WHERE he was at – Roger had worked hard at his business and his expertise at his craft had been rewarded with the TAFE College asking him to teach his success tips part-time to up-coming students. His business was steady and a good team of staff meant he could take a day a week and do the teaching – it was rewarding to be able to “give back” and feel appreciated and respected by peers and young future stars.
Unfortunately, he had been diagnosed with bowel cancer years ago. Treatment was successful so far, and in remission he worked at re-organising the business and finding a better manger to tidy up the work-flow while Roger worked on the finances and get the profitability up from where the previous manger had let it fall while Roger was away getting treatment.
Maybe it was Roger’s fault for letting the stress and worry get to him instead of trying to talk it through with his wife but she was less interested in the technicalities of the business and had her own work and life issues. He knew they were growing apart. He had planned not to let it happen this second marriage. He also didn’t find his business advisors were helping either. Maybe it was both their fault that the relationship was starting to strain, and it frustrated Roger even more.
What he WANTED to have – Now in his 50’s he knew he was slowing down, but teaching wasn’t so taxing on his energy, even though he did his best to keep fit. The 2 boys from the first marriage were settling down now and he wanted to ensure they would have the benefit of his estate. His former wife had not forgiven him and he was not keen on her new husband and his children having access to his estate. He was concerned that if there was a relapse, time would be short as doctors said the cancer could come back with vengeance. He sought our advice – the financial planner had also been his insurance broker for over 20 years – we arranged a meeting with a solicitor and he sorted his will out. He was told that his super would not be automatically part of the estate or will on death. He wanted to deal with that later, and look at a setup of super that could incorporate its own “Will”. For now – growing the business and growing his super was his next priority. The former divorce had an ugly settlement and he lost a chunk of his super. He wanted to grow the $90,000 left in as much as possible and had some time to be involved. Discussions with tax agent and the planner confirmed that a self-managed super fund (SMSF) would be suitable for the control, time and interest he had, to manage it well. He also wanted to be able to self-fund his retirement.
What it will COST – If he were to keep cancer-free, he wanted to live and self-support as much as he could when he retired. He was looking for a $35,000 per annum income. He would possibly need ongoing medication, but if he relapsed and got sick he wanted an extra $10-20,000 to cover medical expenses each year.
What he would NEED – If a conservative return of 5% was expected, he would need at least 20 times the comfortable income aimed for. That would be $1,000,000, to achieve the upper income, $50,000. $800,000 would give him $40,000 per year. If he could grow the value of the franchise to $1mill to sell he would have the $1mill, and he could cash in the super, a lump-sum, and help his boys out. There would be considerations with gifting that still needed to be reviewed for the best taxable outcome though.
What to do NOW? – He had already begun on the business re-vamp. The former manager had moved on and Roger asked around to determine if interested people were looking, and came with high recommendations. He found the perfect manager through his networks and contacts. He fitted in perfectly. Roger had another appointment with us and we reviewed the super with the financial planner. He had been researching about learning investing and was booked to do a couple of courses with the Australian Stock Exchange. He wanted to be involved and that worked with our approach to educate people to “self-advise” and be involved by being informed.
His strategy was to grow his estate via the business and his super in SMSF which had the tax advantaged-environment. We ensured he understood his responsibilities as a trustee of an SMSF and how we would do most of the compliance work efficiently and expertly for him. We also explained that since we don’t charge for set-up (which is not tax-deductable) but only an annual administration fee which was 100% deductable to the SMSF, he had another tax advantage. He was pleased. All he had to do was get his tax file number, and copies of his super fund statements, driver’s licence and passport for 100 point ID, and we were ready to start. He had a perfect structure (SMSF) and he had us for the support. Strategy-Structure-Support.
Interested to know what self-managed super (SMSF) is all about, how to get setup FREE and if it is for you? We have FREE seminars and bonuses every month – Self Managed Super Fund Roadmap (all you need to know) for the next monthly event, see 1 SMSF – FREE Seminars or call us 0407 361 596