Today in episode 019 I tried very hard to talk to James Garza about how to make money investing business profits and avoid paying tax but he kept talking about Donald Trump! You see James’ family are Mexican and he has a bit of a soft spot for Donald, but I eventually got him round to talk about money.
Alright Jim 😉
Although the subject this week is not related to marketing, it is something that every business owner needs to know, and address, otherwise you’re handing over your cash to the Tax man. So I hooked up with James for chats.
When it comes to pensions, most of us never really know where our money is going or who’s doing what with it. I know you probably switch off when the subject of pensions arise, but how James Garza and his team at Trillium TA do it you’re bound to get switched on.
Check out this episode and find out how to take back control of your money and keep the tax man’s pesky mitts of your dough.
In This Episode
- Avoid handing over your business profits to the Tax man
- Why pension schemes from large corporate don’t serve you
- Learn about setting up and managing your own pension
- How you have total discretion about where your contributions go
Links Mentioned In The Show
- James Garza LinkedIn
- Trillium TA (Trading & Education Platform)
- How To Make Money In The Stock Market
- Trillium (Pensions)
- Pension Investment Calculation Spreadsheet
Notes From The Show: How To Make Money Investing Business Profits
Although a bit left of field from the subject matter I normally cover, I thought it was a good topic considering most if not all of you listening are business owners, or have ambitions to be.
I’ve had a couple different personal pension schemes running over the years, and it always bugged me that I had little or no control over where my money was invested.
I had heard about self administered schemes but knew very little about them. I also wanted to know how to make money investing directly in stocks and shares.
I met James at a TICN evening event where he explained how self administered pension schemes worked. They allowed business owners and directors set up pensions that they could actually manage themselves.
Turned out I could set up a pension or PRSA, all completely above board, move my existing schemes into that and manage the entire pot myself via my own trading account!
“Two birds one stone, great” says I! and now I’m a millionaire….
Well, ok I’m not quite, I’m actually a fair bit off that level 🙂
You Can Even Invest In Property
I liked the idea of being able to take control of my own money and decide where my pension fund was invested. In fact, It turns out you can even hook up with you partner’s fund and buy property too.
Tax and pension regulation vary across the world, however the basic principle of investing for the future is the same. For business owners there is a significant advantages available that are not available to employees.
I now invest my pension funds via my own brokerage account based in the US and invest in companies like Cisco, Apple and Microsoft. Solid and secure companies that perform well over the long term.
I’d highly recommend talking to James if you’re looking to take control of your financial future. Check out James’ contact details above.
Here’s A Few Words From James
I first began learning how to make money investing in stocks and shares while compiling what’s known in the States as the 401K, it’s similar to a pension here.
I really enjoyed it and others began to ask me what I was doing and if I could help them. That was when I started investing in the stock market.
No matter what budget legislation arises over time, every business owner needs to be contributing to a pension investment scheme. It has become clear in recent years that the global economy is picking up, (even despite the recent Brexit situation). So if you have not made contributions to your pension in recent years, you really need to kick that off again.
Self administered pension contributions will not only help you invest for the future but possibly reduce your tax bill too.
Here are a few points that help unpack this a bit more:
- Contributions to pension reduces your personal and business tax bill.
- Say you are 35 year old self-employed with 50k pa net income and not contributing to any pension plan. Your maximum pension contribution is 20%*, which is €10,000 for that tax year. The actual contribution would be €6,000 after tax relief if you are at 40% tax rate or €8,000 if you are at 20% tax rate. Pension contributions are still subject to USC and PRSI.
- Growth in a pension grow tax free.
- State pensions are subject to changes in pension laws with each budget. Maximise your pension contributions and grow your pension to maintain a quality of life that you are accustomed to.
- Self-administered or self-directed pensions allow you to have direct control of investment policy and management of the funds.
- Defined benefit pension is one in which you will receive a monthly/annual income at retirement based on your current salary. The benefit is guaranteed by the company you work for. The ‘pros’ of this is you know what you will get at retirement and the ‘cons’ is the benefit remains as long as the company remains.
- Defined contribution pensions are ones which you know the amount you contribute but do not know the monthly/annual income you receive when you retire. In this scenario your income is based on the amount at retirement and return on your investment. The ‘pro’ is that you can get a great return on your funds, however the ‘con’ is not knowing what income you will receive at retirement till the retirement date.