- A reasonable prudent person would conclude there is no reasonable likelihood the debt investments will be paid
- the debt is written off as bad in the income year in the person's records
- the person is in the business of dealing or holding investments, and
- the person is not associated with the debtor who is in default
The critical test in most circumstances will be whether or not a person is in “business”. This is not a straightforward question and the following factors will need to be considered: nature and intention of activity; period of activity; scale of operations; volume of transactions; pattern of activity; commitment of money; and commitment of time and effort.
- at least several hours per day dedicated to mananging the investments
- adequate records kept of the investments, setting out when the funds were invested, the amount, interest received and maturity date
- records from the investment companies detailing the bad investments and the likely chance of recovery
- annual financial statements prepared, and
- a reasonable amount of investment activity, with new investments being entered into, investments maturing or being invested each year
10 REASONS WHY YOU ARE NOT RICH
(Acknowledgement- Adapted and amended from an Article from BusinessDay.com.au)
1. Credit Crud
Unwary business operators put purchases that they cannot afford on the "never never" credit card. Before you buy something, ask yourself if you need it.
If so, what are the alternatives? Investigate second-hand options. Use cash over credit cards whenever possible.
2. Piddling Interest
Many people think they are saving, but they have their money stashed in low-interest transaction accounts. So, capitalise on your cash - invest it in a high-interest account and enjoy the difference.
3. Budget Bedlam
Too many people fail to track expenses. Most spending can be foreseen. It is helpful to draw up a monthly budget that helps you plan how you maximise your regular wage.
4. DIY Disaster
In the frantic small business sphere, it is easy to acquire the habit of wearing too many hats. The cost of outsourcing a task may seem high, but the money you save by doing it yourself may cost you more by eroding your time to pursue money-making activities that you do well. Trying to do specialist tasks for which you lack training may even mean that you wind up paying more to fix mistakes you make.
5. Flash before Cash
Many people care too much about having the latest and greatest status symbols. Flashy office space and furniture may look cool, but the funds they tie up can curb your ability to grow your business.
6. Same Stew
Mistakes can be costly, especially if you repeat them. Learn from your mistakes so they don't hold you back. Too often, the same mistakes are repeated relentlessly. Much money is lost through failure to learn what went wrong last time and to adapt.
7. Whatever Attitude
Without enthusiasm for your business, the chances of success are remote. A strong work ethic goes a long way, buts it passion that leads to success.
8. Dream On
Visuallising goals will fuel success A vital and often missing part of that process is conviction. If you only dream of success and lack the belief that you can win it, you will flounder.
Going solo and not asking for help when you need it can stifle growth and mean you miss opportunities. People you might want to recruit include accountants, solicitors, financial planners for investment advice, IT personel for your computer system, business mentors etc.
10. Passion Killer
A final reason that you may fail to get rich, is that you are passionate about an area , but lack strategy. Then you wonder why the dollars are not rolling in. If you want to make money, find a gap in the market and then market that gap.