Update- Tax Effective Income Streams The year 2010 is rapidly coming to a close and we as no doubt you are looking forward to the Christmas break. Looking back on the past year and in fact reflecting back on the past 20 years and I just can’t help but keep agreeing with Warren Buffett and his teacher/mentor the late Benjamin Graham. Investing is all about acquiring quality assets that produce a growing and repetitive income stream. If you can add in some tax efficiency along the way then you are there. Twenty years ago we began investing client’s money into listed companies (shares) using professional managers such as Perpetual and the chart highlights the results. An initial capital amount of $100,000 invested has only increased 5 times (the GFC had a big impact) but the yearly income stream being generated from this investment is now over one third of the original capital invested and it is tax effective. Yes, history is no guarantee of future performance but when investing over multi decades you only have the choice of receiving one or a combination of three income streams: interest income, rental income and or dividend income. Will business (shares) be profitable over the next 20 years? Don’t know but when the only other alternatives are cash and property I will take my chances with Buffett and invest in business. At Newealth we are always looking to support and promote our clients wherever possible and if you have any ideas or comments, please feel free to email me via ‘Contact Us’ at www.newealth.com.au or to call me on +61 2 9267 2322.
17th-December-2010 | 
