Wealth creation for business owners starts with selecting your strategy

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If you are a business owner looking to create wealth you need to have the appropriate strategy before deciding on any wealth creating products.

The suitable wealth creation strategy will depend on your goals, personal circumstances, risk appetite and the stage of your business or businesses.

What is wealth creation?

Wealth creation is a long-term process of accumulating assets, investments and other money-making resources.

Wealth creation foundations for business owners

A comprehensive wealth strategy sets the foundations that help determine your investment decisions.

Being clear on what you want to do with your wealth, including your businesses, is the starting point. Your wealth creation strategy will be different if you are just starting out or approaching retirement. If you have a family business or are a primary producer you may wish to hand over the business to the next generation.

One of the best and most tax advantageous ways to create wealth for individuals and business owners is through superannuation. Setting up the right superannuation fund and concessional contributions helps minimise tax. However, superannuation rules continue to change and there are limits to the amount of tax effective contributions you can make. Most of your superannuation wealth will be locked away until you are around 60 years of age. This can be an issue of you plan to sell your business or businesses early.

The other effective wealth creation structure for business owners is a family trust. A family trust can help share the tax burden among several individuals. It also separates wealth from businesses which serves as another form of protection.

With the foundations set, you can then determine where you will invest your additional cashflow and potentially borrow to build wealth. Most wealth creating investments involve investing in other businesses via shares or in property. Knowing your risk profile is important because investments with a higher potential return carry greater risk.  

Tools for business owners to protect their wealth creation strategy

Two important tools to help business owners to protect their wealth are estate planning and insurances. Your wealth creation and business goals and the stage of your business will again determine the relative importance of these tools.

Having proper estate planning documents in place, such as a will, sets out where you want your wealth to go.

Just like you insure your house or car, it is important to insure your income earning potential, your business and your wealth against unforeseen or unplanned circumstances. Key insurances include business protection, income protection and life insurance.

If you have a mature business, you may not need as much insurance as a younger business owner or someone just starting out in business. Some insurances are available via superannuation. You want to make sure you are not paying more than you need to for insurance.

Experienced wealth advisors and business advisors help create wealth for business owners

A good wealth advisor and business advisor will help you to maximise your wealth. How do you know which wealth creation advisors to choose? Make sure your wealth and business advisors have the experience and ability to help you to:

  • understand your goals and what you want your wealth to enable and achieve
  • establish, review and adjust a sound business and wealth creation strategy and plan to achieve your goals
  • identify, assess and take proactive steps to minimise potential risks and their implications to reduce their impact on your wealth creation
  • optimise your after tax dollars to invest in wealth creation

focus on appropriate growth opportunities by understanding and considering all the factors influencing your wealth – including savings, tax, investments, and interest rates.


Have a question or need help with your wealth creation strategy?

Pitcher Partners Newcastle and Hunter has a team of experienced wealth advisors and business advisors who work together to tailor straight forward, holistic wealth creation advice to meet the specific needs of business owners. We have been helping business owner to create wealth to meet their goals and dream for more than 25 years.

We love questions. If you want to know more about Pitcher Partners Newcastle and Hunter’s private business and family advisory services or private wealth management services, please contact us.

Mark Alexander is a multi-award-winning Private Client Adviser at Pitcher Partners Newcastle and Hunter. A Certified Financial Planner, Mark specialises in wealth management strategies, superannuation, and estate planning for business owners. With more than 25 years of advisory experience, he quickly understands each client’s wealth creation priorities. He explains matters affecting a client’s wealth creation in a simple and straight-forward way – including legal issues, superannuation rules and tax laws.

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