Understand this before building your portfolio
Whether it’s your profession, your business or your own personal finances, what will set you apart is your bottom line.
Bottom line is the final total of an account or balance sheet. You may have 3 or 4 property’s portfolio, or a six-figure income; but if your yearly account statement is still in negative cashflow, you need to look thoroughly at your debts and assets.
Here are 4 basic steps to look at when planning for your next financial year –
1. Know Your Fixed Costs
Fixed costs for your own expenses can include monthly rent or mortgage, weekly groceries shopping, car-loan etc. It is a kind of expense that will not change with time. Make sure you have full account of your fixed cost and consult with your partner, if you can reduce your fixed cost in any shape or form
2. Know Your Variable Cost
This is the cost you usually don’t account for e.g.. a weekend holiday, sudden repairs to your car, money spent at your friends party etc. Not all variable costs are necessary, so it gives you a great opportunity to save some expenses from your variable costs.
3. Know Your Borrowing Limit
There are various online calculators available to calculate your burrowing capacity such as NAB, ANZ, Westpac offers online tools for calculating burrowing capacity based on your income and expenditure. You can also speak to one of our friendly mortgage brokers to better understand your financial situation by clicking HERE. It is important you know how much you can burrow so you are not under bad debt
4. Know Your Tax Deductibles
Based on your profession, you may be entitled to some tax exemptions. Make sure you check https://www.ato.gov.au/ to understand how you can claim tax.
