Cashflow and Compounding

Always look for a genuine quality investment and let the tax deductions be a bonus.

If you are expecting negative cashflow, remember that you will require capital growth to be adequately significant to compensate for these year-to-year cashflow losses. (To learn more about this, be sure to read the Debt Management and Leverage module.)

You may have noticed that there is no mention of superannuation as an investment option. As mentioned in other modules, superannuation, managed funds, and unit trusts are all examples of vehicles to invest through. They are not investments in themselves.

All of these tax structures hold investments within, and the investment performance is dependent on the underlying investments, in addition to the taxes and fees. There is considerable benefit in understanding these tax structures and how they influence your investment returns. (To learn more about this, read the Tax and Structures and Superannuation modules).