2.1 Million Aussies are working a second job to make ends meet.
According to an article published by The Australian today, the amount of Australians working three or more jobs have increased by 53% in one year (according to numbers from the ABS.)
The reason why, is disheartening. It is simply to make ends meet. The real question here is, where does your money disappear to?
In this financial year, people who earned $125K/year received a little bit of tax relief and will continuously do so. Although the tax relief hasn’t been enough to eliminate the feeling of that “money disappears.” The sad fact is; disappearing money is not just tied to discretionary spending.
When we are low on cash, we tend to cut back on the “non-essential” spending. The interest rates are the lowest they’ve been in history, for that reason we can’t blame the interest rates either. Additionally, the banks certainly aren’t throwing money at people like they used to in the wake of the Royal Commission.
So, where does your money disappear to?
The average Aussie is earning $80K per year (a salary which many of us would say “that would be nice” to) these people pay $18,067 of their income in tax each year. In this country, this is a legal obligation, and we certainly encourage you to pay what you should, however we also need to consider that this represents 22.5% of your income. In other words, the first 1 hour and 48 minutes of work you do every day is for the government. Or if you rather, the work you do in Jan, Feb and most of March goes to taxes. These facts are pretty confronting.
The answer may not be clear. Although we know that simply working a second job may not be the best solution for you. In fact, you typically get taxed at a higher rate (sometimes as much as 48.5%). The result? More than half of the extra hours you work will not be serving your best interest.
“Is your second job making more money disappear to tax?”
At Option Wealth we look at the amount of tax you currently pay, and develop strategies to legally reduce that amount. The increase in cash flow (without working more hours) helps our clients to do more important things with their income. Some of those things could be to pay off their mortgage quicker, invest to provide income through retirement, and to generally have a better quality of life.
It isn’t always about what you earn; it is about maximising what you earn.
We can help you to look at your individual the options. We will develop strategies to maximise your income, and hopefully you won’t be looking for a second or third job just to “get by” anymore.