They say that to understand a problem, you need to really stare at it, analyse it and understand it. But sometimes, giving a problem this much attention, is actually the problem in itself. You see, when it comes to the proposed changes to franking credits, people and the media (which in fairness, is just a conglomerate of people) look at the problem too much. People get fixated on the potential ‘economy-damaging consequences’ of meddling with a cornerstone to our economy! They may even bang their fist on the table just thinking about it! But focusing on the changes to franking credits, prevents you from seeing the opportunity which lies beyond. You see, only 5 countries offer franking-credit systems: Australia, New Zealand, Finland, Italy and Mexico. Collectively, they make up about 5% of the world’s publicly investable assets. The rest of the world accounts for $60 trillion worth of public investments. So, the sensible approach to investing to begin with, is not to allow the taxation systems of those five franking-credit-offering countries to determine your investment philosophy. Nor should the treatment around stocks compared to bonds have an overarching influence. At Ascent Private Wealth, we’ve been doing this for years; globally diverse investments with a range of stocks, bonds and property.
So don’t focus on the potential problems too much, because you might forget to look for the solutions.
Are you interested in a free consultation? Click this link and let us schedule an appointment – http://ascentpw.com.au/contact/
Mark O’Toole CFP™