Most people live the majority of their lives with no idea how to manage their finances. Financial illiteracy leads to people making the wrong financial decisions, leaving them financially crippled for decades and, sometimes, even for entire lifetimes. Here are the three top benefits that come from investing in a sound financial education.
Understanding How Credit Works
According to Money Under 30, “A credit score is a three-digit number derived from the data in your credit report that indicates how likely you are to repay a loan on time in relation to other borrowers.” Not understanding the ins and outs of credit can lead to irresponsible money borrowing. This is a dangerous trend as credit comes with interest to repay. The higher the amount you owe in interest, the less appealing your credit score becomes. Financial literacy means making sure that you only buy items that you need using a credit card, then paying the item off as quickly as possible to avoid accruing interest. It also means ensuring that your credit listing is good enough to allow you to borrow credit in case of emergencies.
Another mistake that many people make, and one that prevents them from attaining true financial freedom, is lack of knowledge on how to grow money. More than half of Americans who have disposable income lock their remaining funds in retirement schemes, college funds, and other savings plans.
According to Quest Education, “Building a retirement plan and securing retirement funds is yet another significant reward of financial wisdom. When the time comes for you to quit work, you’ll be able to do so with confidence.” It is also good to think about trying to grow money by investing in businesses with short term returns. Most people are scared of trying their hand in business or investing in stocks and the real estate market because they do not understand how it works. Most financial institutions have financial advisors who can help you grow your money.
Planning for Your Sunset Years
Most people have it in their minds that they have to work until they reach the age of 60 or later before they can retire. All of their retirement plans, therefore, are based on the premise that they will be working until later in life. They do not realize that there is the possibility of retiring earlier if they are able to manage their finances. According to Ontario Security Commission, you should “research your income options and set up a plan so you have an income from the first day you retire.” This means that anyone who has planned for their retirement would have made solid investments that they can rely on after retiring.
These are just a few of the benefits that come from actively seeking financial wisdom from the right places. You need to start thinking of how to grow your income and maintain your savings as early in your career as possible to avoid future financial drawbacks.
Many companies have chosen to move overseas due to the potential business advantage that only moving can offer. For example, Singapore, London, and Hong Kong are all popular business hubs that are only growing with time as they offer new opportunities for aspiring international brands. But there are critical financial and general business considerations that must be made prior to making this type of move:
Look at Rules and Regulations
Every country has different rules and regulations for businesses. These must be researched and understood prior to making the move. Many businesses seek advice from an attorney regarding the specific laws of the country. If the business does not comply with the laws, they can prosecuted and receive serious fines. This can be avoided by knowing the laws ahead of time. There are also specific countries that restrict certain types of businesses from setting up. If the laws and regulations are not researched ahead of time, the business may be wasting their money, time, sourcing staff and marketing materials for an impossible task.
Taxes, banking procedures, and finances are handled differently in nearly every country around the globe. Even if the taxes are considerably lower than in the home country of the business, there is still a great deal of paperwork involved. The business must understand not only the laws of the country, but what must be done prior to making the move. One of the best ways to prepare is by consulting with a tax expert. One of the biggest hurdles businesses face is registering their business for taxes. If the red tape is dealt with ahead of time, the business can open their proverbial doors much sooner. Your business will not be able to operate until the tax registration has been completed.
If you’re planning on moving to a country where they use a different language than you’re used to, the impact of this language barrier must be considered. This will impact the daily operations of the business and can even affect the company financially. If neither you nor your staff are fluent in the native language, an interpreter will need to be hired on full-time to bridge the gap. If you try to wing it instead (or heaven forbid, rely on Google Translate), this can lead to miscommunications and mistakes that will impact your business’ bottom line. Alternatively, you and your staff could take language lessons prior to the move. This is an excellent way to help ensure the productivity of the business, and will enhance your understanding of how the business is working in its new location. Furthermore, you will appear more impressive for taking the time to learn a new language.
The culture of a country is often critical to the potential success of a business. A particularly good example is Western countries. There is always going to be something that is acceptable in this half of the world that will cause offense elsewhere. The best course of action, then, is to study the culture of your destination prior to making the move. If a large cultural breach occurs, it may have dire consequences for your business. Sourcing an expert is the best and most efficient way to circumvent this issue. If possible, visit the intended country to get a feel for the culture personally. Speaking with business consultants can also help you decide whether you are truly making the right decision for your company. Lastly, it can be helpful to remain current regarding foreign affairs. You can obtain a better grasp of the market you will be jumping into by reading online and watching foreign news channels.
In most cases, the financial benefits of the move will take time to manifest. Although this is good news for the future, the initial move will be expensive. This cost must be calculated and factored into your budget, because otherwise moving to a new country can potentially bankrupt your business. Book an appointment with a financial advisor who is well educated in both finances as well as the financial aspects of your destination. You will also need to pay close attention to the current exchange rate. If money is exchanged at the wrong time, your business can easily lose thousands of dollars.
Consider the Bureaucracy
Without proper preparations, you can easily become overwhelmed by the laws and rules which comprise the bureaucracy of the country. A business must conform to the bureaucracy to be legal. Some countries require a new business to have another business already legally formed in another country. This business must act as the investor for the new business. Furthermore, the business must understand the language or have an interpreter to grasp the supply chain and the insurance policies and licenses required by the country. For example, if the new business is opening in Singapore, it is a good idea to find a business partner in Singapore that the business can trust. This individual will help guide you past bureaucratic barriers in Singapore.
Once the business has made the decision to move to another country, it is critical to understand the business structures in their home country are probably going to be completely different than in the new country. The business must know which business structure can be successfully adapted for their company. There may also be restrictions as to which structures the business may choose. Many businesses are restricted to one structure due to the size and nature of the business. Understanding these concepts ahead of time can save the business a lot of time, effort, and money.
Redesign Your Marketing
Even if your business was very successful in your own country with your marketing strategy, it does not mean that the same strategy will be effective in another country. Before moving, it is absolutely imperative to conduct a round (or several) of market research specifically for your prospective audience in the new country. You need to understand your new target audience inside and out — what they want, what the competition is doing to appeal to them, etc.
When a slogan or product name is translated into another language, the meaning can change entirely. The wrong slogan can be extremely detrimental to the business. This can effectively damage the brand and shut down the company before it even has a chance to get started. On a less extreme scale, there may be no literal translation and you will risk confusing your new customers. There is where hiring an expert becomes imperative. This will increase the initial costs to set up the business, but it can save the company millions in potential humiliation and damages.
Many businesses require a factory for their operations. The costs of establishing a new factory in the target country must be weighed against simply sourcing a new factory. Plant equipment is often expensive to replace because it is highly specialized. Thousands can be saved by having the factory relocation managed by a specialist. The best way to see which option is more feasible financially is to obtain quotes for removal and relocation. There may be a lot of red tape to cut through, however, before you will be able to move forward.
The Bottom Line
Relocating a business to another country can be a phenomenal success or a total catastrophe. The key is taking the time to research the culture, customs, language, tax laws, bureaucracy, costs, and other strategies necessary to succeed in another country. Once you have taken the right precautionary steps, your international move could be the best thing to ever happen to your brand. Turn to PPMT Strategic Group’s professional business advisors for guidance today!
For most buyers in today’s marketplace, dealing with a new business can involve a period of developing trust and determining whether the company is an honest dealer or an unscrupulous moneymaker. Fortunately, there are numerous ways to make sure that your money isn’t being wasted on unnecessary items or on costly but unneeded services. Here are just a few ways that businesses try to shortchange their customers, and what you will need to consider when dealing with them. By following this advice, you can be sure that your money is safe during a business transaction. And that is good business!
Focusing on the Profit, Not the Customer
So why do some businesses not mention a deeper problem that should be addressed? According to this customer service trainer, “As some companies grow, they purposely change their shift from customer focused to bottom line focused.” A client with constant problems is something of a cash cow and will have to return multiple times a year for services they can’t fix on their own. But the opposite may also be true. By fixing a visible problem, a business can be quickly rid of a client who may need to return to fix a bigger (but less noticeable) issue in the future; in the end, the business gets a quick payday, but they will not have to deal with a client’s problems down the road. One way or the other, the business is profiting off of the specialist knowledge they are able to withhold from their customers.
Recommending Unnecessary Services
We’ve all been in a shop where employees are paid based on a competitive commission scheme in which the employee does not make money if they don’t sell you something immediately. It may surprise many of us that we didn’t actually need what a suspiciously over-enthused salesperson has spent the last 45 minutes convincing us that we can’t do without. In fact, a good business will try to provide a service or product that will solve a problem you are having, but a bad business will try to charge you for something that doesn’t actually help you in any way. Be sure to look for salespeople or company representatives who aren’t afraid to tell you that you look terrible in that new pair of jeans, or that your car doesn’t really need a flashy new set of tires when the ones you have are doing just fine. If someone won’t tell you what you don’t need for fear of losing a sale, they probably view you as a meal ticket rather than as a long-term client.
Only Fixing Problems You Can See
According to some auto shop specialists, “When looking for an auto body repair shop, make sure to choose a company that not only addresses visible damage, but also inspects your vehicle for hidden damage that may have occurred.” Whether it’s in dealing with a car mechanic, a plumber, a dentist, or a real estate developer, it is important to note that one way that unscrupulous businesses will try to make extra money off of you is by fixing the problems you can see while neglecting the problems you can’t.
Be Loyal to Those Who are Loyal to You
Remember that however “nice” a professional is being to you, you don’t owe them a sale. It is okay to question the logic of what a salesperson is telling you, for example. By recommending costly and unnecessary services, many businesses feel that they can “pull one over” on their customers since the general public is not trained on what to look for in solving a problem with their car or plumbing system. In the age of the Internet, fortunately, it’s possible to look up the kinds of reviews that a business is receiving from past customers. According to this business site, “84% [of consumers] trusted online reviews as much as personal recommendations.” It is also smart to get a second opinion from a similar business which can help you determine whether a proposed service is truly needed or is just a costly add-on with no inherent value.
For these reasons, knowing how to determine a business’s credibility is a crucial step in making sure that we’re not overspending on pointless services or neglecting problems we don’t have the knowledge to discover on our own. By using a bit of shrewdness and detective work, the process of solving a problem doesn’t have to be painful to our bank balance; sure, we can’t know everything about every subject in the world, but we can know how to determine the trustworthiness of the people we do business with.
Unfortunately, these situations do happen but it doesn’t have to be the end of the world for you. Protect yourself and your money by doing your research before deciding a business to support with your patronage. Expensive repairs and purchase are like investments and you want to make sure that the investment will pay off instead of fall flat. Check out this article about what you need to know regarding investments to get a leg up on your research.
It is possible that a low credit score will prevent you from buying a home. However, there are other variables that lenders will look at when making a loan decision. Furthermore, there are loan products designed for people with average credit or who have made credit mistakes in the past.
How Do Lenders View Credit Scores?
Your credit score will play a role in determining both whether you are eligible for the loan and what terms to extend. For instance, someone who has a credit score of 800 is more likely to get the lowest advertised interest rate compared to someone who has a score of 640. Those who have good credit may also be entitled to get a loan with a lower down payment. Down payments can range from 0 percent all the way to 20 percent or more based on the loan product that you choose.
What Else is Taken Into Consideration?
Low scores won’t necessarily disqualify you from getting a loan. However, there needs to be something that offsets the low score like a low debt-to-income ratio or a significantly high yearly salary. If you have other assets that could be liquidated to pay for the home, that may provide justification for approving your loan request.
Your credit score needs to be taken in the context of the type of loan that you are asking for. For instance, if you have a credit score of 550 to 640, you may still qualify for an FHA loan or a USDA loan. Government issued loans such as VA home loans will also vary in regards to minimum credit scores, but since the government wants more homeowners, they will do what they can to help. However, it may be almost impossible to qualify for a traditional or jumbo mortgage.
Are Loan Approvals Universal?
If you have been turned down for a loan, don’t assume that another lender wouldn’t approve your application. Each lender has its own criteria when determining who is eligible for a mortgage. For instance, a local credit union may approve your application because it wants to earn your business over the long-term. Therefore, it may have impose lower minimum credit scores for a home loan.
Your credit score alone will not determine whether you are approved for a mortgage or not. To ease your mind, feel free to contact a lender before applying to discuss how your credit score could impact your chances of getting a loan. Lenders may also have tips as to how you can improve your score and increase your chances of obtaining financing.
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Starting a new business isn’t a task you should take lightly. Even if you have the most exceptional product or service in the world, that alone isn’t enough to ensure the success of your business. There’s a lot of preparation involved in putting together a business model, and the difference between a failed and successful business often comes down to planning. Here are some steps you can employ to improve your business’ odds of success.
Crafting a Business Plan
The model for your business may make a lot of sense in your head, but it’s hard to know how well it will work once you’ve hit the ground running. Creating a solid business plan will help you implement a unified protocol for every aspect of your business and help you keep your eyes on the prize when you get inevitably mired down in the details. You’ll want to start as early as possible since a good business plan encompasses practically every level of your company’s development.
Enlisting the Right Help
Starting a business requires a lot of red tape, and it’s a task that most prospective entrepreneurs aren’t equipped to handle alone. It would be advisable to get a lawyer and CPA on retainer as soon as possible. Be judicious in your vetting process, as these professionals will serve as two of the most important assets in your business’ growth. A little research can go a long way, and the cost of keeping them around will be well worth it in the long term.
Maintaining a Sensible Online Presence
Most businesses today are online, and if you want your company to survive, having a digital presence is a practical necessity. But the algorithms that search engines like Google and Bing utilize means that the content you want your customers to see has to be smartly crafted to give them the highest presence possible. That’s why it’s so important to utilize SEO in digital marketing. A smart marketer can provide you with the well-written content and targeted keywords that will drive your site to the top of the search results.
Budget, Track, and Establish Goals
It’s easy to fall into a mental trap that to be a successful startup company, you must look like one of the large, established corporations: having an office in the middle of downtown, catered meals, and lavish employee entertainment. Instead, to truly succeed, you need to remember that every dollar is vital to the success of your new business. Just as your company is starting small, make the requirements upon your business match the size. It’s ok to start in a single-room office. Setting financial goals for your company will establish when the move to a bigger office, or offering more employee snacks, is financially allowable. As a startup, every dollar needs to be tracked and accounted for.
Don’t Be Afraid of Setbacks
There are bound to be complications you couldn’t have predicted as your business grows, and you’re likely to make mistakes you could have avoided. This is to be expected, and being an entrepreneur means accepting these complications and being able to roll with the punches. Learning to delegate responsibilities and getting in a frame of reference where you’re ready to admit you don’t know something and ask a specialist for advice is one of the most valuable traits a business owner can possess.
For more information when starting a new business, check out these articles:
In today’s society, it can be easy to be anxious thinking about debts and how to pay them back. College is the typical route that high school students take to further their education and have a greater chance of getting hired at that dream job. There are also other routes taken, which include starting a business, using a personal loan for whatever goals are on the list and buying a house that can elevate a family to happier times, to name a few. There are many ways a person can achieve their goals, and while going into debt can be intimidating, it can also be rewarding when success is finally grasped. The types of loans that one can get to achieve success, in whatever area of life is desired, are, finally: business, student, personal, and mortgage
Businesses run by individuals, young and older, are becoming more and more common in today’s world, especially as social media grows more advanced each year. There are a variety of businesses run, today, such as bookstores, music stores, and bakeries, etc. A business loan can help get your business off the ground. The best source for these types of loans would be to go through the U.S. Small Business Administration (SBA), according to debt.org, where a variety of options will be available.
While education is becoming more and more expensive, the chances of getting hired are astronomically higher, compared to those who don’t further an education, unless connections and hard work are pursued. Of course, it is very possible to earn a positive reputation and achieve that position in the field you’re studying in, if you apply yourself 110% of the time and promote your skills. The information acquired in school, as well as the skills taken from the extensive work required, is significantly more than if you weren’t to pursue a higher education. It takes a significant amount of determination, organization, and time management skills to be successful, especially in school. This is why it is important to have excellent attention-to-detail, a great understanding of financial responsibility, and due diligence before taking out a student loan. While it can be expensive, there are many student loan companies that are very helpful with easy to set up payment plans, as well as guidance, whether it’s from your parents, counselors at the school, or student life which hosts free classes regarding budgeting and time management. Student loans are very beneficial because not only will your education be paid for; you won’t have to pay them back until after you are finished with school! It is definitely worth it, because education in the United States is expensive, and education is important to many.
There are many reasons why a person would take out a personal loan, which would include: paying off other debts, getting a car, going on vacation, or updating a wardrobe of the family. Personal loans are based on your credit, so it is extremely important, as it is with all loans, to have excellent financial responsibility when spending these funds. Depending on your credit history, the amount awarded to you will range in the amount.
Families everywhere are building their houses from the bottom-up, or are trying to find newer houses to purchase and it is an incredibly expensive process to invest in. While it is expensive, it is also very cheap in the interest rate, comparing it with the other types of loans available out there. Though personal loans based on your credit, so are all loans applied for, so be sure to take out a credit card, buy jewelry, or finance a car, so you can build that credit and accomplish your financial goals!
Did you know that parents have individual tax credits for their children? Some of these might be used to defray your costs. Understanding tax credits as a parent can help you make ends meet.
Child Tax Credits
According to Tax ProEz, last season saw the addition of a due diligence checklist for the Child Tax Credit, the Additional Child Tax Credit and the American Opportunity Tax Credit. Most parents know that they can count their children as dependents on their tax forms. This is useful because it lowers the amount of taxes withheld from your paycheque. But, do you know about the other valuable child tax credits?
Parental Tax Benefits
The good government wants to encourage specific beneficial activities, such as parenthood. Allowing parents to deduct expenses paid for their children only makes sense. Think of how much money you spend on your children.
You buy them clothes, toys and pay for their school activities. Shouldn’t the government give you credit for being dutiful in paying these expenses? Here are a few of the more popular Child Tax Credits:
Earned Income Tax Credit (EITC)
Child Tax Credit (CTC)
Additional Child Tax Credit (ACTC)
American Opportunity Tax Credit (AOTC)
You might find that you can qualify for one, but not another. These tax credits may or may not be refundable. Refundable means you can get the money back with your tax refund. Wouldn’t that be nice?
IRS Cracking Down
Unfortunately, the American government is out of money. It passed its credit limit, and its debt is now higher than its revenue. The Internal Revenue Service (IRS) is trying to cut down on some credits to save money.
With children, their crackdown has been labeled as “due diligence.” It is similar to loans, where the banks make it more difficult to qualify. The same is true for Child Tax Credits.
The due diligence checklist for the Child Tax Credit is meant to determine who qualifies and who doesn’t. This is a refundable tax credit and very popular. The Internal Revenue Service is cracking down on tax filers.
The Child Tax Credit Checklist is Form 8967. This due diligence checklist for the Child Tax Credit has three pages and seeks to gain more detailed information on each child. There are questions concerning relationship, residency, citizenship, physical presence and so forth.
You can see if you qualify for the Child Tax Credit. Just be warned that it will be more challenging to qualify due to new IRS rules. If you do qualify, you could save some money.
If you need help with your taxes, reach out to us today! We have the tools you need to understand how to get the most money back.
If you want to have your company performing at the highest level possible then you need to use the right techniques. Avoiding common pitfalls is the key to your success, and one of those is your company culture. A bad, or lackluster, culture can really hold you back. So here is how you can improve your culture and how it helps the bottom line:
Your company culture can facilitate collaboration between your employees. When they are working together and feel like they are really on the same time, magical things happen when they come together on projects. This leads to more innovation and better solutions to compete in your marketplace. For meetings, be sure that your office has space for people collaborate, brainstorm, and discuss various work-related things, and set up access to conference room schedules for employees on all levels to access.
Your team’s culture is all about what you actually expect out of them. They will rise or fall to the level you set every time. Set the proper expectations from the start and you’ll have a company culture that is in line with your goals. From training, all the way to ongoing education, instill in your people the mission statement that you have and the importance of it. Then, they’ll have no problem understanding that your culture is one that meets demands and exceeds all expectations.
Judging someone’s work day by how much they are sitting in their chair looking busy is not a way to have a great culture. A true culture of performance minded people will rub off in various ways. When your team understands that they need to produce results, not optics, then they will go above and beyond to reach them. This includes working off hours, but it also means they might take an extra long lunch break some days to relax. Give them this freedom with the understanding that the bottom line is the true metric.
Your business is only as successful as you make it. Instilling a great culture will have resonating effects that allow you to compete in today’s marketplace like never before. So don’t let your competitors get the edge. Make your culture as powerful as possible and enjoy all the benefits above and more, and take into consideration the importance of it in your next corporate and business planning sessions.
As an investor, you want to make smart decisions based on objective criteria. For instance, you may choose to invest in specific sectors of the market or opt for index funds over individual stocks. However, you decide to create your portfolio, a consistent and long-term approach is the most effective way to get the best returns.
Start Saving for Retirement Early
Before doing any of this, you probably want to get as out of debt as soon you possibly can. Afterwards, investing in a ROTH IRA or 401k as soon as you are eligible to do so can provide financial benefits both now and in the future. With a ROTH account, you pay taxes upfront and make withdrawals tax-free in retirement. Furthermore, there is no age at which you have to start taking minimum withdrawals, which means that you can allow the money to compound for a more extended period.
Stay Away From Risky Investments
You should stay away from putting your money into whole or universal life insurance. This is because the upfront and monthly premium payments don’t justify the eventual payout. Instead, you should consider investing in mutual funds as it allows for instant diversification. Index funds can also offer the same type of diversification, and you won’t feel the need to time the market as indexes have appreciated at about 7 percent a year on average over the past 30 years.
Don’t Try to Time the Market
Studies have consistently shown that investors who try to time the market lose money while those who steadily invest through market upswings and downswings come out ahead. It is almost impossible to honestly time a market top or bottom, as price action is driven by decisions made by humans. As a general rule, those decisions can be irrational. Therefore, it is better to use a dollar-cost average strategy to provide the most value.
Create an Automated Investment Plan
If possible, you should have money taken out of each paycheck and put directly into your IRA or 401k. It is also a good idea to have your brokerage take money out of your bank account and deposited into a mutual fund or other investment of your choice. By making contributions automatically, you are less likely to use the money for frivolous purposes.
Generally speaking, those who create and execute a long-term investment strategy tend to have more success in building wealth. In addition to putting money into the market, don’t forget to establish an emergency fund and live below your means to ensure your financial stability for years to come.
As people have settled into the tax year, it is easier to examine the new Tax Cuts and Jobs Act (TCJA) that was passed in December 2017 and went into effect the beginning of January. This new tax bill includes a myriad of changes that affect young families. Here are four of the most important takeaways:
Beginning in 2018 and continuing through 2025 when they phase out, TCJA nearly doubles the past standard deduction amounts. Prior to the passage of this bill, the singles deduction was $6,350. This amount is now up to $12,000. Joint-filing married couples had been sitting at a deduction of $12,700 in 2017 but are now at $24,000. Head of households increased from $9,350 to $18,000.
The amount of individual child tax credits also increased drastically under the new TCJA. Prior to the new bill, the individual credit was $1,000 per child. Under the new rules, families can now claim $2,000 per child under age 17. In a nutshell, the new TCJA effectively doubled the child tax credit. This is a huge boon for those families with multiple children. The incomes at which this credit is phased out also saw a big jump, making more families eligible for the credit. In 2017, the adjusted gross income (AGI) limit for a joint-filing couple was only $110,000 while the new rules push this amount to $400,000. By almost quadrupling the AGI limit, more people will be able to take advantage of this child tax credit.
The new rules also include a provision for a $500 dependent credit. This would apply to those dependents who do not qualify for the standard child tax credit of $2,000. An example of a qualifying dependent would be a college student under the age of 23 or a non-child relative living with you.
As a permanent rule not scheduled to end in 2025, this new regulation allows parents to withdraw up to $10,000 annually federal-income-tax-free if used as tuition at a public, private, or religious at the elementary and secondary level. This can even be used on tutoring services.
Because raising kids is expensive, it is essential to ensure that you give yourself every tax advantage at the end of the year. By taking advantage of all of the deductions and child-related credits, you will make the most out of the TCJA.
Sometimes managing everything can be a bit tough with a family, and so why don’t you let us take some of that burden off of you? Our experts are best able to help you and your family, ensuring that you will get the most from your taxes every year. Meaning you’ll be able to spend more time with those you love, and you’ll be saving as much money as you can so you can protect their futures.