Ten investing truths

Tax effective investing

Don't invest to save tax. Invest to make money

It makes sense to consider the tax implications of your investments. However, one of the easiest investment traps to fall into is concentrating on saving tax and forgetting why you invested in the first place - to make more money.

Be wary of tax schemes

Over the years, a large number of investors have been burnt by rulings from the Australian Tax Office (ATO). Some investors have had tax deductions disallowed by the ATO while others have been fined for their part in illegal tax minimisation schemes.

Either way, the results can be very costly. It is worth discussing any tax-effective investment with your tax adviser or accountant before investing.

Take advantage of tax incentives

All this doesn't mean you shouldn't take advantage of tax breaks. They're designed to give you an incentive to invest a certain way.

Do a quick review of some practical ways to make your investing tax-effective.

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