Tips for doing business in OZ

[Asychee]

The greeks,Italians and asians I am referring to are self employed. An employee cannot inflate their income.

I beg to differ I can think of 5 ways to inflate income. I have shared it with Whistler and some samster that email me before. In my case, i do not have a high level of education therefore i go down to the fundamentals and start with no preconceived(sorry dont know how to spell) notion.

 

[Asychee]

Bro, since you brought up passive income, thought I will share one version of it.

Passive Income & Opportunity Cost

Though passive income is usually defined as initial hardwork yielding income stream for years to come. Typically as you pointed out they are things like rental income and also tiered periodic commissions from Insurance / mortage sales, royalties, dividends from shares etc.

Here is another angle. Do you know why sr executives in banks, blue chip companies etc do not quit and run their own companies. Here is the reason why and despite having large responsibilities

1) No personal monetary risk or commitment as they work for a large firm or MNC
2) There travel & entertainment expenses are sometimes much more than the Annual income. Compute 47 business trips a year, flying Business Class costing $9K USD per trip for air fare and $2000 USD for hotel bill/ tips. local transport for a typical 3 day stay, and opportunity to sight see, meet people from various cultures and going to amazing places, take holidays as side trip. We are talking about $517K USD per year in T&E. All company expenses with taxes.
3) Guess the number of free tickets for family in 1 year to the furthest place on earth.
4) Staying in the comfort of your airconditioned office and just using your brain power to delegate work to staff, provide directions and make strategic decisions.
5) Bonuses up to 70s.

Guess what happens when you are doing all the above and in a line of work that you love? And I am not talking about Sr Management of Companies that travel 1st class. Its just middle management in an MNC that has a global responsibility.

Take another example but this time a professional such as doctor or Engineer who runs his own business but gets paid travel from pharmaceutical companies and large vendors to attend seminars and conferences at exotic locations. Own expenses that are tax deductible.

Some of the best and brightest work for the best companies around the world. That is also the reason why people struggle thru schools, universities pursing degrees and burning the midnight oil.

And its not about money. It about opportunities to travel, meet interesting people, use the huge resources of your company to invent things, build systems, introduce new ideas and help change the world for the better.

Thats opportunity costs. Ever worked for Barclays, GE, Chase etc.

You call do all the above and still have quality time with your kids. Your kids will be boasting about you during the Career Day talk in school, your kids will travel to the most exotic places on god's green earth from the frequent flyer points. They will eventually go to the best schools in the world.

These people would have also invested their bonuses and income in properties, shares, and other people's business and all these are passive income.

The world is your oyster and the best thing that you can do is make sure your kids understand that and go on to realise their full potential.

The majority owner of Fish & Co, the successful seafood based chain of restaurants in Singapore retired as an executive with SIA and has migrated to S Africa to retire on a large plot of land. He has seen the world over 30 years and its only a local company. He does not run the business but his minority partner does. His income is passive income from start to finish. Only looks at the annual P&L.

Just a perspective.

Brother, the perspective is not going to be acheiveable by me. I do not of the bandwidth between my ears for lots of the biz jargon. I belived in real estate as there is a lot i can do to get income. Be it passive or not.

For instance,

Non passive income, i recently put a lease on a house. Pay the owner $1000/ month with a Sercuity Deposit of $500 for a period of 2 years. In turn i rent it out at $2000/month and collect 1 month of deposit and 4 months of advance rent.

Passive Income. I do a lease with an option to own -

My rental house, i do a self finacing, i collect a option of 10% (around $30K). My mortgage is 1200/ month. I collect a rent of $1800 / month. I credit the buyer $300/month to the purchase which is schedule to be concluded within 2 years. In stats, 65 % of this type of arrangement will not work out.

If he dont pay up his rent of time contract is written that the deal would be off and i keep the option $$.

I can repeat this as often as i could.

There are a lot of variation in doing this - at the gist of it. There is a recession and to get credit might be difficult for some. So i become the banker. i would suggest that we capture the opportunity by going with the trend.

This is from my prespective. The world out here is not control by Pappy so the rules of my sandbox is very different from Pappy sandbox.

 

[scroobal]

Great ideas bro. I know a singapore lady who started a migration business by flying to Dubai. I asked her why as I thought her contacts would be better in Singapore. She reasoned that the middle East has a very high transient lower labour as well as an expat co. As Middle East does not give citizenship so easily, she thought it was good place to tap the expat community. She was right. Now too busy to catch up.

I think the tutition is good for specially for spouses who have free time. The rate ranges from 30 to 60 pr/hr and they come to your home.

Good luck with your courses.

some ideas that i have;
- migration agency.
- tution agency.
- property agency.
- internet business. e.g. SEO, affliated reselling program etc..

i'm particularly keen to start my oracle and linux training courses independently.

 

[scroobal]

Its for the future generation, for your kids or our kids. Inspire them, tell them to go for the sky and don't look for limits. Make sure if they have the potential, you push them hard and get them to the best schools possible. Canada like all 1st world countries have excellent schools ans universities. You already brought them to Canada, just make sure they do the best.

Brother, the perspective is not going to be acheiveable by me. I do not of the bandwidth between my ears for lots of the biz jargon.

 

[Asychee]

Its probably that you do not understand. You tend to pick things out of context without reading the whole. You did that with selling food but ignored laywers and accountants. Thats applying selective reasoning which does not make sense.

I will explain in simple terms. When its a residential home, you never ever speculate. If you need to upgrade, you do it but never speculate. In a high market, you sell high and you immediately buy high and its a zero sum game. No risk involved. You do not delay the purchase, just in case it goes higher.

If its investment such as shares and investment properties, then you speculate. You have the luxury of setting aside some capital with the view of buying low and selling high. Thats common sense and that called risk appetite. You don't need to even attend school for that.

Some people tend to speculate with their matrimonial home. I cited the case of the chap who read the 2005 report and has yet to buy a home and now can never buy a home the location that he wants.

You need to be honest here. Don't take selective items and rum amok with it. If you need clarification, just ask. Happy to help.

Sorry brother, dont agree with you - The sandbox rules in SG does not allows you to take a Line of Credit (HDB - owns 85% of property) so you L L can not leverage.

If you sell high you can down grade to a small place. When the property cycle swing up then you leverage up again to capture on the opportunities. What the risk? If you kena off side then wait until the next upswing then sell. What i cannot tahan about Sg is the govt bubble busting moves and the race quota of HDB. The citizens are the ones paying the price for instance a mosque tat came up near a HDB block - of course you have lots of potential buyer tat are Muslim. What happens to the existing Chinese or Indian tat find it hard to sell their largest investment do they get a market discount?. The "tenant" have to LL swallow the bitter pills.

Sorry brother - every time i think about the stupid R E policies of Sg i really cannot tahan. See too many sad cases in Tampines, Pasir Ris and Bedok.

 

[scroobal]

I always liked your posts. Very encouraging and you list the approach and provide very good example. You are also modest enough to acknowledge your level of education and thus provide strong encouragement for those in a similar boat.

I too believe in rel estate. I don't have the patience to play the share market and its an emprical estate that land/properties are proven wealth accumulaters.

For the benefit of those moving to Canada or those already in Canada, could you advise the following to the best of your ability

1) type of houses for such investment ie with basement, single storey
2) type of neighbourhood
3) any other tricks.

I know zilch when it comes to Canada.

I belived in real estate as there is a lot i can do to get income. Be it passive or not.

For instance,

Non passive income, i recently put a lease on a house. Pay the owner $1000/ month with a Sercuity Deposit of $500 for a period of 2 years. In turn i rent it out at $2000/month and collect 1 month of deposit and 4 months of advance rent.

Passive Income. I do a lease with an option to own -

My rental house, i do a self finacing, i collect a option of 10% (around $30K). My mortgage is 1200/ month. I collect a rent of $1800 / month. I credit the buyer $300/month to the purchase which is schedule to be concluded within 2 years. In stats, 65 % of this type of arrangement will not work out.

If he dont pay up his rent of time contract is written that the deal would be off and i keep the option $$.

I can repeat this as often as i could.

There are a lot of variation in doing this - at the gist of it. There is a recession and to get credit might be difficult for some. So i become the banker. i would suggest that we capture the opportunity by going with the trend.

This is from my prespective. The world out here is not control by Pappy so the rules of my sandbox is very different from Pappy sandbox.

 

[scroobal]

You said it right. The Singaporean mind is so shaped by 50 years of PAP that its hard to change. Thats the reason why I start this thread and encourage others to do so. For instance, working from home is a real shock for some.

When I told a Singaporean lady about beauty / hair styling at home, she looked at her husband. I told her that you can even engage an interior designer to design and claim it as cost. They were truly perplexed.

The world out here is not control by Pappy so the rules of my sandbox is very different from Pappy sandbox.

 

[scroobal]

You mean the employer is prepared to submit false income statements to the tax dept for the employee? Unless the employer is a relative or friend, I don't see how.

I know that in the restaurant trade and in menial jobs, to avoid high payroll tax, they pay under the table some portion of the income. Is this it?

I am curious.

I beg to differ I can think of 5 ways to inflate income. I have shared it with Whistler and some samster that email me before. In my case, i do not have a high level of education therefore i go down to the fundamentals and start with no preconceived(sorry dont know how to spell) notion.

 

[Asychee]

I always liked your posts. Very encouraging and you list the approach and provide very good example. You are also modest enough to acknowledge your level of education and thus provide strong encouragement for those in a similar boat.

I too believe in rel estate. I don't have the patience to play the share market and its an emprical estate that land/properties are proven wealth accumulaters.

For the benefit of those moving to Canada or those already in Canada, could you advise the following to the best of your ability

1) type of houses for such investment ie with basement, single storey
Life is dynamic - in the recession any house also can not sell but now when the 1st breath of fresh air - of course the lower price will move up 1st. As the lower price townhouse becomes too expensive then a house would begin to look attractive and so on
2) type of neighbourhood
Bukit Timah like for your own residence and Bukit Merah type for your rental
3) any other tricks.
Depending of your exit method, what ever is sutiable is preplanned. For instance, i brought a 3 bed room townhouse at a good price in the recession, i was afraid the banks will do what the banks in Sg do revalue it and ask you to cough out the diff. So i got a contractor to developed the basement, i added 2 more bedroom + 1 washroom. This way, in the worse case, it still hold the value. In the upswing, my unit would be the highest value in the area because of the improvement. Now it is in the upswing, if i sell it to a retail guy i have to chase out the renters but if sell it to R.E Investors, i can get premium as it is cashflow very very well.


I know zilch when it comes to Canada.

Thanks for the compliements but i think like what HENRY FORD used to say begin with the end in mind. Lots of people like to buy a house because it look NICE and paid retail price for it. I never pay retail price for my house.

 

[Asychee]

You mean the employer is prepared to submit false income statements to the tax dept for the employee? Unless the employer is a relative or friend, I don't see how.

I know that in the restaurant trade and in menial jobs, to avoid high payroll tax, they pay under the table some portion of the income. Is this it?

I am curious.

self employed not being employed - sorry for the communication error.

For instances, i run a biz, i put all the revenue from my wife income thru the income of the company. At the end of the year, bank statement is going to look higher than it is rite. Bank will lend to take the figure tat is declared and lend u the $$ according to their guidelines + 15%. You are supposed to pay more taxes but who is there to question you if you can do this or cannot do that to run your biz. The most kena re- assessment 6 - 9 months later. By then you would have gotten the loan to buy the Real Estate that you wanna.

I found out about this way but asking myself. Everybody is doing the under declaring income way. What is the effects and consequences of over declaring it? Remember Enron?

There is no trick - Life is dynamic what ever others can do might not be suitable for another person. Have to weight it out - which is the most suitable for you.

 

[scroobal]

OK. got you.

self employed not being employed - sorry for the communication error.

For instances, i run a biz, i put all the revenue from my wife income thru the income of the company. At the end of the year, bank statement is going to look higher than it is rite. Bank will lend to take the figure tat is declared and lend u the $$ according to their guidelines + 15%. You are supposed to pay more taxes but who is there to question you if you can do this or cannot do that to run your biz. The most kena re- assessment 6 - 9 months later. By then you would have gotten the loan to buy the Real Estate that you wanna.

I found out about this way but asking myself. Everybody is doing the under declaring income way. What is the effects and consequences of over declaring it? Remember Enron?

There is no trick - Life is dynamic what ever others can do might not be suitable for another person. Have to weight it out - which is the most suitable for you.

 

[Asychee]

OK. got you.

Can clear your Inbox or not. Try to PM you. Can you connect me to the lady Migration Agent in Dubai. The current agents(Indian, Pinoy) that i have is try to Holland me all the time.

 

[scroobal]

ok., I have been getting a number of PMs about a particular chap and its clogging up the box.

Can clear your Inbox or not. Try to PM you. Can you connect me to the lady Migration Agent in Dubai. The current agents(Indian, Pinoy) that i have is try to Holland me all the time.

 

[neddy]

Do you know the meaning of cash economy and do you know why the GST was put in place?

Why is annual income low and what is the nature of the business that makes it low.

On the surface, I can tell how much income the hairdressers are getting from the number of walk-in customers per day and the staff who just sit around do nothing. No doubt they operate on cash and I do not think this small outlet is even GST registered.

But if it can be used an a vehicle by the hubby to reduce tax while the wife do what she likes.

 

[scroobal]

Ok got your point. I think you are referring to those who use their business outlets as tax avoidance vehicle. I had the impression that the trade was some sort of sunset industry as especially when you mentioned the nature of the business.

You get the same but not for tax avoidance but to keep mistress in Singapore. Open a boutique, your mistress becomes the manager, she gets a regular income, and you get to meet her often with an accetable reason. What mistress does not realise is that she is giving away screws for free.

But if it can be used an a vehicle by the hubby to reduce tax while the wife do what she likes.

 

[axe168]

Please don't thrash this thread. Welcome your own approach / views on starting a business in OZ. But try not to wrongly misinterpet other people's contributions. Happy to clarify.

Its important that varied views are sought.

Alright. I will not mislead ppl and hope you dont blindly advise them to jump ship.. It's a jungle out there.. only the fittest survives.. If these ppl cannot help themselves from initial stage or not flexible to change the circumstances to suit them.. then it is best for them to stay in SG.. Sinkies are a bunch of innocent chaps.. pls keep it that way..

 

[axe168]

Good point bro.. glad to find someone with the same view.

In Sg, the ppl L.L. cant leverage their HDB assets, coz the govt maintained this shall be their primary hse only (& family shall have a roof) and the bank cannot take that away.. HDB pegged their interest at a fixed rate and CPF returns at a fix rate too. Good point - it does not bring harm or good for its ppl.
Years past.. the rules changed.. banks take over the borrowing components.. interest no longer fixed.. yet the returns from CPF is fixed ?!. now the bank can seize your primary hse, and it cannot be used for leveraging...OMG, bad-bad for residents..

Using Hses as guarantee or flexibility of refinancing, offset a/c are big plus-plus for businesses.. Overseas property is such a wonderful thing despite its higher interest.

My mom keeps saying Char Kway Tiao is good.. my brother in US is doing char kway tiao.. maybe i shld throw away the real estate & join the clan.

Sorry brother, dont agree with you - The sandbox rules in SG does not allows you to take a Line of Credit (HDB - owns 85% of property) so you L L can not leverage.

If you sell high you can down grade to a small place. When the property cycle swing up then you leverage up again to capture on the opportunities. What the risk? If you kena off side then wait until the next upswing then sell. What i cannot tahan about Sg is the govt bubble busting moves and the race quota of HDB. The citizens are the ones paying the price for instance a mosque tat came up near a HDB block - of course you have lots of potential buyer tat are Muslim. What happens to the existing Chinese or Indian tat find it hard to sell their largest investment do they get a market discount?. The "tenant" have to LL swallow the bitter pills.

Sorry brother - every time i think about the stupid R E policies of Sg i really cannot tahan. See too many sad cases in Tampines, Pasir Ris and Bedok.

 

[scroobal]

Bro, You got me stumped. Please read the title of the thread. What has Singapore, line of credit, leverage got do with the posts. Another communication problem?

I can't recall talking about Singapore, HDB, line of credit or leverage.

Sorry brother, dont agree with you - The sandbox rules in SG does not allows you to take a Line of Credit (HDB - owns 85% of property) so you L L can not leverage.

If you sell high you can down grade to a small place. When the property cycle swing up then you leverage up again to capture on the opportunities. What the risk? If you kena off side then wait until the next upswing then sell. What i cannot tahan about Sg is the govt bubble busting moves and the race quota of HDB. The citizens are the ones paying the price for instance a mosque tat came up near a HDB block - of course you have lots of potential buyer tat are Muslim. What happens to the existing Chinese or Indian tat find it hard to sell their largest investment do they get a market discount?. The "tenant" have to LL swallow the bitter pills.

Sorry brother - every time i think about the stupid R E policies of Sg i really cannot tahan. See too many sad cases in Tampines, Pasir Ris and Bedok.

 

[scroobal]

Bro, You got me stumped. What has Singapore, line of credit, leverage got do with the posts. Another communication problem?

I can't recall talking about Singapore, HDB, line of credit or leverage. I think you must have mixed me up with some other posts.

Look at the title of the thread - its about OZ and business opporturnities.

Sorry brother, dont agree with you - The sandbox rules in SG does not allows you to take a Line of Credit (HDB - owns 85% of property) so you L L can not leverage.

If you sell high you can down grade to a small place. When the property cycle swing up then you leverage up again to capture on the opportunities. What the risk? If you kena off side then wait until the next upswing then sell. What i cannot tahan about Sg is the govt bubble busting moves and the race quota of HDB. The citizens are the ones paying the price for instance a mosque tat came up near a HDB block - of course you have lots of potential buyer tat are Muslim. What happens to the existing Chinese or Indian tat find it hard to sell their largest investment do they get a market discount?. The "tenant" have to LL swallow the bitter pills.

Sorry brother - every time i think about the stupid R E policies of Sg i really cannot tahan. See too many sad cases in Tampines, Pasir Ris and Bedok.

 

[axe168]

Look at the title of the thread - its about OZ and business opporturnities.

Yo Bro.. sometimes it is good to juz to leave us alone to do our talking.. We can always make comparison of what we learnt and whats the good/bad things about business..