One of the things about this business is that it is fairly isolating – this is not so much of a problem for me since I am not that good with people at the best of times. So when I travel and meet others involved in the industry there are always one or two eye opening moments. times when you hear something so mind bendingly stupid that you you wonder whether you actually heard correctly. Such an event befell me on my latest jaunt to Sydney when I heard of an FX training group that had an intriguing taxation planning strategy.
Their suggestion was that for people who run their own business and who make provision for their taxation throughout the year by having a seperate tax account that they forget about this tax account and simply trade that money. The argument put forward was that the trading will take care of any tax liability. It certainly will but not in the way they assume. Such suggestions interest me for two reasons. Firstly, they dont attract the ire of the regulator. We have an AFSL and are therefore acutely aware of what you can and cannot say. Secondly, that people actually think this is a good idea.
Is it any wonder that the expression a fool and his money are soon parted still has resonance today.