What is your plan?
Starting your own business is an exciting prospect. You are your own boss, you make your own decisions and build something that is truly yours. At the end of the day you have an asset, an asset that you can use for retirement.
It is the dream of all new business owners – using the business you built in order to fund your retirement. As grand as this aspiration is, many have had success in achieving it.
But you wouldn’t call it a proper financial plan would you? A financial hope would be a more fitting term.
A Misguided Belief?
As small business owners you watch where every cent goes. Superannuation becomes a necessary evil, as we try to evade it – sticking by our belief that “My Business is My Retirement Plan”
No one starts a business thinking they are going to fail. But no matter how good you are, how much time and effort you put into it, the sad truth is businesses do fail. In the financial year to 30 June 2020, 1 in every 8 businesses failed to make it through the year*.
And it is often not due to a lack of ability or work ethic: changes in technology, changes in consumer behaviour or just bad luck can often derail small businesses.
Hope for the Best, Provide for the worst
As a small business owner, it is easy to get fixated on the short term. Concentrate on today’s success and tomorrow will follow. As a small business owner myself, I know that feeling too well.
This short term view can also spill over into retirement planning – look after the business today, it will look after me tomorrow.
In order to really put together a proper financial plan, as small business owners you need to separate business and super. You need to see it like any other financial asset. You wouldn’t think an investment portfolio of one asset is a good portfolio. As investors we look to diversify – not all our eggs in the one basket.
The good news is that superannuation provides you with a good plan B. A tax-effective investment that can work in tandem with your business to provide you with a retirement portfolio, in a complete financial plan.
You put so much time, effort and sacrifice into your business. You want to make sure that all of it is worth it and that your retirement plans and that of your family aren’t purely contingent on the value of your business when you retire.
If you would like to discuss how superannuation can be used in your financial plan and how it can complement your business in your retirement portfolio, contact us for a no-obligation Discovery Chat.
Discovery Wealth Advisers – Your Financial Planner in Baulkham Hills.
The views expressed in this publication are solely those of the author; they are not reflective or indicative of RI Advice Group’s position and are not to be attributed to RI Advice Group. They cannot be reproduced in any form without the express written consent of the author. Louella Jorge is an Authorised Representative of RI Advice Group Pty Ltd, ABN 23 001 774 125 AFSL 238429. This editorial does not consider your personal circumstances and is general advice only. It has been prepared without taking into account any of your individual objectives, financial solutions or needs. Before acting on this information, you should consider its appropriateness, having regard to your own objectives, financial situation and needs. You should read the relevant Product Disclosure Statements and seek personal advice from a qualified financial adviser before you act