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Investment tips for high earners

At the last count, there were around 364,000 people in the UK paying additional rate tax (45% on taxable income over £150,000).

by
Louis Coke

02.01.2019

At the last count, there were around 364,000 people in the UK paying additional rate tax (45% on taxable income over £150,000). 

If you are fortunate enough to be in this bracket, it is highly likely that you will either have a significant investment portfolio or be able to save enough to create such a portfolio

Whilst the information below should not be considered investment advice, our experience in looking after the affairs of high net worth individuals suggests that you might want to consider the following:

  • Make sure you have a financial adviser.  Earning significant sums has implications on the amount you can put in your pension, your tax bracket and can also present some tax planning opportunities. Your financial adviser can explain the impact and opportunities of this. If you don’t have a financial adviser, speak to us.

  • Invest, invest, invest.  You should consider paying off any outstanding short-term debt and assess if it is appropriate to pay off long-term debt based on the interest rates you are paying, and then start building your wealth. Invest regularly and strategically – employing the services of a wealth manager like Charles Stanley can help ensure you don’t miss out on appropriate investment opportunities.

  • Re-evaluate the tax efficiency of your accounts.  Tax wrappers, such as ISAs, are entities that contain cash or investments that can help you manage your tax liabilities.

  • Consider the benefits of compounding.  Albert Einstein famously described compounding interest as the 8th wonder of the world. Regular investing can provide you with a fantastic long term nest-egg to give you financial flexibility in the future. Saving in cash is fine, but don’t dismiss the power of compounding to potentially increase your purchasing power in years to come.

  • You don’t have to do everything.  Your focus should be on your business and your career and other things you love doing. Outsourcing the care of your tax, investment and legal affairs to qualified professionals gives you the time to secure your financial future by focusing on building your personal brand and career.

We hope the above offers some useful pointers. If this article applies to you, you may be interested to know that Charles Stanley manages the financial affairs of many individuals in your situation. To find out more about how we might be able to help you, please contact us.

 

 

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