Optimising your cashflow with PAYG variations, with Jeremy Iannuzzelli – Ep. 76
For the latest episode of this bonus series of the property investing journey, Mike is joined by Founding Partner of KHI Partners and dedicated property investor Jeremy Iannuzzelli, to discuss the critically important topic of PAYG variations and how they can optimise your property cashflow, particularly in uncertain times.
Whilst it may seem a relatively dry subject, Mike and Jeremy’s discussion highlights the benefits of understanding and properly utilising PAYG variations, and how they can be beneficial for your property cashflow. Jeremy talks through the pros and cons of having an adjustment made to your regular pay cycle, to take into account your expected annual tax deductions and income.
Sharing some of the background of PAYG variations, Jeremy explains why interest rates can have an impact on the tax component of cashflow, and provides practical examples of how appetites for tax planning have moved over the years. Jeremy highlights the importance of rigorous budgeting, and why your psychology around money may determine whether this is the right path for you.
With characteristic humour, Mike and Jeremy’s discussion of this important subject will have you reassessing your property budget. From the reasons behind PAYG variations, through to the steps to take to implement such a strategy, this conversation covers the critical factors, and will get you on the path to optimal cashflow.
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Mike is joined by Founding Partner of KHI Partners and dedicated property investor Jeremy Iannuzzelli, to discuss the critically important topic of PAYG variations and how they can optimise your property cashflow, particularly in uncertain times. Whilst it may seem a relatively dry subject, Mike and Jeremy’s discussion highlights the benefits of understanding and properly utilising PAYG variations, and how they can be beneficial for your property cashflow.
What we cover in this episode
Understanding PAYG Variations
The background of PAYG variations and the impact of interest rate movements
Avoiding the scenario of a forced sale
Correctly estimating expected cash flows
Knowing your spending psychology
The practical steps of lodging a PAYG variation
The cost elements that typically trip investors up
How PAYG variations can optimise your offset account
“Instead of you waiting to get a refund at the end of the financial year that refund will be divvied up and sent to your employer essentially as a reduced amount of PAYG that they withhold and you’re getting less tax taken out” Jeremy 2:58
“I do urge anybody who does a PAYG variation, yes it is an estimate, but try to accurately estimate your forward guidance of expenses. It is very tempting to just add a couple extra $1000 here and there but it does add up overtime” Jeremy 8:12
“If you’re doing a PAYG variation simply to maybe have a little bit more disposable income, not getting used for the right purposes it’s terrible. I’d rather clients wait till the end of the financial year and get that one off cash injection because psychology is very important in these decisions” Jeremy 11:03
“I tried to encourage clients to steer on the conservative side but let’s try to get it is accurate as we can. The closer we can get to the true nature of the position the better it’s gonna be for you” Jeremy 21:09
“Everyones’ goal with an offset account is to try to have as much money as we possibly can for as long as we possibly can” Jeremy 23:02
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The Geared for Growth property investing podcast was created by Mike out of a desire to provide value to his property investor clients. The idea is to source Australia's leading property investment experts and find how they and their clients are achieving exceptional results. The podcast is open to anybody interested in learning how to invest and the strategies you can apply to achieve exceptional results. You'll hear from buyers agents, mortgage brokers, strata managers, accountants and other professionals all sharing their insider knowledge.