3 questions lawyers can ask when in receipt of a bonus or profit distribution
Periodically, some lawyers will be fortunate enough to receive a bonus, or if a business owner, profit distribution, as additional amounts of money for themselves.
What is fascinating, is often people will have entirely allocated and ‘spent’ this money before it even arrives.
Here are three questions aimed at assisting you to avoid this situation by maximising the utility of such good fortune.
1) What percentage of my bonus (or dividend) will I use to improve my financial situation and what percentage will I spend?
Decide beforehand what component, even small, you will allocate to improve your financial situation.
You owe it to yourself to make your hard work count in actually building wealth. Imagine the impact of doing this on how soon your home loan is repaid over time. Imagine the impact of doing this on your investment portfolio in 1 year, 5 years and 10 years.
2) At this point in time, do I wish to invest in myself?
Be it a couple of insightful books that make you a better leader or people person, a subscription to audible.com, a course to master communication and EQ skills or further traditional study, investing in yourself can be valuable. Particularly if it makes you more employable or directly increases your income earning capacity.
3) For the funds I am going to save or invest, how will I put this to good use?
Most of us have competing financial objectives, so careful consideration of this is a great idea. It may be paying down mortgage debt or getting rid of that credit card balance and creating a cash buffer. It may be starting an investment portfolio or adding to your superannuation account. Or a combination of these.
Shawn Achor has described it well when he said ‘common sense is not common action’.
Many unfortunately have too little to show for their hard work. Prudent money management can get lost in the hustle and bustle of living a busy contemporary life.
At times it pays to seek trusted and considered advice, so that you can feel the comfort and peace of mind in knowing you are striking the right balance between living well now and being able to afford to live well in the future.
Please contact us if we can be of assistance.
About the author
Sam Gray is principal adviser and director of Incito Wealth. Sam runs Incito Wealth with passion and an innovative heart-centred and purpose-driven approach, with the highest intent of serving and inspiring people to better life outcomes. Sam is particularly keen to listen well and cares about your well-being, both financial and otherwise. Sam is author of Money Mastery: the wise sage and the money journey, available on Amazon.
General advice disclaimer: The information provided (including taxation) is general in nature and may not be relevant to your individual circumstances. You should refrain from doing anything in reliance on this information without first obtaining suitable professional advice.
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The views expressed in this article are solely those of the author; they are not reflective or indicative of Millennium3 Financial service’s position and are not to be attributed to Millennium3. They cannot be reproduced in any form without the express written consent of the author.
Incito Wealth Pty Ltd is a Corporate Authorised Representative of Millennium3 Financial Services Pty Ltd ABN 61 094 529 987 AFSL 244252
Disclaimer: Millennium3 Financial Services Pty Ltd ABN 61 094 529 987 AFSL 244252. The information provided in this document is general information only and does not constitute personal advice. It has been prepared without taking into account any of your individual objectives, financial solutions or needs. Before acting on this information you should consider its appropriateness, having regard to your own objectives, financial situation and needs. You should read the relevant Product Disclosure Statements and seek personal advice from a qualified financial adviser. From time to time we may send you informative updates and details of the range of services we can provide. If you no longer want to receive this information please contact our office to opt out. The views expressed in this publication are solely those of the author; they are not reflective or indicative of Licensee’s position, and are not to be attributed to the Licensee. They cannot be reproduced in any form without the express written consent of the author.
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General advice disclaimer This information (including taxation) is general in nature and does not consider your individual circumstances or needs. Do not act until you seek professional advice and consider a Product Disclosure Statement. The views expressed in this publication are solely those of the author; they are not reflective or indicative of the licensee’s position and are not to be attributed to Millennium3. They cannot be reproduced in any form without the express written consent of the author. Furthermore, the information on this website is for Australian Residents only.