Business

Penny-wise fools can end up broke without proper help

THOSE with knowledge of literature will know of Geoffrey Chaucer, the Father of English literature who wrote in old English when most writers used Latin or French.

His cautionary tales from the 17th century have been translated into modern English - saucy, funny, and just plain crude, really.

Today's column is a cautionary tale too. It's not about naughty nuns, but fools being penny-wise and pound-foolish.

Here is a man who came to see me about how he might defraud his trustee in bankruptcy.

His know-all mate, who loudly, and often, criticises professional people such as accountants and lawyers as rip-off merchants and useless, has recommended this guy see me for advice. Why me?

It seems this mate of his is somehow convinced that I am such a soft touch that I'd be willing to go to jail for having aided and abetted serious fraud.

And of course, because mates are mates, I'd likely be willing to do it for a six-pack!

Here's the scenario. This guy is a bankrupt former builder.

He has received a delayed payment from a family estate with which he has repaid debts to a couple of mates who lent him dough after he was bankrupted.

Of course, without telling his trustee, who has got wind of it and wants to know the ins and outs.

Now his father has also left him a large sum and lo and behold he has also won a lot of money in a lottery.

He is bankrupted and owing creditors. He assures me they falsified their claims!

Now he's screaming blue murder because he's going to have to repay these "crooked" creditors.

Of course his learned mate has told him that liquidators are bigger rip-off merchants than accountants and lawyers, saying the creditors will get nothing anyway!

So what would have happened if this man had sought professional advice in the first place and handed over some professional fees?

Firstly, if he'd consulted an accountant with my experience in the building game, he'd have avoided bankruptcy in the first place.

For years I've watched project builders spend today what they hope to earn tomorrow.

Showing people like them how to manage cash flow and how to price to ensure profit costs professional fees, of course.

But wait - there's more.

What was this guy doing in the notoriously fickle building game operating as a sole trader, anyway?

In this case, it would have cost a few grand to save thousands and bankruptcy!

Then there's the father's will.

When he looked like going bust he should have gone to the old man with his adult son and solicitor in tow and had them set up a testamentary trust with the son as trustee.

If he'd paid a grand or so to the solicitor, his inheritance would have been safe!

But the stupidest part in all this story is this guy going out and buying lottery tickets in his own name - while bankrupt.

A 20-minute consult with a solicitor, accountant or financial planner, costing a hundred bucks, and a bit of consideration to his trusted son - and the winnings would have been all his when discharged from bankruptcy.

So here's a guy who is going to lose a lot of money to his "crooked" creditors and "rip-off" trustee because he was too silly to spend a few bob on professional advice to bullet proof himself.

By the way, that mate who hates solicitors so much does so because a firm which rightly charged him fees failed to enforce an invalid home-made contract.

There's something to be learnt there too!

Bob Lamont is director of Corporate Accountants situated at the Night Owl centre. He can be contacted on boblamont1947@gmail.com.

Topics:  accountant bankruptcy business fraud good business opinion



Foodies' scavenger hunt: are you up for it?

IF YOU want to give your tastebuds the flavour sensations of a lifetime, here is the ultimate foodie’s scavenger hunt through Brisbane.

5 minutes with Israel Folau on footy, life and love

Israel Folau and Silver Fern netballer Maria Tutaia announced their engagement last last year.

WE CAUGHT up with football star and Brisbane ex-pat Israel Folau.

10 reasons to head to South Bank this summer

Head to the only inner-city beach in Australia!

South Bank has a ridiculous amount of fun things to do.

Five mammoth events you need in your life

No Caption

BRISBANE isn’t known for doing things by halves…

How to make your child's every dream come true...

Take a dip at South Bank in the inner-city beach.

‘I DON’T want to do fun things, Mum and Dad’… said no child ever!

How to do Eat Street the right way

Know where to start and where to end to avoid a huge food coma before you get to experience all the goodies!

EVERY Friday and Saturday night, Hamilton comes alive.

You can do WHAT in Brisbane?!

Talk about arriving in style! Take your pub crawl to the next level with a helicopter!

BET you didn't know you could do these things in Brisbane...

Heatwave drove up electricity spot price, energy company claims

Boyne Smelters general manager operations Joe Rea announced job cuts due to increased power prices.

National Electricity Market working as designed

NEW FIGURES: Thousands on the hunt for more work in region

New figures reveal how many people were unemployed last month.

'Game changer': Gladstone businesses take in $600k from job package

Glenn Butcher MP.

Gladstone businesses sign up for work package boost.

Local Partners

WATCH: Relive Barnsey's rocking Gladstone show

JIMMY Barnes came and delivered for Gladstone music fans on Saturday night.


New Year New Yard

Win $1000 Bunnings Voucher
Learn More

Puppetry of the Penis secrets revealed ahead of show

The famed Puppetry of the Penis is coming to the Sunshine Coast for shows in Noosa and Caloundra.

WARNING: This interview contains adult themes and traces of nuts

Noll meltdown won't affect Gympie Oz Day concert

Shannon Noll

Photo Contributed

Shannon Noll is still expected to perform in Gympie next Thursday

11 huge events coming to Gladstone in the next 6 months

Events coming up in Gladstone in 2017.

Your guide to exciting events coming to the Gladstone region

Jennifer Aniston wants to return to TV

Jennifer Aniston is desperate to make a return to TV

Madonna hopes for election unity

Madonna hopes Donald Trump's election will "bring people together"

JK Rowling rules out Cursed Child trilogy

JK Rowling has ruled out a 'Cursed Child' movie trilogy

Buckley's chance in psychological thriller

James McAvoy and Betty Buckley in a scene from the movie Split.

Broadway veteran back on big screen with James McAvoy

Daniel MacPherson: acting’s a bit like channel surfing

Australian actor Daniel MacPherson in a scene from the American TV series APB.

THE Aussie export talks about making his mark in the US.

Shopping isn't fun if you can see dead people

Lisa Marie Woodham will be giving readings in Gladstone until Saturday January 21.

Shopping isn't fun if you can see dead people

By the water's edge

Secure your seachange

Gladstone market's confidence coming back for 2017

Core Logic property statistics reveal the region's median house price dropped 16.7% to $275,000 in the September quarter.

Region's median house price drops 16.7% to $275,000

HOT PROPERTY: Money to spend on land, buildings

File picture.

Sale, leasing of industrial real estate picks up in Mackay

Collapsed Coast company could owe up to $5 million

Staff, ATO, landlords among those out of pocket.

Ipswich block of dirt sells for $582 a square metre

JUST SOLD: A property on the Brookwater golf course sold for a record-breaking $612,000.

Property smashed 2007 record by close to $100,000

Ready to SELL your property?

Post Your Ad Here!