Help with strategy - $1mil net passive income in 10 years...

I thought this 'loophole' was closed by the ATO sometime ago already?

 

Ato doesn't make legislation but administers the tax law. Currently can distribute to Minor children but they are generally taxed on incomes over $416 pa starting at 66%

 

I'm sorta with @Westminster on this one - you may need to consider develop and hold strategies but possibly not residential property (small commercial/industrial/retail sites - sub-$3m properties).

You may need to seek a wealth management mob for high-wealth individuals.

With current income like that, insurance bonds may be a consideration - 10 year timeframe, monthly ability to add to the balance, tax free after 10 years.

 

What's the industry, how likely is this income to continue indefinitely?

 

Industry - transport & mining

income will be consistent for 5-8 years.

Developing may be an option so long as its project managed by a professional...

 

Not realistic figures I think.
What about tax?

 

If you only have 5-8 years then it's going to need to be a pretty aggressive and somewhat higher risk ideas but even then it's not likely to raise you the $1m pa that you want.

You need to work it backwards and forwards and you could probably get something that will work for $200k nett pa much more easily than $1m.

Why $1m? It's an awful lot of money and even if you were to marry the world's best chick and have 10 kids you don't need that much.

 

Developing property is going to be a big learning curve at a time that you're most likely better off focusing on your core business. Develop property after the 10 years if you have the desire.

Unless it's really something you'd love to do, I'd find something that allows you to do what you actually love, otherwise you're just swapping one job for another one. And trying to learn to develop while running the business you currently have could have both ending in disaster.

Why $1m? Is that just an arbitrary number that you've picked or have you spent the time to work out exactly how much you'll need to do what you want to do?

 

Unless of course you meet a chick like Westy! <3

pinkboy

 

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That tax bill tho

 

I completely get your point..i guess the first thing that comes to mind is I'm sure there are at least a few of us on here who have passed the 'all we need ' stage and are just pushing along for the 'all we want' stage ..

 

At 26 on $30k a month NET before tax your making a killing already. If it increases to $100k Net per month as someone above said you need to be teaching us how to make that.

You are probably in the 0.001% of the entire population as you stand with this income. What industry are you in? Need to start a business doing what you do.

 

I think we have a professional hitman in our midst.

 

I respect all his achievements and have no issues & agree with whatever strategy he follows!

 

Apart from rumors of sudden Martian invasions and the unexpected one sided effect of uncertainty ,maybe aim for paying one million in tax rather the having one mill in sit-down money,just like driving across a 4wd shallow river with a 2 foot average ,every things going well till you drive into the 6 foot washout..

One would have thought you are already a professional to manage something like this..

 

Where? Can I come too?

 

What about buying big parcels of land in outer growth areas? With plans to build (commercial) later down the track.

Eg 5-10 acres @ Badgerys Creek? Possibly a market farm?

The net loss could offset some tax and the area might become a commercial precinct in the next 10 years.

 

You need a longer projection than 10 years to do well out of that and you need to know what your buying. You'll be competing against institutional investors with pockets a lot deeper than yours.

You need a really good boring option. here is one: Draw a 5km circle around the cbd's of Sydney and Melbourne. Buy solid terrace houses within those areas. Never a shortage of people looking to live there, they are not making any more of them. growth is consistent year after year. You'll need to fund the shortfall for the first 5-10 years but that should be no problem by the sounds of it.

 

I guess the first thing you need to tell us

- How much hands on do you want to be with investment process. Do you want to be actively involved (High risk potentially more rewarding) or want to be passive (low risk but average returns).

- If you want to be hands on how much prior knowledge and experience you have. If you are a newbie my suggestion is forget about active strategies or make sure you take baby steps.

- Lastly, after 10 years say you hit your goal. What kind of lifestyle do you want? Do you still want to be actively involved managing your investments or do you want to forget about it and just enjoy life?

I think only you can answer some of these questions but they are important questions. If you don't answer them now you might not stick to one strategy over next 10 years and keep chopping and changing along the way which can cost you more money down the track.

As others have suggested spend some money and get quality professional advice. And try to find people who have traveled the journey you wish to travel and pick their brains on what works and what doesn't work.

Cheers,
Oracle.