Buying trees don't always yield much of the green stuff for you...

Following on from other recent posts about goal-setting, I thought it might be worthwhile to look at one of the traps that we see people falling into from time to time. The agri-business sector has, for a long time, been promoted as an avenue towards paying less tax by borrowing money to ‘invest’ in trees or olives or other such things that tend not to provide much of a yield or growth.

Many of these managed investment schemes also tend to pay ridiculously high commissions to financial planners and accountants when they recommend such products to their clients.

Important note – we never have.

Sure, paying less tax is always nice. I won’t argue with that idea. But, it is far more important to keep sight of your goals and act with those in mind.

Dale used to teach us this focus by asking one simple question; “Does that idea bring you closer to, or, further away from, your goals?’

I think that this is a good way to look at any financial decision. Does buying a collection of trees bring you closer to your goals? Generally not, I’d suggest, unless you own a nursery or can see potential to flog them at a profit come December. Very rarely do we see anyone make a profit out of these things.

A couple of these companies have gone under in the last twelve months, too, which might also give a good indication of just how sound this type of ‘investment’ might be…

There are much more important things to focus on than paying less tax. A massive tax bill usually means you’ve made a massive profit – and that’s hardly something to get too upset about. It also highlights the importance of talking these things over with your accountant well before the financial year is already over, to make sure that you’re still on the right track and not getting sucked into schemes that usually just don’t add up.