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Affluent Business Owner Invests $3,100,000 in a Portfolio of Diversified Investments

Affluent business owner

A Yield Client Case Study

Bucket company strategy – Investing $370,000 caps tax on earnings at 30% v 47% personal rate and captures franking credits for retirement.   

Investing $3,100,000 in a portfolio of diversified investments through a family trust structure, gives flexibility to distribute income tax effectively.   

Maximised concessional & non-concessional contributions to super for improved tax outcomes 

Making concessional contributions to 18-year-old daughters super, was an estate planning strategy that caps some tax at 15%, with compounding benefit to child. 


At Yield Financial Planning, we understand that being a business owner and a single parent comes with unique financial challenges. That’s why our financial planning services can be specifically tailored to meet the needs of affluent business owners who are also single parents. 

When it comes to financial planning for our clients, we recognise the importance of optimising both business and personal finances. For single parents who are business owners, the interplay between business finances and personal financial goals is crucial to achieving long-term success and security. 

Kathleen is the founder of a successful business in the health & fitness industry, who also happens to be a valued client of ours. As a devoted single parent to a young child, she has been faced with the intricate task of balancing her businesses financial well-being with her financial goals and obligations towards her child’s future.  

When Kathleen first approached us, she was interested in receiving tailored financial advice considerate of her unique circumstances. She was conscious that she was sitting on a lot of cash personally, within both her trust, and company, and was looking to invest the available cash to put the money to work. Kathleen was also seeking guidance regarding our investment management service, along with expanding her child’s wealth in the long-term.   

For this case study, we have obtained our client’s consent, and aim to showcase the tangible advantages that arise from seeking expert guidance in managing the intricate financial affairs of successful business owners. 



When Kathleen first came to see us, our primary focus was to understand her unique financial objectives and to understand her current financial position and plan. Through a collaborative process of discussions, education, challenges, and prioritisation, we honed in on the areas where our expert advice could make a significant impact on her financial well-being. 

One of Kathleen’s key concerns revolved around the surplus cash she had accumulated and missed opportunities for potential returns. Recognising the importance of investment advice, we delved into exploring investment possibilities for her personal assets, her trust, and her company. Importantly, we considered business succession considerations she had and her desire to create a secure financial future for her child, further aligning our strategies with her long-term vision. 

With a keen understanding of Kathleen’s risk appetite and the intricacies of her tax structures, we set out to identify investment solutions that matched her needs. Our goal was to design a well-rounded portfolio that not only meets her financial objectives but also ensure prudent risk management throughout the investment journey. 


Snapshot of Kathleen’s Financial Situation (Excluding Lifestyle Assets)

  • Income: $210,000
  • Super balance: $1,423,000
  • Other financial assets: $3,932,000
  • Business Value: $4,000,000
  • Debt: $0
  • Annual Expenses: $96,500
  • Desired Retirement Income: $140,000 in today’s money


Super Advice and Strategies  

At Yield, a top priority of ours is to optimise our clients’ retirement savings and tax efficiency. For Kathleen, our expert financial advisors recommended a series of strategic superannuation actions to secure her financial future.  

To boost her retirement savings and capitalise on tax benefits, we advised Kathleen to continue maximising concessional contributions to her superannuation account until the age of 67. This approach not only enhances her retirement nest egg but also results in significant tax savings, reducing tax payments by 22% on the contributed amounts. 

In addition, we proposed making non-concessional contributions to her super, amounting to $110,000 in the 2023-2024 financial year and $330,000 in the following year (2024-2025). These contributions ensure her funds are directed to a tax-effective environment, provided they comply with the indexed transfer balance cap. 

Furthermore, to optimise her superannuation management, we advised Kathleen to rollover her current Super balance to an alternative super fund. By leveraging our Managed Discretionary Account (MDA) service, Kathleen gains access to a highly efficient and tailored investment solution, which is also highly cost effective, due to account linking benefits and considering the size of her combined investment amounts.


Affluent business owner


Other Investment Related & Tax Planning Advice  

We take a holistic approach to our clients’ financial well-being, and for Kathleen, we devised strategic investment recommendations tailored to her financial goal of putting her money to work. 

Firstly, we advised Kathleen to speak to her Accountant about paying herself a $600,000 dividend from available funds in her business to another company structure she had. We identified that she had previously made distributions in line with this strategy and by extending on this approach, she could unlock the potential for her to explore new investment opportunities, optimising her financial position.  

Furthermore, drawing from cash reserves within her company and family trust, we suggested that Kathleen invests $3,100,000 into a thoughtfully curated portfolio of diversified investments. By diversifying her assets, Kathleen’s investment has the potential to grow significantly by the time of her retirement, while retaining sufficient liquidity to meet her personal needs in between, securing a more substantial financial foundation for the future. 


Cash Flow Management  

Cash flow plays a vital role in financial stability and success. For Kathleen’s working cash and secure cash savings, we presented a strategic solution by recommending the establishment of a Cash Management Account (CMA) for each entity. These CMAs will serve as centralised cash hubs, with high interest, allowing streamlined management of funds and enhancing overall financial efficiency. 

Throughout the planning process, our team ensured that Kathleen, as an individual, maintains her desired liquidity by always maintaining $100,000 of available cash as a minimum. This approach strikes the appropriate balance between maintaining sufficient liquid assets for immediate needs and deploying the surplus funds to yield optimal returns. 

By implementing these cash flow management strategies, Kathleen’s personal and business needs can work in harmony offering improved financial control, reduced complexities, and enhanced opportunities for strategic investments. Our ongoing support and monitoring will help ensure that Kathleen’s cash flow remains optimised to achieve both short-term financial objectives and long-term financial security. 


Insurance Coverage  

We conducted a thorough assessment of Kathleen’s insurance needs to ensure comprehensive financial protection. For Kathleen, our in-depth analysis led us to the conclusion that she currently does not require any additional insurance coverage as an affluent business owner. 

Our evaluation took into account Kathleen’s existing assets, including the value of her business. Even after excluding the business value, we found that Kathleen’s total assets significantly exceed the amount needed to meet her desired lifestyle needs by a substantial $2 million. 

With Kathleen’s strong financial position and ample assets, we determined that her existing wealth provides an adequate safety net to cover any unforeseen events or emergencies. As a result, we advised Kathleen that she can confidently rely on her current financial resources without the need for additional insurance coverage at this stage. 

Our commitment to providing tailored solutions ensures that our clients like Kathleen have the peace of mind knowing that their insurance needs are thoroughly assessed, and their financial well-being is safeguarded with an optimal level of protection. We will continue to monitor her circumstances to adapt her insurance coverage as her financial situation evolves. 


Affluent business owner


Other Strategic Advice  

At Yield Financial Planning, we continue to prioritise our clients’ individual goals and values, which is why we made sure we addressed Kathleen’s desire to secure her dependent daughter’s financial future. To address this objective, we reviewed several ideas, including standalone investments, family trust distribution and superannuation. We proposed a strategic approach that involves making concessional contributions into her daughter’s superannuation account, ensuring funds are preserved and inaccessible until retirement, thus creating a strong financial foundation for her daughter’s later years. Consideration may also be given to use super funds as a saving vehicle for her buying her first home in the future also.  

To optimise the deductibility of these contributions, we recommended evaluating the timing of income distribution from the family trust to Kathleen. By doing so, Kathleen can effectively utilise both her tax-free thresholds and cover the contribution amounts, enhancing the overall tax efficiency of the strategy. 

Our tailored advice highlights our commitment to understanding and aligning with our clients’ values. By empowering Kathleen with these strategic options, we ensure that she can proactively build a secure financial legacy for her daughter’s future while optimising tax advantages along the way. As trusted financial advisors, we continuously support Kathleen in making informed decisions that serve the best interests of her and her family. 


Estate Planning 

We understand the importance of comprehensive estate planning to protect our clients’ legacies and ensure their wishes are carried out. In addition to the super strategies mentioned, we offered strategic recommendations to secure her assets in the event of her passing. To this end, we advised her to establish a binding death benefit nomination on both her new BT Panorama super account and UK pension account. This ensures that her assets are distributed precisely as per her wishes, providing her with peace of mind regarding the future of her estate. 

Recognising the significance of regularly updating estate planning documents, we encouraged our client to engage with a solicitor to review her will, especially as she hadn’t done so in the last decade. By aligning her will with current legislation and her current circumstances, she can ensure that her assets are distributed efficiently and in line with her intentions. 

Additionally, to safeguard her interests during times of incapacity, we recommended that Kathleen establish enduring powers of attorney. These essential legal documents grant trusted individuals the authority to make decisions on her behalf in the event she becomes unable to do so herself, offering vital protection and support. 


Benefits of Our Advice  

Our personalised financial advice has brought about a transformative shift in the financial journey of an exceptional individual—a single mother who also happens to be an affluent business owner. By embracing our strategic recommendations, Kathleen strategically channelled $370,000 into a bucket company, effectively capping taxes at a favourable 30% rate while unlocking potential future franking credit refunds. Leveraging a family trust, she diversified her investments with $3,100,000, optimising income distribution for tax efficiency. 

As her child reaches 18, our tailored strategy facilitates reduced tax burdens through income distribution, all the while steering her finances towards a promising future by making concessional super contributions. Our advice extends to long-term estate planning, where contributions to her child’s super solidify an enduring financial legacy. At Yield Financial Planning, our bespoke approach has fortified her financial foundation, ensuring tax optimisation, financial security, and the promise of prosperity across generations. Contact us today for a no obligation discussion about how we may help you achieve a secure financial future.

Financial planning advice being given

Important Note
Any information provided here is general advice only and does not consider your objectives, financial situation or needs. This information should not be taken as comprehensive and does not constitute legal or financial advice. You should seek legal, financial or other professional advice before relying on any content. Yield Financial Planning is not responsible to you or anyone else for any loss suffered in connection with the use of this information. Information is only current at the date initially published.

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Free Consultation

Free Consultation

Get started with a free strategy consultation and receive a copy of the Good Fortune Guide – written by James McFall, Managing Director Yield FP and 2020 National Finalist Certified Financial Planner of the Year to help educate you on your Financial Plan.