Unpacking Investment and Education Bonds

As parents, we all want the best for our children, and one of the most important things we can provide them with is a good education. However, with the rising costs of education in Australia, it can be challenging to ensure that our children receive the education they need and deserve.

In 2023, the Cost of Education Index report by Futurity Investment Group revealed that the average cost of a “free” government school education is actually $80,000 when you account for the hidden costs like excursions, devices, tuition, uniforms, and more. This means that parents need to be prepared for the true cost of education, which can be much higher than expected.

So, how can parents prepare for the cost of education? One solution is to use an education bond, which is a flexible savings account that offers tax benefits when used to fund education expenses. Education bonds allow you to contribute money over a period of time or with a one-off lump sum, and your contributions and earnings are protected from creditors. The investment earnings may be taxed at a lower rate (depending on your tax bracket), like superannuation, and the tax is refunded if/when the investment earnings are used to fund education expenses.

There are currently over 30 investment options for education bonds, including well-known managers like Vanguard, Dimension, Perpetual, and Australian Ethical. You can pick and choose from pre-set portfolios or design your own. You can open a savings plan with as little as $1,000 or contribute a lump sum of $5,000 and never add anything else. However, it’s essential to work with a financial adviser to determine the best strategy for your financial goals.

It’s important to note that education bonds are just one of the many ways to prepare for the cost of education. Other options include setting up a savings plan, investing in property, or using preferential tax structures like family trusts. It’s essential to work with a financial adviser to determine the best strategy for your unique situation.

Remember, it’s never too early to start preparing for the cost of education, so reach out to a trusted financial adviser today to start planning for your children’s future.

At Thrive Financial, we help people create security for themselves and their families. We understand that everyone’s situation is unique, so the information provided here is general advice. For advice tailored to your specific situation, it’s essential to speak to a qualified professional you can trust. Our team at Thrive would love to hear from you and help you make the best decisions for your family’s financial future. Speak to us today.

Be awesome,

Rachael Yurko

Principle and Senior Financial Advisor

Wealth Preservation Strategies for Successful Business Owners

Wealth Preservation Strategies for Successful Business Owners

Running a successful business often comes with the reward of financial prosperity, but it also introduces complexities in managing and preserving that wealth. For business owners, wealth preservation isn’t just about saving; it’s about safeguarding what you’ve built while planning for growth and legacy. Here, we explore key strategies to help you protect and optimize your wealth.

1. Diversify Beyond Your Business

It’s common for business owners to have a significant portion of their wealth tied to their enterprise. While this shows confidence in your business, it also concentrates risk. Diversifying your investments into other asset classes—like property, shares, or managed funds—spreads risk and creates additional income streams that can buffer against market or industry downturns.

2. Establish a Solid Asset Protection Plan

Protecting personal and business assets from potential liabilities is crucial. Strategies may include:
Setting Up Trusts: Family trusts or discretionary trusts can shield personal wealth from business risks and offer tax advantages.
Structuring Your Business: Consider using company structures that limit personal liability, such as proprietary limited companies.
Insurance: Ensure you have comprehensive insurance coverage, including key person insurance, business interruption insurance, and income protection.

3. Optimize Tax Efficiency

Tax planning is an essential element of wealth preservation. As a business owner, there are several ways to reduce your tax burden:
• Leverage small business tax concessions.
• Contribute to superannuation for long-term, tax-efficient savings.
• Explore tax-effective investment strategies such as negatively geared property or dividend-paying shares. Working with a qualified adviser ensures you’re not leaving any opportunities untapped.

4. Plan for Succession and Legacy

Whether you plan to sell your business, pass it to the next generation, or retain ownership, having a clear succession plan is essential. A succession plan ensures continuity, protects the value of your business, and aligns with your long-term wealth goals. Key steps include:
• Valuing your business accurately.
• Documenting a formal succession plan.
• Communicating intentions with stakeholders.

5. Incorporate Estate Planning

Estate planning isn’t just about writing a will; it’s about ensuring your wealth transitions seamlessly to future generations. Key considerations include:
• Establishing testamentary trusts to protect inherited wealth.
• Planning for tax implications of transferring assets.
• Reviewing and updating beneficiary nominations on superannuation and insurance policies.

6. Work with a Trusted Wealth Adviser

Navigating the complexities of wealth preservation requires expert guidance. A wealth adviser can help you:
• Create a tailored financial strategy.
• Review and adjust your plans as your business grows.
• Monitor your investments and ensure they align with your long-term goals.

7. Build an Emergency Fund

Even the most successful businesses can face unforeseen challenges. Having a robust cash reserve ensures you’re prepared for unexpected costs without dipping into long-term investments. Aim to set aside at least six months of business and personal expenses in a readily accessible account.

8. Stay Informed and Agile

Markets, tax laws, and personal circumstances evolve. Regularly reviewing your financial plan and staying informed ensures you’re well-positioned to adapt. Work closely with professionals who understand the latest developments and can tailor advice to your unique needs.
In Conclusion
As a business owner, you’ve worked hard to achieve financial success. Preserving your wealth requires a proactive and strategic approach that balances growth, protection, and legacy planning. By diversifying investments, optimizing tax efficiency, and working with expert advisers, you can secure your financial future and enjoy the rewards of your efforts for years to come.
For more personalized advice on preserving and growing your wealth, contact us today. We’re here to help you thrive.

General Advice Disclaimer: The information provided in this blog is general in nature and does not take into account your personal financial situation, objectives, or needs. You should consider whether the information is appropriate to your circumstances before acting on it. For tailored advice, please consult a qualified financial adviser.

Thrive Financial

Phone: 1800 431 213

1/21 Empire Crescent Chevallum 4555 QLD

ABN 80 346 511 003

The Trustee for The Yurko Family Trust T/A Thrive Financial Planning | ABN 80 346 511 003
Corporate Authorised Representative 000449875
Beryllium Advisers Pty Ltd | ABN 30 646 510 769 | AFSL 528250

General Advice Warning: The information and advice contained on this webpage and website has been prepared for general information purposes only and does not take into account your personal objectives, financial situation or needs. It is not intended to provide commercial, financial, investment, accounting, tax or legal advice. You should, before you make any decision regarding any information, strategies, or products mentioned on this website, consult a professional financial advisor to consider whether it is suitable and appropriate for you and your personal needs and circumstances. Product Disclosure Statements contain information necessary for you to make a decision whether or not to invest in financial products mentioned on this website. You should also obtain and read this document prior to proceeding with any decision to purchase a financial product. Although every effort has been made to verify the accuracy of the information contained in this document, Thrive Financial, its officers, representatives, employees and agents disclaim all liability (except for any liability which by law cannot be excluded), for any error, inaccuracy in, or omission from the information contained in this document or any loss or damage suffered by any person directly or indirectly through relying on this information.