GK & Co. Certified Practising Accountants

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Wealth Creation

Wealth creation is achieved by increasing the real worth of your assets and protecting against the effects of both inflation and taxation.

Your portfolio should, ideally, include investments where the primary objective is to provide growth over the medium to long term. When considering the most suitable investments for your portfolio, you should take into account:

the number of years you will hold your investments
your stated financial goals and objectives

Funds can be invested in similar asset classes either within the superannuation environment or outside it. In fact, it may be beneficial to hold a certain proportion of funds outside of the superannuation environment given that current government legislation may change in the future, particularly concerning the concessional taxation of funds within superannuation.

The main difference between these investments is that superannuation investments can provide significant tax benefits. Investments made outside of the superannuation environment are sourced in post-tax income. This means that money earned by you has been taxed at your marginal rate. While you may make post-tax contributions to your superannuation fund, these investments may also be sourced in employer contributions or deductible personal contributions. Of course, a 15 percent "contributions tax" applies at the fund level to all employer contributions and deductible personal contributions. A superannuation surcharge tax of up to 15 percent also applies to these contributions for members whose "adjusted taxable income" (includes these contribution amounts and reportable fringe benefits) exceeds the surcharge threshold. Taxation on superannuation benefits is a further consideration to the extent that it imposes a further layer of taxation on these contribution amounts.

The superannuation environment is particularly suited to investors concerned primarily with growth rather than income oriented investments. Additionally, funds held in superannuation, unlike other non-superannuation investments, can be used in the future to purchase tax-advantaged income streams such as allocated pensions and annuities.

The information above does not consider the particular circumstances of any person, and do not constitute advice. You should not rely upon the information as such. The information provided is intended to be for your interest and convenient only.

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