Buy buy tree investments

[GTS Listy]

Well I guess it was going to happen with all the other tree growning companies going bust and now the one I signed up with 10 years ago has gone bust. Spewing as it was due for harvest March next year and estimated returns on the current market was 40k with the fees taken out.
Bastards and lying bastards too as 12 month ago they wrote this great letter to all the investers that they were in great financial shape and owned very little money. They had some method the lender was under the groups name and the third party lender was the one they acutally owned money too. They never mentioned that they had 10s of millions in debt to them.

Back to the drawing board.

Overall it never actually cost me anything as the tax gains and gst refund and payments over the years I end up almost even but still the money I put in could of make plenty more in other areas. Back then as I knew my tax bill was going to be huge and I would not be able to pay it and this was the only way to do it as a primary producer and writing off losses and gst.
I am still classed as a primary producer so I do not know if I can now claim the estimated value as a tax duduction bassed on a loss. I will ask but I doubt it. It the creditors do their work the overall property value and trees are way more than the debts but as they are not actually producing money they can not pay. Hopefully they give it 8 months and do the planned harvest for my lot of trees and I get something out of it atleast.

I know allot of miners who will be very peaved and losses will be huge as this was most of their investers.

That is that so time to move .

[NickS]

Overall it never actually cost me anything as the tax gains and gst refund and payments over the years I end up almost even ...

I love it when people make this claim ... the absolute most that tax benefits can save you is 46.5% of what you spent, that's a long way from "break even".

No offence mate but it's these sorts of statements that plantation companies / emu farms / olive tree growers etc. etc. etc. use to suck in the "investors" in the first place. Wonder how much the founders of this little gem drew out in "management fees" over the years.

Sorry to hear you did your cash Listy ... don't mean to have a go at you, these things bug me a bit, that's all.

:cheers:

I am still classed as a primary producer so I do not know if I can now claim the estimated value as a tax duduction bassed on a loss.

It'll be classed as a capital loss, which can be offset against other taxable capital gains or carried forward until you realise some ... but it can't be offset against ordinary income.

[seldo]

... the absolute most that tax benefits can save you is 46.5% of what you spent, that's a long way from "break even"....
.What about all the money saved by no longer having the cash to waste on other good investments ...like cars... ;)
Sorry to make light of it Listy, but I've always thought these contrived things are mostly scams. What's that old saying "Bullshit baffles brains"...

[GTS Listy]

Agree it is a dam nuisance but at the time it looked good and all the mimers were doing it too offset tax so i jumpled in. Without the tax ruling it would of been stupid to do.

Thinking about how much it cost. From memory It was 20k in total over the years (investment loan), I got $8500 back as a primary producer tax ruling (or very close to and I got this straight away in one hit), $2000 back gst (again straight away), the tax interest claim on the loan and the insurance tax claim each year. So a estimaged guess the out of pocket would be been more like 8-9k. That is a fair bit worse off than I though adding it up. Spread over 10 years of putting cash in is still dead money.

We all live and learn.

[NickS]

Agree it is a dam nuisance but at the time it looked good and all the mimers were doing it too offset tax so i jumpled in. Without the tax ruling it would of been stupid to do.

Thinking about how much it cost. From memory It was 20k in total over the years (investment loan), I got $8500 back as a primary producer tax ruling (or very close to and I got this straight away in one hit), $2000 back gst (again straight away), the tax interest claim on the loan and the insurance tax claim each year. So a estimaged guess the out of pocket would be been more like 8-9k. That is a fair bit worse off than I though adding it up. Spread over 10 years of putting cash in is still dead money.

We all live and learn.

Hmmm ... close, can I have a go ?

$22,000 investment fully deductible up front. The $2K GST refund sounds right, the $8,500 is the tax claim on the $20K net cost. So at buy in you're out of pocket $11,500.

At this point I'll ask if you took the $8,500 and the $2,000 GST refund off the $22,000 borrowed or if you used that for something else ? (Like playing with the car ...), the sensible thing is to take it off the loan, unfortunately I've never seen anyone actually do that.

I'll assume the loan was $20K and the term was 5-7 years (even if it doesn't apply to you it's the way these things usually work and it's interesting to have a look). Interest is about $1,800pa and insurance is usually a couple of hundred. Let's say $2Kpa tax deductible. On the maximum tax rate (taxable income in excess of $150K - $180K depending on the year) you'd be out of pocket a further $7,500 over the term of the investment, even more if your marginal tax rate is only 31.5% or 41.5%.

That means you've basically lost the initial $20K (at least) even after all tax benefits. The other bad news is that having the up-front claim in full you get nothing at the end, not even the capital loss claim that I thought you might get. You've claimed every cent you put in (even the borrowed funds) so there is nothing left to claim ... you can't get the deduction twice.

As I said Tony ... not meaning to have a go at you. These schemes are a total con and I have NEVER seen one hand out a lump sum at the end. If they did it would be fully taxable at marginal income tax rates anyway. Thousands of people have jumped into them to "save tax" but all they do is scam you out of your money.

The positive is that it was only $20K ... I've seen people borrow and "invest" a hell of a lot more than that ... despite me telling them all the reasons not to. Makes a Coupe 4 look like an excellent "investment".

:(

[choppo]

Well done Nick.

Tony im sorry for the loss. Ive got a young guy at work who did the same. Ironic (not really) after the trees 'burnt down' 10mths out, they still had the hide to come after him for the final payment! A good laywer mate put a stop to that. Ill be interested to see if they try the same on you.

But for the younger generation and/or older generation, heed Nick's advice.

I recently had a argument on PF with a guy who was dead set a fan of shares rather than investing your spare cash in your Principle Place of Residence :lmao: Actually i should log in to see how his shares are going the past few days :lmao:

Tax deductable = spend money and it costs you a bit less. But you still have to spend money
Negative Gearing = spend money and hope to Christ capital growth exceeds your expenditure. For the real rich.

Either way, you are spending money. No such thing as a 'saves me tax so im in front' unless you have the spare cash to take a punt.....

[NickS]

Tax deductable = spend money and it costs you a bit less. But you still have to spend money
Negative Gearing = spend money and hope to Christ capital growth exceeds your expenditure. For the real rich.

That's true ... but it does work assuming you invest wisely and you have a high marginal tax rate ... negative gearing has really lost most of it's effectiveness for anyone on an average income.

The other thing that it does is that it forces you to keep sticking money away. e.g. if you're forced to make the monthly repayments on a 2nd property you can't spend it on crap ... not a bad thing and long term can be very successful.

Spending to save tax rarely achieves anything though ... 100% agree there.

:yep:

[choppo]

That's true ... but it does work assuming you invest wisely and you have a high marginal tax rate ... negative gearing has really lost most of it's effectiveness for anyone on an average income.
Especially in NSW. I have this argument at least once a week.

"i sold my investment property last week and made a fortune. Bought it for $300k, and sold it for $450k. Had it for 5 years, ive made $150k!!!!! Ive got 26 more, ill be a Millionaire soon"

Like poker machines, 'investors' only talk about the wins, not the costs :D

[GTS Listy]

The sums do add up. Tad nieve and wishing I think.
Bit silly back them and drank too many bears being a militaty bloke so it was nothing. I used the 8500 and the gst too offset the tax so I did not get it to spend on any toys. That is the reason I did it so I did not need a 10 000 loan to pay the tax bill

Do you see where I am coming from. I did not want to go get a personal loan for 10000 for a tax bill/

[choppo]

The old trick of Financial Advisors/Planner (sales people) ..... Spend $20k to get $8.5k (less than that over time). Thats the reality unfortunately.

Good to see the new Financial Planners rules come out so they have to work on a disclosed % now. Not just sell you/ retirees up the river for a quick buck......



The sums do add up. Tad nieve and wishing I think.
Bit silly back them and drank too many bears being a militaty bloke so it was nothing. I used the 8500 and the gst too offset the tax so I did not get it to spend on any toys. That is the reason I did it so I did not need a 10 000 loan to pay the tax bill

Do you see where I am coming from. I did not want to go get a personal loan for 10000 for a tax bill/

[choppo]

Do you see where I am coming from. I did not want to go get a personal loan for 10000 for a tax bill/
Why would you need to pay a $10k tax bill working for the Gov? I would think they do PAYG for you?

[Kyle]

Hmmm i think i'll just stick to investing in pyramid schemes

[GTS Listy]

Why would you need to pay a $10k tax bill working for the Gov? I would think they do PAYG for you?

I was kicked out of the army for a lower back injury. Fully work related claim but they have some pretty poor way of doing things for the injured. (compo ha that's funny) I was classed as no good and told buy buy and had my long service leave and other leave in the books and no time to use it. Hence it wacked me up a few tax brackets and it was going to cost me.
Also I took the advise from a account/super person that the military arranges for ex service people. It seemed the right thing to do and make sence at the time. Of course times change and people are allot more aware.

Little story but might make sense: The mililary is a funny place. It is like you are in a group like a giant boarding school locked away for 10 years and not actually exposed to much of the real world like I am now. I spent too much time playing rugby for them to worry about much else. I did not even know there was car forums nor at the time care if I did. In the military my life order was: woman, rugby, beer, cars and then you would have to go to work and what every money was left you would go back to priority order and work your way down again with the left overs. That is not a joke either. That is the way it was.

It is in the past and thankfully life is very different now but in reality I have only really been working for 10 years as I left the Army without a cent to my name and a old SS that I had to pay for. A few qualification but they all needed work and extra study to get recognised. It was tough but found my way.

Anyway that is life

[35R]

Listy dont worry, it's only money. Often, negative gearing opportunities merely give us an excuse for something we are eager to dabble in otherwise, the tax offset just makes it a bit easier to swallow. Doesnt necessarily make it the best logical investment option (like buying exxy v8's lol, or running race cars).

[35R]

Hmmm i think i'll just stick to investing in pyramid schemes

I have a friend, he's into selling soap products (aka AMWAY) i can arrange a meeting/brain washing exercise if you like.

[Duffman]

Tough luck Listy. Live and learn eh...

Fortunately for me, I recently found out I had a rich relo in Nigeria. Left me a bundle of cash and all I have to do is pay for the processing and transfer fees. Small price to pay for some mega $$$ :yep:

Funny as I thought my background was German and Estonian. Turns out I'm half African. Just looked in the mirror and sure enough... :D

[hsvredsled]

Listy dont worry, it's only money. Often, negative gearing opportunities merely give us an excuse for something we are eager to dabble in otherwise, the tax offset just makes it a bit easier to swallow. Doesnt necessarily make it the best logical investment option (like buying exxy v8's lol, or running race cars).


Very wise words.

Its only money. Its not like its a limb or body organ or your first born.

Some of the crankiest and unhappiest people I know are mega rich.

[SSUte01]

Tough luck Listy. Live and learn eh...

Fortunately for me, I recently found out I had a rich relo in Nigeria. Left me a bundle of cash and all I have to do is pay for the processing and transfer fees. Small price to pay for some mega $$$ :yep:

Funny as I thought my background was German and Estonian. Turns out I'm half African. Just looked in the mirror and sure enough... :D

What a coincedence, me too. Perhaps we are related, I had to squint to see the African, but it's definitely there, because the email said so haha.

But in all seriousness, I feel for you, Tony, and think that people who deliberately scam people out of money be it maliciously or justified through whatever bullshit required should be penalised much more harshly than they currently do - which is generally rewarded by them keeping the proceeds because our others' ignorance. Shits me! :soap:

[Avalanche]

Listy , any chance of giving the name of the investment??? Only because the wife has a few clients that didnt like her answers when they asked her to look into it for them. One even demanded she go to the seminar with him. She read about it & asked the financial planner some questions he couldnt answer. So the planner told her that her client would be better off using their accountant , because he understands the product better.:laugh: Either way they bought into the schemes, or should i sau borrowed to get into the schemes.

[GTS Listy]

It is Forest Rewards and there is a meeting in perth on the 26th to discuss options. Everyoen should of got a letter that invested. I have had calls from my mates i the mines and they are very very pissed. My $20k is pittance compared to some.

Perth convention centre meeting room 1 and 2 from 9 to 11 am. Arrive 30 min prior.

I was with the Teak side of things in year 2000 so it was one of the first releaces of teak.