The $1,000 actually came from tax savings. I normally receive a tax refund and last year I was able to put $3,000 towards The $1,000 Project (the average Australian gets an annual tax refund of $2,500).
However this year was different for me as I sold an investment property during the financial year and therefore knew that I was going to have to pay some capital gains tax, from the growth that I made. So before I decided to sell the property, I ran some rough calculations as to how much tax I would need to pay, (as well as if it was worth selling in the first place) and I rounded that number up to be safe and kept that money in a seperate savings account, so that I would have the correct amount ready to pay when due.
My accountant worked out my expenses, deductions and income and fortunately found a legal way of reducing my tax bill and saving me some money. So from this, I was able to add another $1,000 for more shares, from the savings that he created from his technical knowledge and experience. This is why I value good advice, I sleep well at night, knowing that I have done the right thing, paid my taxes but also kept my tax structure efficient, fair and legal. Paying for quality advice, especially around tax which is something I would never skimp on.
So with this $1,000 I purchased more stock in CBA, I originally planned to put more into a LIC, however seeing CBA off by 9.5% this week, I couldn’t help myself in wanting to cease a great buying opportunity. Whilst CBA is being hammered in the media, I felt that their issues may be temporary and that this was an overreaction to CBA’s share price. So I purchased more stock (which I had been wanting too for quiet some time now) and have raised my estimated passive income to $2,849 p.a. which means that I am 71.2% of the way towards achieving my goal.
Canna Campbell is the founder and director of SASS Financial Services, a boutique financial planning firm. She is Channel 9’s exclusive ‘money expert’, founder of financial media platform SugarMamma.TV and best selling author of The $1000 Project and Mindful Money.