This is a brief update to let you know that this morning I processed another transaction of ETFs for The Rask Group Pty Ltd’s (our company) new investment portfolio.
This is part of my gradual dollar-cost averaging (DCA) strategy for our company. If you haven’t already read my update, you can see how I plan to invest and run my company in 2023 in this other post: “A look behind my curtain“.
I follow the Jupiter strategy for Rask’s holdings. That is, 90% growth and 10% defensive. I executed these trades using Pearler. See the list of the most popular brokers in our community (updated in real time).
My plan is to keep adding small amounts of cash from the company to a long-term portfolio.
Why don’t you pay dividends to yourself?
For many years I supported The Rask Group through steep but acceptable losses. Since 2017, I have also taken about $120,000 from external investors/shareholders.
Given that my company has many years of accumulated losses on the balance sheet, we’re not paying income tax at the company level (you can carry forward losses from previous years). Because we’re not paying income tax at ~30% of profit it means we can’t generate franking credits for income tax paid.
Therefore, it’s not tax efficient for me to pay a dividend to shareholders (including myself).
Long-term plans
In addition to the tax situation over the next decade, I hope to build The Rask Group into a private investment company that has a couple of primary functions:
- Our Core operations. This is what you know Rask for: memberships, podcasts, mortgages (coming soon), financial advice (coming soon), funds management (soon), events, courses, etc. I think this will account for 90% of our revenue over the next 3 years.
- Private company ownership. This is where I hope to buy whole businesses (e.g. small businesses) but have them run independently. It’ll also include part ownership of medium-sized businesses or when we seed completely new companies with talented management. I’m still a few years away from being able to afford this, at scale. If you know anyone who is early stage, has a proven business and needs smaller cash injections and help (e.g. $25,000 investments, office space and an adviser to the board), let me know.
- A long-term equity portfolio. Things like listed stocks, ETFs, LICs or managed funds. This will be a passively managed portfolio of great companies and diversified ETFs. I believe that if we tracked Warren Buffett’s long-term returns, he could have been more wealthy if he invested Berkshire’s spare capital in index funds versus leaving it in cash or short-term bonds (which he would invest during a crisis). Although it’s a risky way to allocate capital (because index funds could fall when you need to sell them) I think it can be done prudently, in moderation, over time.
Any questions, please let me know in the community.
Cheers!
Owen
