There is plenty of advice that says you shouldn't make investment decisions based solely on tax considerations.
I would normally fit fair and square in this camp in some cases, but there is a compelling reason to break this rule.
The present $150,000 investment allowance is one of those times when one might make a tax-based decision.
If you wanted to take advantage of the instant asset write-off, you still have a bit of time, as it has been extended to December 31.
As we all know, it can be difficult to source agricultural machinery at short notice, so planning is critical. Come to think of it, planning is always important.
If you are contemplating purchasing an asset, you should consult your accountant first. I have seen a few, what I would call "dubious" buying decisions based purely on tax considerations, for example, the posts and troughs that sit behind the shed for 10 years.
Yes, it may be a tax deduction, but it is not always a productive use of scarce capital.
You also need to be aware of the cash flow implications. Unless you are financing an asset, there is normally cash going out the door to make the purchase.
This leads generally onto the topic of making decisions based on fact and not emotion. Just because something looks like a good idea on face value, doesn't mean it is.
There is a fine line between making impulsive decisions and paralysis by analysis, somewhere in the middle is a happy medium.
Seeking advice is usually a good start, but asking the right people is the hard part.
Whoever you ask should have knowledge on the subject you are inquiring about, and it is just as important that they are able to tell you what they really think, not what they think you want to hear.
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Hanging out with smart people is a good idea. Being smart doesn't necessarily mean highly-educated people either. Some of the smartest, savvy business owners I know left school the day they turned 15. Seeking out smart people that have skills in particular areas, is always good business practice.
As the old saying goes - which I agree with - if you think you are the smartest person in every room, then you've got a problem, as you're probably not.
Being open to suggestions and ideas is a good personality trait to have. Of course, you ultimately make your own decisions, but it pays to consult on most things.
If decisions are made within the framework of a long-term plan for the business, then choices that may seem a bit odd in isolation, do make sense when viewed in the prism of longevity.
Sometimes a good dose of reality is just what an individual needs at a specific moment in time. Whether the decision ends being a good or bad one, it was made in the cold light of day.
Like everything, you can't keep looking in the rearview mirror - you have to move on from that particular decision at some point. If you have thought it through and consulted, and it fits within your strategic plan, it will more than likely pay dividends in the long run.
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