dependent upon the behaviour of the business owners, so check out these destructive habits and if any seem familiar, try to work out strategies to overcome them as they will inhibit the potential success of your business.

Business owners want to have a hand in every aspect of their start-up business.  This is understandable, as many owners are passionate about their business, causing them to spend long hours at the office and working hard every hour of every day. Unknown to them, these destructive habits can lead to negative outcomes.

Are you in business management in Perth? Then you must avoid these habits, despite the allure of their perceived short-term benefits.

1. All work and no play

You’re probably under a lot of pressure from your investors, your family, or even yourself.  This pressure is magnified if your product is brand new and thus untested. The pressure and need for success can make you believe that your leisure time is a waste of time and seemingly better spent on your business management in Perth.

The fact is that you still need to take time out to relax for two important reasons. The first is that lack of relaxation can lead to burnout, resulting in lost days and reduced output. The second is that creativity actually comes from a place of enjoyment. You may find your creative output limited if you spend all your time looking at documents, numbers and business management in Perth.

Set aside time for more leisure activities.  Play games, take in a movie or visit an art gallery.  Whatever you enjoy, go and do it!

2. Multi-tasking

Business owners naturally want to make sure that every part of their business functions. Every little aspect is of interest to them.  They juggle various duties at the same time, multitasking as best they can.

This seems like a good idea, until you realise that a lot of things require and deserve your undivided attention. Over time this can cause small problems to arise which can easily snowball into larger problems, affecting overall efficiency and business management in Perth.

Focus on finishing one task at a time.  If you find that you need multiple things done at the same time, delegate.

3. Mico-managing your staff

You won’t necessarily know every one of your staff well. It takes time to build rapport and develop trust,  so don’t micro-manage them.  Instead, give them an opportunity to do their jobs and show you what they are capable of doing.

4. Being ever present

Some business owners think that the business cannot function without them always being present and like to have a hand in every aspect to ensure that things go according to plan.

You might be thinking of doing the same because, in your mind, it’s worth it.  In practice, however, things are different. At some point you’re going to have to pay attention to the tasks that actually require your presence and trust your staff to handle the rest.  Otherwise, you may end up burning yourself out.

5. Burning the midnight oil

You may be tempted to work very long hours in the hope that your start-up business will generate profits sooner, but before you do that, take a realistic look at what you can achieve during the day. While there are some instances where burning the midnight oil can improve results, it isn’t always the case and can be detrimental to your business.

A business owner’s success revolves around efficient use of their time.  There’s only so much a person can do in one day without running themselves into the ground.  Consider the damage this can do to you and to your business in the long run.

If you need help with Business Management in Perth, call us today on 9204 3733 or  Contact Us – we will be happy to help.  We can offer our Management Consulting service which can assist you.

Business Management in Perth – managing people

8 Ways to Manage People Better

One of the secrets to great business management in Perth is good people management, which comes through experience.  Courses will teach you the theory, but there is no substitute for the day-to-day practice of managing staff and their issues.  Giving yourself a head start with a common sense approach and a healthy respect for everyone you deal with will help develop a happy and productive work place.

1. Don’t micro-manage your staff.  They were hired because you believed they could do the job, so let them do it.  Give them clear instructions, encourage them to ask for your advice if they are unsure about any issues, and provide praise for jobs done well.

2. Take the time to get to know your staff.  Understand that they have lives outside of work and that personal and domestic issues can’t always be left at the work place door.

3. Don’t ask staff to perform the impossible or to take risks you wouldn’t take.  Talk it through and work it out together.

4. Listen to their suggestions about improving tasks undertaken on a daily basis.  Give their suggestions careful consideration as they very often make a big difference to good business management in Perth.  Reward staff when their ideas generate business, save money or increase productivity.

5. Put the right teams together.  A good team is more than the sum of its parts.  Be alert to signs of tension and disagreement in teams, especially if anyone seems constantly unhappy.

6. Cultivate an atmosphere of openness, not fear.  If staff feel they can approach you regarding any problems, they are more likely to broach issues early, rather than covering them up and hoping for the best.

7. Give staff opportunities to develop their skills.  Your retention levels will be better if staff feel they are learning and growing in a job with good prospects of career development.

8. Be approachable, but stay professional.  You are a manager, not a friend, so be clear as to where any lines need to be drawn.

A good staff manager can make or break a business.  Review and hone your people skills as an ongoing process.  Don’t expect miracles from your either your staff or yourself.  They are only human – and so are you.

If you need help with Business Management in Perth, call us today on 9204 3733 or  Contact Us – we will be happy to help.  We can offer our Management Consulting service which can assist you with Business Management in Perth.