HOW DOES P.I.E.S. WORK?

The average share buyer or trader buys shares as cheaply as they can, planning to hold them until the price rises so they can (hopefully) sell for a profit.  If the company has a profit distribution (dividend) in the meantime, they take that as a profit too.  All expenses and capital gains tax must come from the profits of trading, and that is only from the sale of the shares IF they rise in value and the dividends received, if any, in that period.

What we do is far greater and much more profitable.

1.     First, we deposit your investment funds into a management account

2.     Next, we double your funds with a margin loan (see below)

3.     Then we buy shares, with the assistance of the research department of the largest financial group in the world, at the best possible price.  These are shares in high yielding, Blue Chip companies, listed in the ASX top 100 Australian Shares Index.

4.     Now, we sell “options” on those shares and bank the proceeds into your management account (look at the example below).  The buyer of the option has the opportunity to buy those shares from us only if the price margin is such that you make a significant profit.

5.     If the price rises enough, the shares are sold and we bank the profits back into your management account.  Then we buy more shares cheaply, with the original capital from the share sale.

6.     If the price doesn’t rise enough, we don’t sell the shares, the option expires, and we sell another option for someone else to buy the shares (if their value increases enough) in the next option period.  We bank that option sale income into your management account too.

7.     When the company profits are paid as dividends, we also bank them into your management account.

8.     At tax time, we calculate the franking credits on company tax paid and that goes off your income tax for the year.

9.     We calculate the tax deductions on interest payments and other deductible expenses for the year and that goes against your income, lowering your annual tax bill even more.

10.                        Your shares are only sold at a profit to you.  We don’t worry what the share market price is from day to day, like your average trader does.  If the profit isn't there, we don’t sell the shares; we just sell more options and bank the profits into your management account!

We don’t gamble with money; we just bank your profits!

For a full list of the meanings of these share market terms, see the official ASX definitions on the Allied Financial Planning website - the link is below.

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