Hi Everyone.
I am a professional derivatives trader, although I am somewhat poorly versed on the topic of personal finance. I have never really done any study in the way of finance and I am hoping to gain some clarity here from others who are in a similar position to me.
My Situation
- Salary & bonus: $400k+ p/a
- Savings: $250k (currently in cash acc earning 4.x%. Clearly suboptimal, but I am quite time-poor)
- Renting, no investment in property.
- No current ABN
- Some pieces of current trading methodology (both technical and fundamental) can be applied profitably (tested) to Australian equities and are not massively sensitive to commission structure. I am also privy to some high quality equity-centric publications which contain relatively high quality advice.
- Currently run profitable semi-automated sports trading strategies on Betfair (needs no more than $50k invested for ~$50k return p/a, starts to scale poorly from this pt, but could likely be adjusted upwards, at diminishing ROI). This is not currently as passive as I would like, but has room for more "blackbox-ish" implementation.
To the main question:
What are some good ways to minimise my Income tax using my current skillset within the scope of my limited amount of free time? I obviously have a fairly large tax bill
I am thinking about the following:
- Salary sacrifice into SMSF. Majority in equities, both medium and longer term methodologies. I have enough capital to make this viable, yes? How much organisation/book-keeping does this require?
- Investing in Property (although it would take some convincing for me to believe that this is viable in the current climate).
- Finding some larger scale deductions that are either: a) related to my current occupation, or b) Allow me to get "fun things" at cheaper prices (perhaps cars etc?)
- Leveraging my sports betting and trading strategies as part of a separate business (any advantages to me in having an ABN and structuring things in a certain way? I'm massively uninformed in these areas. CFDs are also a viable vehicle for some of my trading strategies)
- Anything else that allows me to feel like I'm not just lighting too large a % of my income on fire.
At some pt, I will find time to do some research, but I figured that there would be posters here who are much sharper with respect to personal finance / taxation. If I have come across sounding like an idiot, it is because - in some areas - I most certainly am!
Cliffs
Given a high income and respectable level of savings (and desire to remain located in Sydney), I am just looking for a small prod in the right direction to efficiently handling my finances - especially with regard to:
1) How I could better utilise my existing skills with the use of an ABN or SMSF...or something.
2) Whether, at my income level, you guys feel that property offers me a +ve return (say, over the next 5 years) and if so, how to maximise the value of such an investment. Particularly potential tax offsets.
3) What sort of larger scale deductions/methods I can use to manage my tax bill.
4) If a business unit's primary operation is "gambling", how are losses handled? (I am fairly sure of the answer to this already, but am not sure about whether or not deducted losses are available when the entity is not a "professionally gambling individual", and is instead a business.
I have been somewhat general thus far, but am eager to participate in any discussion on the way forward. Obviously, if this is in the wrong sub-forum, feel free to move it to a more appropriate location. I would love it if this discussion was of use to people other than myself, so any advice is appreciated, even if it is not specific to my situation...I hope that I have provided enough info.
Thanks in Advance!
I am a professional derivatives trader, although I am somewhat poorly versed on the topic of personal finance. I have never really done any study in the way of finance and I am hoping to gain some clarity here from others who are in a similar position to me.
My Situation
- Salary & bonus: $400k+ p/a
- Savings: $250k (currently in cash acc earning 4.x%. Clearly suboptimal, but I am quite time-poor)
- Renting, no investment in property.
- No current ABN
- Some pieces of current trading methodology (both technical and fundamental) can be applied profitably (tested) to Australian equities and are not massively sensitive to commission structure. I am also privy to some high quality equity-centric publications which contain relatively high quality advice.
- Currently run profitable semi-automated sports trading strategies on Betfair (needs no more than $50k invested for ~$50k return p/a, starts to scale poorly from this pt, but could likely be adjusted upwards, at diminishing ROI). This is not currently as passive as I would like, but has room for more "blackbox-ish" implementation.
To the main question:
What are some good ways to minimise my Income tax using my current skillset within the scope of my limited amount of free time? I obviously have a fairly large tax bill
I am thinking about the following:
- Salary sacrifice into SMSF. Majority in equities, both medium and longer term methodologies. I have enough capital to make this viable, yes? How much organisation/book-keeping does this require?
- Investing in Property (although it would take some convincing for me to believe that this is viable in the current climate).
- Finding some larger scale deductions that are either: a) related to my current occupation, or b) Allow me to get "fun things" at cheaper prices (perhaps cars etc?)
- Leveraging my sports betting and trading strategies as part of a separate business (any advantages to me in having an ABN and structuring things in a certain way? I'm massively uninformed in these areas. CFDs are also a viable vehicle for some of my trading strategies)
- Anything else that allows me to feel like I'm not just lighting too large a % of my income on fire.
At some pt, I will find time to do some research, but I figured that there would be posters here who are much sharper with respect to personal finance / taxation. If I have come across sounding like an idiot, it is because - in some areas - I most certainly am!
Cliffs
Given a high income and respectable level of savings (and desire to remain located in Sydney), I am just looking for a small prod in the right direction to efficiently handling my finances - especially with regard to:
1) How I could better utilise my existing skills with the use of an ABN or SMSF...or something.
2) Whether, at my income level, you guys feel that property offers me a +ve return (say, over the next 5 years) and if so, how to maximise the value of such an investment. Particularly potential tax offsets.
3) What sort of larger scale deductions/methods I can use to manage my tax bill.
4) If a business unit's primary operation is "gambling", how are losses handled? (I am fairly sure of the answer to this already, but am not sure about whether or not deducted losses are available when the entity is not a "professionally gambling individual", and is instead a business.
I have been somewhat general thus far, but am eager to participate in any discussion on the way forward. Obviously, if this is in the wrong sub-forum, feel free to move it to a more appropriate location. I would love it if this discussion was of use to people other than myself, so any advice is appreciated, even if it is not specific to my situation...I hope that I have provided enough info.
Thanks in Advance!
