The ‘New Year’s resolution’ plan.
Financial planning isn’t very
rock and roll. I guess that’s why
I foolishly kept putting it off.
Ross, 48
Music Producer and Songwriter
I’m lucky. I’ve built a successful career doing what I love,
making music. I never chased money, it just crept up on me.
My income has always been inconsistent, so I got into the
habit of just leaving spare cash in my business.
But over time, I found I’d built up a decent pot.
The ‘New Year’s resolution’ plan.
Financial planning isn’t very
rock and roll. I guess that’s why
I foolishly kept putting it off.
Ross, 48
Music Producer and Songwriter
I’m lucky. I’ve built a successful career doing what I love,
making music. I never chased money, it just crept up on me.
My income has always been inconsistent, so I got into the
habit of just leaving spare cash in my business.
But over time, I found I’d built up a decent pot.
The future comes into focus
When you’re staring down the barrel
of 50 you start to think.
Music can be a fickle business, and
whilst I have no intention of giving up
songwriting, I wondered what would
happen if the industry gave up on me.
Then there’s my daughter Eve – boy
she can play base.
She’s only 15 but she’s already set her
heart on studying music at Goldsmiths
in London and that’s going to cost.
The future comes into focus
When you’re staring down the barrel
of 50 you start to think.
Music can be a fickle business, and
whilst I have no intention of giving up
songwriting, I wondered what would
happen if the industry gave up on me.
Then there’s my daughter Eve – boy
she can play base.
She’s only 15 but she’s already set her
heart on studying music at Goldsmiths
in London and that’s going to cost.
WEALTH WITHOUT A PLAN
Over Christmas I poured myself a
drink and promised myself that
I’d finally get some financial advice.
Every year I meet my accountant and he says,
‘Ross, get yourself a wealth manager’.
Every year I say, ‘do you know a good one?’
His answer is always the same, ‘Goodbody’.
So I made calling them my New Year’s resolution.
WEALTH WITHOUT A PLAN
Over Christmas I poured myself a
drink and promised myself that
I’d finally get some financial advice.
Every year I meet my accountant and he says,
‘Ross, get yourself a wealth manager’.
Every year I say, ‘do you know a good one?’
His answer is always the same, ‘Goodbody’.
So I made calling them my New Year’s resolution.
The Goodbody Advice
Put business assets to work.
Ross had built up the majority of his assets within his business, which held a significant amount of
cash as well as shares in companies in the entertainment sector.
However, the annual turnover of his business was unpredictable, so any plan needed to be flexible.
Annual business turnover over last 5 years
€300,000
2018
€300,000
2018
€450,000
2019
€450,000
2019
€275,000
2020
€275,000
2020
€325,000
2021
€325,000
2021
€295,000
2022
€295,000
2022
annual income required from business
€150,000
annual income required from business
€150,000
cash held in business deposit account
€2,500,000
cash held in business deposit account
€2,500,000
value of investments held by the business
€500,000
value of investments held by the business
€500,000
The Goodbody Advice
Put business assets to work.
Ross had built up the majority of his assets within his business, which held a significant amount of
cash as well as shares in companies in the entertainment sector.
However, the annual turnover of his business was unpredictable, so any plan needed to be flexible.
Annual business turnover over last 5 years
€300,000
2018
€300,000
2018
€450,000
2019
€450,000
2019
€275,000
2020
€275,000
2020
€325,000
2021
€325,000
2021
€295,000
2022
€295,000
2022
annual income required from business
€150,000
annual income required from business
€150,000
cash held in business deposit account
€2,500,000
cash held in business deposit account
€2,500,000
value of investments held by the business
€500,000
value of investments held by the business
€500,000
I felt I needed to do something with
the cash in the business.So, I started buying shares in
the entertainment companies that
commissioned me.There was no real strategy behind it.
I just felt more comfortable buying
shares in an industry I understood.
I felt I needed to do something with
the cash in the business.So, I started buying shares in
the entertainment companies that
commissioned me.There was no real strategy behind it.
I just felt more comfortable buying
shares in an industry I understood.
THE flexible plan
Reallocation, Reallocation, Reallocation.
Given the unpredictability of his earnings, Ross needed a 3-point plan to ensure he had sufficient funds
to secure his short and long-term future, as well as fund his daughter’s education.
That plan centred around reallocating his business assets in the most tax efficient way.
1.
The plan for
Ross’s investments.
Within his business Ross held shares in several listed entertainment businesses. Not only did this overexpose him to a volatile sector, but the holdings also didn’t form part of a well balanced portfolio.
Therefore, to provide more consistent returns we reallocated the funds invested in these companies, together with a proportion of the cash in the business, into a fund structure that reflected his risk profile.
To ensure the new fund structure was implemented tax efficiently, it remained in the corporate name rather than Ross’s own name.
2.
The plan for
Ross’s retirement.
As a director of his own company, Ross could shelter up to €2,000,000 of corporate assets by making pension contributions into a ringfenced investment account in his name.
What’s more this would also enable him to take €200,000 tax free at retirement.
As Ross hadn’t made any contribution for a number of years, he was able to make a large up front lump sum for past service and then we devised a plan for him to make a schedule of lump sum annual contributions over the next 10 years with a view of reaching the €2,000,000 allowance.
3.
The plan for
Eve’s education.
As Eve was 3 years away from college, we sourced a savings plan for her tuition fees and accommodation.
The savings plan was kick started with a lump sum from the cash held in Ross’s business.
Also, because of Ross’s inconsistent earnings we ensured he could contribute further lumps sums rather than commit to making regular monthly contributions.
We also made sure he could start drawing downs on the funds in the next 3-5 years without incurring any penalties.
THE flexible plan
Reallocation, Reallocation, Reallocation.
Given the unpredictability of his earnings, Ross needed a 3-point plan to ensure he had sufficient funds
to secure his short and long-term future, as well as fund his daughter’s education.
That plan centred around reallocating his business assets in the most tax efficient way.
A Final Thought From Ross
For me money was always a by-product of my passion for song writing. I guess that’s why it was never my priority.
Now Goodbody gives my wealth the attention it deserves. I just focus on what really matters, like watching Eve bring the house down.
A Final Thought From Ross
For me money was always a by-product of my passion for song writing. I guess that’s why it was never my priority.
Now Goodbody gives my wealth the attention it deserves. I just focus on what really matters, like watching Eve bring the house down.
What’s your plan?
Please contact us if you think your life could be enriched by a financial plan.
