Three Weeks Left

With three weeks left in the year business owners have a few things to consider:

1. Have you gotten your books in order? - Many business owners use the "shoe box technique" to keep the books in order.  This is not advisable.  Business owners should use Excel or an accounting program such as QuickBooks to record financial transactions during the year.  Within the next three weeks it is important for business owners to get their books in order.

2. Minutes in order? Corporations are required to maintain meeting minutes during the year.  Many small business owners fail to get this done.  It is important to stay in compliance with Federal and State laws that corporations make certain minutes minutes are maintained.

3. Year end information - Many businesses deal with or hire independent contractor (i.e. professional services, extra labor, etc.).  It is vital, and required by law, that every business obtain the name, address and social security number of each contractor hired.  Be sure that you obtain all of the required information, even if the contractor was paid by cash.

4. Time to reflect - After you have resolve the above three matters it is important to reflect.  Reflect on the events that surrounded your business this year.  During this time I suggest that you ask yourself the following questions: (a) What areas did the business fail in? (b) Is there something you can change? (c) Where did the business excel? This helps you place the year in perspective so that the necessary adjustment can be made during the coming year.

If there is a need for assistance in any of these areas, we can refer someone to you.

Year Closing Tax Tips

As we approach the end of the year many people are thinking about the upcoming Christmas holiday, spending time with relatives and friends.  While that is good, we should also think about how we can lower our tax liability before December 31st arrives.  Here is a short laundry list of things that most of us can do:

Spring cleaning in December - Go through your closets and sort out items that you truly need and items that you do not need.  What you don't need give to charity but remember to itemize a list of what you are donating.  Also give the item a true value based on the age of the item and the wear the item has.  This might be a good time to go through rented storage space.

Rid yourself of under-performing securities - If you have securities that are losing money you might want to consider selling the securities in order to take the loss on the sale of stock.  Don't worry, if you don't want to get rid of the security you can always buy it right back at the lower price.

Charity - Consider making a year end gift to a charitable organization.  This will assist in meeting the need of others and give you a deduction all with one stroke of the pen.

These are just a few simple things that do not take a long time to do.  Take some time and save some tax dollars before 2010 is complete.

The Towles Group Inc can assist you further, give us a call at (516) 522-2676 or visit us at www.thetowlesgroup.com. 

Let's Bring Financial Literacy Home

I have written several posts that have involved with becoming financially literate.  In order for any of us to ever enjoy true financial freedom we must become financially literate.  I would like to share with you a tool that I used personally to assist me become financially literate in the early days.  Would you believe it is a board game?  My wife and I along with another couple played this game many times.  It is very fun but most importantly it will begin to shape the way you think about finances.  I even use this game in my presentations on becoming financially literate.  During this Christmas season why don’t you invest in yourself and your family. 

The name of the board game is Cashflow 101.  Buy it, play it, grow financially literate and enjoy time with your friends and family.   This board game could be the start of change of your financial thinking.  

Please note the game is listed in this blog, click on the link to purchase the game.

Charge-offs

Charge-offs on a credit report are detrimental to a person’s credit report.  I often notice that people don’t have their credit reports pulled very often.  Instead they rely on credit monitoring services, which is not bad, but what about the charge-off that were there before the monitoring started?  Others are many time oblivious to their credit score or any derogatory marks on their credit report.

Here is what I suggest, first pull your credit report from a reliable source.  The second thing you want to do is to review your report with alone or with a financial expert.  Then identify all of the accounts that have charge-off attached to them.  Normally you can contact the original creditor and make arrangements to pay the balance, if it is truly your of course.  Upon paying the balance request from the creditor a satisfaction letter showing that the amount has been paid in full.  Then you will want to send a copy of this letter to the credit bureau(s) which the original creditor reported the charge-off to.

In a matter of 1-3 months your report should show that the amount was paid in full and the charge-off goes away.  Your credit score should begin to rise a bit once this happen.  

Please note that the process, although sounds very easy, can be intense. If you need further assistance please feel free to contact me at info@frederickotowles.com.

The Success Addict

There are a number of addictions that we all can admit to or deny.  Some of these addictions are visible while some others are covert and very hard to detect to those on the outside and even to the addict themselves. One of these addictions is success.

Now of course there is nothing wrong with success but there is something wrong with the addiction to success.  Every addiction has at least three things in common: an addict, a supplier and the supply.  In the addiction the addict can be you or I, the supply is “success” and the supplier varies based on what our goals are.  Therefore success can look differently for two different people.  Success for one could be a debt free life, a nice moderate home, good marriage and a few children.  While success for another could be a multi million dollar home, homes in other parts of the world and a huge bank account.

Success addicts feed into what the popular model of success is and do everything they can to obtain that model.  In many cases if you are reaching for a model that you did not really imagine on your own then you probably are going to have a lot of stress getting there.  You might even lose your family or your life trying to attain this model.

The danger in this is that no person can sell you the model of what success is.  In fact you are the only one who can determine what success is for you.  Others can stress the borders of your imagination but only with your permission.  Here is your challenge. Pick up a dictionary and look up the word success to see what you come up with.

Set measurable goals, plan aggressively and work passionately to accomplish these goals. Don’t be a success addict but focus on what success means for you and your family and then do it – be successful!

The Eye of the Storm

The eye of a storm is the middle of the storm. It is believed to be the calmest part of the storm. As a youngster I remember a hurricane hitting the city I lived in. The beginning of the storm brought a lot of rain, hail and high wind. This part of the storm continued for about three to four hours. At some point, the sun came out and the rain and wind ceased. This was my first introduction to the term, "the eye of the storm."  The weather report on television warned people to stay indoors even if the storm appeared to be over. The report confirmed that the storm would start again at some point within the next three hours.


Financially, we have witnessed part one of the storm. This consisted of the government take over of Fannie and Freddie, the Wall Street bailout, the departure of Arthur Anderson, Washington Mutual and other various companies. In addition, the first half of the storm was accented by sub prime home lending, stimulus packages, rising rates of unemployment and corporate scandals at giant corporations such as Enron and WorldCom.


Currently we are in the “eye of the storm”. Things appear to be "stabilizing" in this supposed "recovery." However, in actuality we are not recovering. We are in the “eye of the storm". Wall Street gurus and DC politicians are attempting to comfort the public by using this “recovery language”. Do not be deceived, we are simply in the “eye of the storm”. What should you do in the eye of the storm? You simply realign or establish your financial goals, seek and execute investment opportunities and read to be as financial literate as you can and then gear up for part two of the storm.


What can we anticipate for part two of the storm? That is a good and scary question at the same time. It is quite possible that another super power can arise in the second half the storm. It is also possible that we will see many world governments financially fail, people sleeping in tents, an increase in the levels of unemployment, hyper-inflation and the rise of a single world wide bank.

The Crisis

At this point with the economy in a recession, depression or what Wall Street or the media wants to call it, we need answers.  I call the economic climate we currently find ourselves in as a CRISIS.

Why do I call this climate a crisis? This term is defined by Merriam Webster’s Dictionary as an unstable or crucial time or state of affairs in which a decisive change is impending, especially: one with the distinct possibility of a highly undesirable outcome.  We are currently at this position.

Just yesterday someone spoke to me about a huge percentage of business took a hit.  I told the young man many businesses are taking a hit now because of the economic climate.  Many businesses, especially small businesses, rely on credit cards and bank loans to pull the out or assist them in times like these.  Here is the issue which creates the crisis, the banks are not lending like they normally would which places a hold on loans and lines of credit. 

So what is a business or an individual to do in such a crisis?  I say that both should realign their culture of revenue generation, spending and investing.  This applies to the six figure W2 earner to the non profit organization to a Fortune 500 company.  We must examine the culture in which we do business.  We must ask the difficult questions and make some tough decisions. 

When was the last time you measured your organization’s strengths and weaknesses?  Do you have a product or service idea that is tailor made for the crisis we find ourselves in?  How do you go about possibly replacing key leaders and training others?  These are just some of the questions that must be asked in order to examine the culture and to stop this crisis.  I think crisis management just took on a new distinction!

For more information on financial crisis management contact info@thetowlesgroup.com

The Four A’s of Finances

There is a process to wealth for the non-wealthy and we look to expose this process in this article.

The first step is arranging. Arrange your financial picture that is readable and understandable. You might want to speak with a financial advisor or your tax professional that will work with you to prepare accurate personal financial statements.

The next step is assessing. Once the financial statements are prepared it is now time to assess your financial situation.  How much debt are you carrying?  What areas are your revenue coming from? What opportunities are there to produce more income or shrink your debt?

The third step is set an aim.  After the assessment is done it is now time to create a plan and set a goal.  When you set your goals, be sure to work backwards, yes backwards.  Look at where you would like to be.  Make that your long term goal, three to five years out.  Determine the steps you will need to take from where you are now to where you want to be.  These will be your mid range goals.  What can you do right now (within the next 30 days) to move in that direction?  These will be your short range goals.

The fourth step is to administer. Now that there is a plan in place, the plan must be executed.  Life is full of obstacles therefore you will need to form a team of people to whom you will be accountable to with regard to administering your aim.  It is important that you do something everyday to push you closer towards your aim.  It is also important to select people on the accountability team who will be honest with you and those who are not jealous of your progress.

Statistics Tell the Real Story

It is funny that we focus on what is called a recession.  Is there a real recession going on?  Think about it for a second!  If I look at the entertainment industry numbers I would not know that jobs are decreasing, livelihoods are being threatened and discretionary income is evaporating. Iron Man II has been in the movies less than a week and has grossed $133 million.  Let’s put this in perspective, if we add the films that were in positions 2 – 10 the combined gross was less than $40 million.  There was a lot of discretionary income spent this past week.  I wonder how many are worried about the recession but still went to see Iron Man II. 

It seems even in the midst of economic hardship the entertainment still does relatively well while other industries feel the effects of the hardship more severely.

Watch the Greece

Wow this may be a sign of what's to come! In America we almost saw the collapse of corporate America. Right after we expierenced the "Great Bailout" orchestrated by the US government.  Now we are witnessing the fall of a government. If you have watched the news at all over the past month you would have heard about the financial debacle going on in Greece.

Take a close look at what has happened in Greece. First, Greece's expenses had grown more than its production. Second, the Greek government tried to help itself by continued spending and other government programs. Third, the people of Greece suffered from high unemployment rates and no job security.  Does this sound familiar? Could this happen in America? The short answer is, yes it is!

We should all listen to and read more about world financial news!

It Just Isn’t the Same Anymore

When we look over our lives we realize that many things aren’t the same anymore. For each of us our age has changed, for some our weight has changed, money in the bank, aspirations, goals and energy level has changed. While all of this is going on one thing has changed for each of us, our money!

There used to be a time where a person who made over $100K annually would be considered to be doing relatively well. I recently read an article on Bankrate.com that stated two important facts:

(1) Less than 20 percent of the US population produces over $100K in income annually.

(2) What $100K would buy in 1976 would now cost $381K.

These two facts are staggering. This means that prices have nearly quadrupled over the past 34 years but 80% of the US population is probably not in a position to make a significant lateral financial move due to the increase in expenses.

This is sign to you and I to really focus on two areas: (1) scrutinize our expenses and (2) work on increasing our income.

The Cup Is Really Half Empty

Reports are that this year the Social Security fund will pay out more than it actually takes in.  Entertainment costs are increasing – try going to the movies or to a sporting event.  The healthcare reform bill has been signed.  The war in the Middle East is a constant vacuum which never gets full.  Do you see the recurring theme here?  Expenses are rising but there is no mention of revenues rising for individuals like you and I.

This should make both you and I look a little differently at our budget and what we spend our money on.  Right now is the time more than ever not to be optimistic but be realistic.  We need to examine our investments because this is the time, more than any other time, which we need to invest in assets.

What are you going to invest in?

Buyer Beware


The Internet has allowed each of us to have a tremendous amount of information at our fingertips. We are also bombarded with opportunities to make money: working from home, be an Internet marketer, do nothing and get paid, etc. While each of these might be true, buried in all of the real legitimate opportunities lies some traps.

Here are five ways to recognize the traps in the midst of legitimate opportunities. Beware of:

(a) The company requests your resume and a picture – what does your picture have to do with anything?

(b) The company has success stories but when you Google the companies name you can’t find any other information about them – people normally blog about great companies, so you should be able to find some information out there about a given company.

(c) The company doesn’t have a website – if they are making that much of a difference shouldn’t they have a website?

(d) The company says “we want you to collect the money for us” – these are usually illegal operations, be careful.

(e) The company promises that you will make a truck load of money but never discloses its product or service – a business with no product or service is usually a scam, beware! Remember good companies always under promise and over deliver.

In searching for income opportunities please do some due diligence by checking to see if any of these five concepts are true.

The Jobs Creation Act


Many of us credit former President Bush for the Jobs Creation Act. I guess he does deserve some credit for this. But have you taken advantage of the Jobs Creation Act? Well if you haven’t, there is still time and I will share with you how you can take advantage of this Act.

The Jobs Creation Act has three elements: identify, fulfill and retain.

First, identify a business opportunity or an unfulfilled need of people. Second, develop a means whereby to fulfill the need or take advantage of the business opportunity. Third, execute the fulfillment process and then retain the client or advantage received from the business opportunity.

This process used to be the advice given to people who had a job and needed a little more money to make their “ends meet”. Now this process can apply to many more people; especially for those who are currently unemployed or in danger of losing their jobs. Everyone should take advantage of the Jobs Creation Act.

Creating Culture Within Your Business
There are tangible things that are needed in business like equipment, labor and supplies but then there are also some intangibles that can make or break your business. In many cases it is the intangible aspects of business that actually become more important than the tangible items. One such intangible aspect of a business is the culture within it.

Culture is defined as the set of shared attitudes, values, goals, and practices that characterizes an institution or organization. Culture is everything to a business. It is the culture of the business that your customers will experience. If the culture of your organization is professional, then your customers will have an experience that imposes rigorous rules and regulations. The culture in your business should be people friendly, free flowing and orderly.

I could go on all week about creating culture within your business but I will sum it up in four principles:

Cast the vision – In order to create culture within an organization the vision must be cast or articulated to those who are to participate within the organization. Make certain that the vision is communicated in its simplest form even if it is complex.

Sell the vision – It is easier to sell the members of the organization the vision when the leader is also sold on it. The leader must believe that this is the vision for the organization and push through the difficulties that will be encountered while managing the voice of the naysayer.

Resell the vision – From time to time the leader will need to recast the vision. It is important to find different methods to resell the vision. Some suggestions include: having people within the organization read a book regarding the topic, a weekend trip, social gatherings, internal slogans that support the vision, incentives that promote the vision and meetings.

Clarify the vision – Please know that along the way the vision my have to be clarified or adjusted slightly. Therefore, it is important to allow the organization’s members to ask questions so that everyone is clear. Clarity of vision will also come through reselling the vision.

If you want to create a certain culture within your organization follow these four fundamental steps and overtime people will either buy into the vision or they will leave the organization.

Decisions

Life is full of opportunities to make decisions.  Should I go right or left, forward or back, take this job or that job?  Each decision we make shapes our experiences and path of life. Therefore it is important to make the correct decisions.

One of the decisions some must make is whether to pay down or invest their money, especially with tax refund time upon us. Which one should you choose? I would say, do both.  There is a win-win situation if you have the ability to do both. Let’s take a look at a scenario for a moment.

Aaron has $400.00 left over each month after all of his monthly obligations have been met.  He has an outstanding credit card balance of $5,000.00, which is also part of his monthly obligations.  If Aaron uses the $400 each month to pay down his debt, he would retire his debt faster but two things work against him: (1) while paying down the debt there is no money to invest and (2) he might be missing a golden opportunity to take advantage of investments as they materialize. 

But if Aaron were to split the $400.00 reserve evenly between investment and paying down his debt he would enjoy the benefit of retiring the debt a little faster and investing.  Suppose his $200.00 monthly investment generated $500.00 per month, what type of position would Aaron find himself in? Aaron could use the profits from the investment to retire the debt even faster. 

So think about the dual benefit in your next financial decision!

Money on The Table

This year put your money to work for you more efficiently than you have done in the past. This is one of the best things you can do. We consistently work for money. However, for many of us, money never works for us.  It doesn’t matter how much or how little money you have, invest it wisely and watch it work for you.

With the unemployment rate reaching record highs, the stock market seemingly on a recovery run and a little fear in the market, it is a great time to invest.  Invest what do you mean?  Try some alternate investments with the cash you have laying around. 

Who has cash lying around?  More then likely you do! If you have been separated from an employer that offered a retirement plan that you were apart of, then you have money lying around.  Let me show you how to move some of those funds from simply lying around to working for you.  You have the power and opportunity to do some great things this year with the money you have on the table.  Contact me at info@frederickotowles.com. 

The Key to Investing

There are some things that professional investors know that many of us don’t because of their experience, education and instinct.  But there is something that places us all on the same playing field, and it’s not a huge secret – its cash.  The key to investing is having cash available.

Cash is the key because it gives us options.  Take a look at your portfolio and determine how much you have invested in the market.  Are you investing more than 75% of your disposable income?  If so, that might be a mistake. Maybe you should think about only investing 50% of your disposable income in the market. 

In 2010, keep cash on hand in order to take advantage of great investment opportunities as they present themselves.

Are You an Entrepreneur or Entrepreneurial?

Typically we have been led to believe that being an entrepreneur is the first step in financial freedom. While reading Robert Kiyosaki’s Cash Flow Quadrants, I realized that this is not the case at all. Please don’t get me wrong. Becoming an entrepreneur is a very bold move that should be commended. However, we must also understand that being an entrepreneur today many times means that you are a free worker with many more responsibilities to handle.

This post is designed to make us aware of what an entrepreneur is and to identify someone who is an entrepreneurial.

A person who is entrepreneurial is one who has a vision which reaches a little further than an entrepreneur. He or she is able to organize and manage the business. This person is also able to assume the risk of the business. Someone who is entrepreneurial does not allow the business to manage or dictate to them. An entrepreneurial mindset is one that looks to expand the business while building organizational leaders to manage the day to day operations.

It is important to decide which of these you are. Although the functions of both are similar, there is a distinct difference in the time and energy expended for each one. The entrepreneurial person will spend a lot of time developing the business model, structure and culture in the beginning of building their business. However, this person will seek to expand and identify leaders within the organization or from the outside who can manage the day to day operations, thus lightening their load a bit later on in the life of the business. The entrepreneur will always do what he or she knows best, handle to the day to day operations. Sometimes entrepreneurs can suffer from health issues as they put in very long hours, deal with consumer pressure and get very little rest or down time.