Do a Quarterly Financial Review

470480e1gdwufwtHave you met with a professional and done a financial review lately? Every quarter I like to meet with my clients and go over any changes that have occurred in their lives. In many cases, the meetings give me the opportunity to find out what adjustments need to be made in their financial lives.

Life Happens

If there’s been a promotion, we may be able to increase the amount that is set aside for a rainy day or retirement. If there’s been a marriage or new birth, we need to make sure that family members have the right protection. If clients are no longer happy with their job, we need to map out a plan to find a new job or start a new business. Whatever the changes are, there’s a very good chance that my client’s financial life has been affected. I need to know that so we can tweak our prior plan.

Benefits of a Review

One of the major benefits that results from this quarterly review is that it helps my client feel comfortable letting me know what new things are going on in their lives. How? Some people may feel that they’re interrupting advisors. Scheduling a quarterly review sends a clear message that the changing circumstances are important. It also keeps the lines of communication open for events that happen between meetings.

One of the other benefits resulting from the meetings is referrals. Meaning, I get referrals for my business and my clients help those close to them. How? My clients have family, friends, associates and co-workers that need financial advice. Keeping the lines of communication open lets them know that they have a go to person in their financial life. Why not help others have that same peace of mind?

So if you’re working with an advisor, try to meet with them on a quarterly basis to go over what changes have occurred in your life and see how that can impact your financial life. Remember, the meeting may last a few minutes or hours but the impact can last a lifetime.

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Teaching Children the Value of Hard Work

21499q0bflrr39zHard work and doing a good job are valued at every level of society. Whether the work is done by a teacher’s assistant that makes $17,000 a year or the leader of a multibillion dollar data storage company, hard work is recognized as playing an important role in everyday life.

Wealth Requires Hard Work

Many people make the mistake of thinking that if someone starts off with a silver spoon in their mouth they’re going to be on easy street and won’t have to work hard. Granted it’s not the same as starting off as the single child to a lazy parent. However, the great equalizer over time is a dedication to hard work.

This is demonstrated in the fact that roughly 80% of millionaires are first generation wealthy. By contrast, lottery winners in many cases no longer have the money they won after 5 or 10 years. Why? They believed they no longer had to work to keep up with the new expenses created by their wealth.

Hard Work with Chores

The hard work ethic is something that parents in all income brackets can give to their children when they’re young. That process can start when parents give chores to their children to do around the house. Not only do the chores show young people how to work hard, but they also show them how to be accountable and responsible. That responsibility means that they are answerable not only for themselves but other family members as well. They are depended on and that carries a valuable lesson throughout their lives.

Hard Work after School

As they get older, the lessons of hard work can be learned in the work children do outside of their normal school work. So whether it’s a part time job after school or a school club they are part of, the parent by allowing their child to participate supplements their school education.

And obviously when they graduate from either high school or college they are tasked with the responsibility of working. No matter where they go it’s a valuable lesson they carry forward with them into the future.

So if you’re a parent wondering how you can instill a work ethic in your child, you can always start by letting them take on that responsibility in the home. Dishes, moping dusting, mowing the lawn are all great ways to get them on the road to learning the value of a hard day’s work. Again, dedication to hard work can be the great equalizer in making sure that young people are good contributors to society.

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Alleviate Audit Anxiety

IRS4Internal Revenue Service tax audits can be complicated and time-consuming, but the right tax preparation can make them less stressful. Taxpayers facing an audit should remember these five things:

1. Seek Professional Help

Upon receiving an IRS audit notification, taxpayers should meet with their tax professional to discuss what the audit notification means, what is being requested and what records are needed.
2. Seek Representation

Correspondence audits are handled via mail, field audits have auditors visit a home or business in question, and office audits require taxpayers to report to an IRS office. Depending on the type of audit and individual situation, taxpayers may represent themselves or seek assistance from a certified public accountant, lawyer or enrolled agent. Enrolled agents are federally authorized tax practitioners empowered to represent taxpayers before the IRS.

3. Organize

Ideally, taxpayers should keep complete, organized financial records for the past seven years. Gather all receipts, checks and other records relevant to the audit. Be thorough; having the records the IRS requests readily available will help the audit go more smoothly.

4. Be Concise

Taxpayers should only give the auditor copies of documents the IRS specifically requests and answer all questions honestly. Do not volunteer information that is not requested.

5. Appeal

If taxpayers disagree with auditors’ findings, they can file an appeal with the IRS. Appeal options include meeting with the auditor’s supervisor, or filing an administrative appeal to the U.S. Tax Court, U.S. Claims Court or the local U.S. District Court.
Of course, the best audit is the one that doesn’t happen. To lessen the likelihood of being audited, taxpayers should report all income and only claim credits and deductions they are entitled.

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Journey of a Business Startup

 

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Starting a business is a rewarding and challenging experience. It allows you to be very creative in the way you operate your business and the way you deliver value to your clients. Starting a business also allows you to take control of your life and determine how you will make your living. It does come with challenges, however.

Locating a Space for the Business

In starting my business I came across a number of hurdles I had to overcome. For starters, I had to search for the right location. Embarking on that process meant that I had to look at more than 100 locations in a number of cities to find the right place. I was looking for the area that had the right visibility, rent costs and potential customer income; all very hard criteria to match up. Yet it was work that had to be done as the cornerstone for building the business.

What is the Business Brand Identity?

Another challenge I had to overcome was brand name recognition. Now starting off I was working with a franchise company that had a number of brands under its direction. In starting out I had every intention of working with one of those brands. I did everything in the process up until actually sending the franchise fee to enter into the franchise as a franchisee.

Then one day the parent company decided to just simply discontinue the franchise I was considering. That was never in my business plans. Frankly I had never really thought about it and never even heard about something like that happening in the franchise world. Clearly I needed to do more research in that area.

So I had a decision to make: do something else or create my own brand name. That’s when I had a good conversation with a dear friend of mine. She had never believed in the overall franchise model in the first place, so she immediately said, “Go and do it with your own brand name.” That’s what I did.

Financing Challenges of a Business Startup

Still another hurdle was financing. After the mortgage meltdown, credit received from any bank is tough to get under the best of circumstances. For a startup business it’s just not going to happen. The banks have no cash flow history to go by so they are very hesitant to lend. They may make expectations if there is collateral to get if the business should go under. But those opportunities are few and far between. They want good credit, good cash flow and good collateral. Again, three things that a startup by its very nature doesn’t have.

So out came the credit cards, retirement savings and backup from family members. That’s when the feasibility of a marketing plan comes into stark focus. An owner will examine it a million times to see if there are any holes in it and look to plug them the best way they think. But it’ll never be 100% until the doors open.

These are just some of the challenges that a business startup will confront. Through these examples, you can see that starting a business is a series of challenging experiences which the owner or owners will need to overcome. Some of those obstacles will be obvious and anticipated, while others will be completely unforeseen. The best that a business owner can do is plan for both.

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Parents Should Have Life Insurance

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Once a person becomes a parent, there is no reason for them to go without having some sort of life insurance policy in place. Improving the life of a child is a parent’s primary responsibility. With a policy, a parent can continue their legacy even if for some reason they are no longer around.

Insurance Can Be Budget Friendly

Many parents may think they can’t afford a life policy. However, there are a number of options that do make it affordable for almost any budget. There are pros and cons with each choice, but having something basic in place is much better than not having anything at all. Especially since a child’s future depends on it.

Whether it’s simply keeping a roof over their head or paying for their potential college education, parents want to make sure the future needs of their children are taken care of. Again, it’s their primary responsibility.

So what types of policies are available to a parent?

Term Life Insurance

For starters, a term policy can be set up so that it cost nothing more than a Whopper meal sandwich from Burger King for the month. This makes it much more budget friendly then a cell phone, Netflix or cable TV. Common creature comforts parents find themselves spending money on each month. Under tough financial constraints, a term policy is a great alternative.

One of the downsides to a term policy however, is the fact that it only covers a parent for a certain period of time. That’s the term.

So for instance, if a parent buys a 10 year term policy and something happens to them 11 years after they bought the policy, then their children won’t get any money. The same holds true for a 20 and 30 year term policy. The insurance in essence expires and would no longer pay benefits to the children.

Also, unlike a number of other insurance policies (namely permanent policies) it would not accumulate any cash value. Cash value that could be used for any number of plans or emergencies that may come up in the future.

Permanent Life Insurance

Term insurance can be converted into a permanent life insurance policy. Permanent life insurance policies can also be bought on their own. They are called permanent policies because they are just that, permanent. Meaning, as long as the parent pays the monthly premium, they will have insurance for the rest of their life. Something not available with term life insurance policies.

There are a number of options to choose from when it comes to a permanent policy. They fall under the following categories; universal life insurance, variable universal life insurance and whole life insurance. Each selection has benefits many parents find attractive.

Like I said before, one of the more attractive benefits of a permanent policy has to do with the fact that it accumulates a cash value along with being a pure life insurance policy. Any parent that owns a policy like this has the best of both worlds. An available cash value and life insurance.

The main shortcoming with permanent insurance is the monthly cost. Typically it’s going to be more expensive on a month to month basis than term insurance. Once more, not attractive to some budget weary parents.

Buy Insurance When You’re Young

Buying life insurance at an early age is like giving a gift to your future self. The younger you are, the less expensive the payments every month. And the payment in most cases stays the same throughout the life of the policy. Imagine if you could pay the same amount for gas at the pump that people paid 20 years ago. That’s the idea.

And if budgets aren’t constrained, it makes sense to purchase life insurance even if someone doesn’t have any children. Why should they wait until they’re older and it becomes more expensive? Also, why should they wait to develop a medical condition that might prevent them from getting any insurance at all?

So if you’re a parent, make sure you somehow work life insurance into your budget. And yes, you may need to stretch yourself a little thin. In addition, you may never use it. But you can rest assured, that if you ever do need it, it will help secure the future needs of your child.

 

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