Hello Fellow Investors,
Many business owners pour everything into their business, to the extent of overlooking their personal financial security. While this focus can drive growth, it also creates vulnerability. If something goes wrong, your entire livelihood could be at risk.
Below are some key ways we can assist with financial planning for business owners and self-employed individuals, so that you can enjoy the benefits of building wealth, outside your business.
4 Strategies for Building Wealth for Business Owners
1. Asset Protection
Self-employed professionals face a higher risk of litigation (yes, even here in Australia). If you’re sued, your business assets can be exposed. A Financial Planner can help structure investments, so they’re protected – for example, through strategies such as superannuation or family trusts. This ensures you have a safety net in case of unexpected legal challenges.
2. Diversification
People tend to invest in what they know. A real estate agent is more likely to invest heavily in property, making both their income and wealth dependent on one market. If that market crashes, the impact is severe. The benefit of engaging an expert in financial planning, like the team at Fleming, is that we can help spread your investments across different asset classes, reducing risk and avoiding the “all eggs in one basket” scenario.
3. Tax Planning
It’s common for self-employed individuals to leave profits in the business for a lower tax rate. However, this can lead to a massive tax bill when funds are withdrawn for retirement or personal use. A Financial Planner can implement strategies to minimise the tax you need to pay – through superannuation, for example.
4. Liquidity
Business assets, like inventory, can take time to convert into cash. If you need funds quickly, this delay can be stressful. We can help you build liquid investments that can be accessed promptly. Unlike property – ever tried to sell 5% of a house?! – an investment portfolio allows you to make partial withdrawals, and is better for providing flexibility during emergencies and to cover any surprise expenses.
Ready to secure your financial future beyond your business?
At Fleming Financial Planning, we have a wealth of experience in assisting business owners through the financial maze – from buy and sell agreement and key person insurances, right through to retirement planning and building wealth.
If you’re self-employed or a business owner, please reach out to our Brisbane-based financial planning team on (07) 3391 7342 for a free, no-obligation 60 minute consult. We look forward to meeting you.
Joshua Napier
(Provisional Financial Planner)