The way the taxation system works in Australia means that no taxation is normally due on the increasing value of your assets. You only pay tax on the capital gain (increase in value) when you sell. If the asset was purchased to hold and you kept it for over 12 months, there is a 50% General Capital Gains Tax (CGT) discount. If you buy with the intention to sell however, the profit is taxed at your full marginal tax rate irrespective of how long you retained the asset. [Read more...]

We all need income to pay the rent or mortgage, to buy food and clothes; we all need income to live.

Income can be made in a number of different ways.

You can sell your time or you can buy and sell a commodity for a profit. If you sell your time then you have a job (and there’s nothing wrong with that, by the way).

If you buy and sell a commodity then you’re considered a trader.

Trading is often confused with investing because wealth can be achieved through both trading and investing. Confusing the two, however, can be disastrous. It’s a bit like trying to be a dancer in a boxing ring – the two should be kept very separate! [Read more...]