Strategies

Everyone has a strategy for something, some successful while other strategies experience little to no success. In the 80s and 90s Michael Jordan was a problem for every team in the NBA and many teams established a strategy of how to stop him or slow him down. At the turn of the century, Peyton Manning came onto the scene and every team in the NFL has devised some type of strategy to slow him down.

What is your strategy concerning retirement? Will you have enough money to provide for your family? Or will you need to continue to work well past the age of retirement? Well our government’s strategy for retirement seemed to have been working for the past thirty to forty years. But it also appears that their strategy (social security, Medicare and pensions from corporate America) is quickly fading and failing. It is predicted that by 2010 both social security and Medicare will be bankrupt. That is an amazing and discomforting thought being that 2010 is only three years away.

What have you done to ensure that you will be able to stop working at the age of retirement if not earlier? If you are like most people the answer is, nothing. It is not too late though, no matter the age, you are able to get on the road to financial security and independence.

In the coming entries to this blog I will share some thoughts on “righting the ship” in your life.

Until the next blog…..

Home Based Business

So everything is good in the land of home based business. You have started your business, you are meeting clients, making some connections, hopefully generating revenue, but definitely creating a lot of expenses, you file your Schedule C and all is well.

Think so? Think again.

Did you know that the IRS can disregard all of your home based business expenses? Well they can, even if your business is legitimate.

Here are some steps to prevent that from happening or to show proof that the home based business is legitimate:

(1) If at all possible develop written agreements between your business and your clients.

(2) Develop a written business plan that shows how you plan to make money, identify your target market, identify the products or services you plan to provide and possibly a price list.

(3) Document all business expenses and revenue (an accounting system of some kind would be great to have here).

(4) Open a separate bank account for your home based business that way your personal funds and the funds of the business are separate.

(5) Engage in working the business on a consistent basis.

(6) Be sure to follow these five points of advice and if you need further assistance visit www.thetowlesgroup.com.

Are you leaving money on the table?

Could it be that you are leaving money on the table? In may cases it probably is. This blog will allow you to find out if you are leaving money on the table.

How many income streams do you have working for you in some way?

If you have less than four income streams then there is some money being left on the table.

If more than two of those streams of income mean that you must work then there is money being left on the table.

Let's go a little deeper, shall we?

Take some time and list your strengths (no matter if you are using them or not).

Now review that list and determine if you are earning any income based on your strengths,

Now look at your monthly budget and determine how much money would be left at the end of the month if you cut out all of your unnecessary expenses. By the way necessary expenses are as follows: housing, transportation, food and anything that is helping you make money.

How much of that money are you investing in yourself via personal development or funding realistic investments? If it is the percentage is not over 30% then there is some money being left on the table.

If you want to know how to get your money off the table contact me at accountant@thetowlesgroup.com once you have followed the steps above.

Look forward to hearing form you,

Frederick O. Towles

Accountant

Rule five:
YOUR OUTLOOK WILL DETERMINE YOUR SUCCESS OR FAILURE.

What separates a successful entrepreneur from another that fails? Is it simply one entrepreneur had more startup capital than another? That could impact an entrepreneur's outcome to a point, but that isn't the reason.

What dictates an entrepreneur's success is how he or she views their business idea. Each of us believes our idea is wonderful and that is great, but it is not nearly enough. We have to see our idea succeeding in our minds first. We must see a client or customer being able to benefit from the product or service we are offering. We must visualize what our clients or customers will say about our product or service. We have to believe in the ideas that come to our minds, if even after doing this we still must go one step further.

This is an exert from a business e-book entitled, “It All Begins With A Thought”.

Download your copy today at www.mrbizcoach.com.

“You’re Fired!”

If you are a viewer of the reality show ”The Apprentice”, then these words are familiar to you. These words are meaningless to you and I, as we know this is merely Mr. Trump’s explanation point at the end of the show. What happens when you or I are face to face with our superiors and the phrase “You’re Fired” is directed at us?

As many startup companies develop exit strategies in case of potential disaster or overwhelming success, the everyday person needs to develop an exit strategy as well. What happens if your main source of income all of a sudden collapses or you get to a point in life when you are no longer able to do what you currently do?

Here are some good exit strategy steps:

Make sure that you and your loved ones are covered with a life insurance policy.

Save, Save, Save! Health insurance rates are increasing all of the time. You will need money to get adequate coverage unless another family member can cover you.

Develop a business on the side. Do something you are good at or invest in an asset that is going to produce money for you. This will go a long way if it is in place now.

Begin to hone skills that may be a bit outdated (i.e., enhance your computer and communication skills). If you are let go after years of service, the way you communicate may have to change because you will be in a different environment. In today’s society, if you are not computer savvy, your world becomes very small.

Get out of debt! The quicker you are able to do this the better off you will be if you were to be fired.

Fund the retirement plan. Does your company offer a 401k or a 403b? Are you a participant? If not, get in it right away! You may be able to use this money if an emergency arises upon your termination.

Rethink your lifestyle. Ask yourself what is it that I can do without right now? Could it be going out to dinner every night or are you spending too much money on clothing? Whatever it is, you may need to alter your lifestyle a little.

Look at the trends in your occupation. Research what is going on at your company’s competitors. If your company’s competitors are trimming the department that is equivalent to yours, then it may not be long before your department is trimmed as well. Is there a salary freeze in your occupation (no or very low raises)? Is your position being outsourced out of state or overseas? The handwriting is normally on the wall. We just don’t see it sometimes.

If you don’t have an exit plan in place, you are looking for trouble. Even the highest paid persons who work for Fortune 500 companies are susceptible to being fired. They normally are able to walk away with a plan in place until they are able to secure a position somewhere else.

INVESTMENTS

The term investment is defined by Merriam Webster’s Dictionary as the outlay of money usually for income or profit. This would mean that you can invest your money in a number of things in order to gain a return on your investment (ROI) which can include: real estate, 401K, 403B (for the non profit workers), IRAs, stocks, businesses and the list can be endless.

Many of us have been taught to save money by reducing our spontaneous spending or by “setting aside something for a rainy day” – which is Investing 101. But very few of us have been taught to invest our income in something which is going to return a profit. With the uncertainty of Social Security benefits existing within the next twenty years or so, it is important to learn to invest now in vehicles which will provide you with an income to sustain you and your family in the future.

You may ask yourself, what can I invest in that will allow me to gain profit? My answer to you is that there are numerous vehicles out there for you to invest in. Below you will find a list of a few of these vehicles:

(1) Real Estate
(2) Stock Market
(3) Your business idea
(4) Someone else’s business idea

How much of your take home income are you investing? When should I start? How do I start? Why is investing in vehicles such as the above (in addition to others) so important? What should I do?

My advice to you is to simply educate yourself in regards to the different investment vehicles. Each vehicle has a different ROI and each vehicle has its own amount of risk. Read books on investing, go to financial info websites and speak to professionals.

What's Your philosophy on Money?

As we go through our daily lives, there are many decisions to make. Should I have coffee or tea today? Should I vote for Bush or Kerry? Do I turn left or turn right at the intersection? Should I invest a portion of my earnings or should I use a portion of my earnings on entertainment?

The choices that we make affect our lives. However, while some of our choices affect us temporarily, many of them affect us for an extended period of time. The choice between coffee or tea may not have as dramatic of an effect on our lives, as our choice of the next president. Likewise our choice of direction at the intersection can have a temporary impact, while our decisions regarding our finances can affect us for a lifetime.

The difficult choices how we spend our money are experienced by everyone from teenagers with new summer jobs, to an executive who needs to trim the payroll. The question is simply, “WHAT, DO I SPEND MY MONEY ON?”

In order to make this difficult decision we have to prioritize what is most important to us. If you are one who lives for now then certainly saving for a “rainy day” is not high on your priority list. If you are one to “save for a rainy day” then investing in a vehicle that has a reasonable return is probably not too high on your list either. Maybe you are looking for a “good investment” then entertainment or other self-indulging activities would not find their place on the top portion of your list.

Before we can make wise decisions with our money we must first acknowledge our philosophy on spending. What motivates you to spend money? Are you merely spending more than you are investing? If so why is that the case? What was your familyÂ’s philosophy on spending and investing?

Make a list of your spending or investing practices for the past three months. Be honest about the amounts, where does the major portion of your spending lie? Is it in entertainment such as dining, clothing and other miscellaneous items? Is it in sound investing such as your education, real estate, your business or retirement? Is your spending mostly to pay off debt from entertainment items? When you discover your philosophy on spending you will be able to make wiser choices.

Please send feedback on this article or any other to financialscope@thetowlesgroup.com. We look forward to hearing from you.