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Common Mistakes People Make Thinking About Asset Protection

Posted by on Sep 14, 2016 in Uncategorized | Comments Off on Common Mistakes People Make Thinking About Asset Protection

When it comes to asset protection, there are some pitfalls that many people fall into since they may not be intuitive. Here are some examples of asset protection missteps that many people take, including steps you can take to make sure your asset protection strategy is optimal.

Not Having a Plan

If you have a substantial amount of assets, then you absolutely need a plan to protect them. Those without assets don’t get their assets targeted of course, but those who do always will. The more assets you have, the greater the urgency to have a plan. Not having a plan in this circumstance isn’t really a viable option.

Underfunding Liability Insurance

This should be a priority whenever possible. In fact, many experts consider this to be your first line of defense. It’s often a wise idea to contact your insurance broker to make your liability limits higher than they are now if you are increasing your assets substantially. You need to have a limit consummate with your assets. And you need to extend the limit as soon as your assets go up. Those who wait often regret it. The extension is often not going to cost too much, and if the amounts are in the millions, it’s dangerous to not have enough liability in case you get hit at the wrong time.

Ignoring Renters

In the case where you make a lot of your assets from renters, you need to make sure you have the right protection from them. This often means creating a corporation or other entity in order to give yourself some protection for your other assets if something should happen. That way, the worst case scenario just means that the entity gets folded up, but your other assets still remain completely safe.

It actually helps to have a different entity for each property in order to properly organize them and properly protect yourself. Again, this should be done sooner rather than later.

Failing to Maximize Entity Protection

You can actually create business entities in a wide number of situations. This doesn’t have to mean only for those who have huge companies and assets in the millions either. If you’re just working on your own, then you are liable for all of your personal assets if someone tries to sue your company since it’s just you. In this case, creating an entity makes good sense in order to protect your more personal assets.

For more information, contact companies like Family Focus Financial Group. 

Won The Lottery? How To Choose Between The Annuity And The Lump Sum Payments

Posted by on Sep 13, 2016 in Uncategorized | Comments Off on Won The Lottery? How To Choose Between The Annuity And The Lump Sum Payments

Everybody dreams of winning the lottery, but when you actually and finally do, you will be faced with some difficult choices. The first major choice that you will have to make is do you choose the annuity payout or do you choose the lump sum? Here is how a financial consultant may advise you, based on your personal situation.

Lump Sum

Most people, who are either impatient or have a lot of debt, are unwilling to take the annuity payment of their lottery winnings. Therefore, they choose the lump sum. The benefits to choosing the lump sum payment is that the state and federal taxes are drawn out of the total amount won prior to being delivered into your hands. However, you might have to continue paying taxes on any interest you incur when you place the lump sum of money in the bank for safe keeping. Still, if you win millions of dollars, it is nice to get a big chunk of that all at once.

Annuity Payments

Many state lotteries with huge cash prizes offer annuity payments. This means that your winnings are divided out over a period of twenty, twenty-five or thirty years, and deposited annually into your account. Even if you win a “small” prize of about five million dollars, that is still more money than most people see in a year, every year. Additionally, when you select the annuity payments, you get the full amount of the lottery winnings because you allow the state to hold onto a big part of the money in a bank account that collects interest. You still have to pay taxes on the winnings, but those taxes are usually paid when you file your annual income taxes. A separate document for lottery winnings is available for special cases like yours.

Financial Planning for the Lottery Winner

Finally, it should be stated that whichever of these two payout methods you choose, you need a financial consultant/adviser/planner. You can make your lottery winnings grow if you invest even a little of your winnings, and you can make your money stretch farther if you are frugal and thrifty with your purchases. Just because you won millions does not mean you should spend it like the dollar will have no value tomorrow. Even billionaires do not spend money willy-nilly, which is is why they are billionaires. A financial consultant or adviser can help you create a balance between the excitement of having money to spend and holding onto enough money that you will not be broke in five years.

Need The Perfect Gift For An Infant Or Child? Why Financial Gifts Are Best

Posted by on Sep 7, 2016 in Uncategorized | Comments Off on Need The Perfect Gift For An Infant Or Child? Why Financial Gifts Are Best

Are you looking to purchase a very meaningful gift for an infant or child in your life, but you aren’t sure where to start looking? The gift of financial security, financial assistance, or a financial advantage in life is one of the best gifts you can give, and the sooner you start planning, the more money they can have. You will have to decide which option will be the best for the child you have in mind when considering any of the following financial gifts to give.

Life Insurance

Life insurance is a popular gift for births, baptisms, and other special occasions in a child’s life because you never know when you’ll need it. This would cover the costs of any type of accident that could occur, and it’s also something the child can hold on to for a lifetime. You can get whole and term life options, depending on your budget and what you want the child to use the money for in the future.

529 Accounts

If you suspect that the child may want to go to college someday, but you worry about the staggering costs to do so, setting up a 529 account at an early age is important. This is an account that you can add money to without being taxed on the contributions. You can add money after you open the account, and other family members and friends can add money to the account as well. Make sure you know the details of these accounts for future withdrawals before obtaining this type of account.


You can purchase a certified deposit that will reach maturity over a long period of time, so the child will have more money than you originally invested when you got the CD. The longer the money sits, the more money the CD earns in most circumstances. The child can use this money for anything that they want when they are older or keep it as a savings investment.

These are just some of the great financial options you can look into for a child or infant when you want to purchase a meaningful gift that will be appreciated. Talk with some financial experts if you aren’t sure which choice is the best way to invest your money, or which choice will mature the best over time. Any type of financial gift will be used and appreciated as the child gets older. 

4 Ways An Investment Planner Can Help

Posted by on Sep 7, 2016 in Uncategorized | Comments Off on 4 Ways An Investment Planner Can Help

Are you planning to invest in your own business within a few years and don’t have the funds? The first step to achieving your goal should be to hire an investment planner to help with getting your money in order. There are actually several benefits that you will have by seeking professional assistance. Take a look at this article to discover a few ways that an investment planner, such as those found at Family Financial Partners, can assist with your financial goals.

1. Assess Your Overall Spending Habits

The first service that an investment planner will provide is an assessment of your spending habits. For instance, he or she will ask you how often you go on shopping trips and the nature of items that are purchased. You will then be advised on how to avoid spending money on items that are not vital. The planner will also ask about your daily living expenses, such as utility bills, gas for commuting to work, and groceries.

2. Organize Owed Debts

If you owe any creditors unpaid debts, getting them in order is a step towards planning for your future business investment. A professional planner can help you come up with ways to get lower payments on debts so you can save money as they are paid off. For instance, the planner might suggest that you look into getting your debts consolidated. You will then only have to worry about one monthly payment that is likely less money than when paying the bills separately.

3. Discuss How to Earn Interest On Money

If you want to get the most out of your savings, it is wise to save in a way that will earn you interest. An investment planner can suggest specific savings accounts that you can put your money in while meeting your goal. You must keep in mind that some savings accounts are more ideal for saving than others, as they will earn you more interest on the money.

4. Determine What Your Future Business Will Need

One of the services offered by an investment planner is helping you determine how to get your future business started. He or she will basically discuss how much money you should save for renting or buying a building, as well as inventory. The planning strategy created will depend on the specific type of business that you want to start. Speak to an investment planner as soon as you are ready for the assistance.

What To Know When Buying Annuities

Posted by on Aug 30, 2016 in Uncategorized | Comments Off on What To Know When Buying Annuities

If you are someone who is starting to invest your money so you can provide for yourself and your family in the future, you might already know about bonds, stocks and mutual funds. However, you may not know much about annuities, which can provide you with a fixed amount of money each year. You’ll need to purchase an annuity with an insurance company, but before you do that, be aware of the following tips that can assist you in making better decisions about this type of investment option.

Determine What Type of Annuity You May Be Suited For

There are different kinds of annuities, and that can be overwhelming if you don’t know what kind is best for you. An immediate annuity is one where you invest a certain amount and the insurance company starts payments to you right away. In that case, you need to negotiate the time period over which you’ll receive the payments. A deferred income annuity kicks in once you reach a certain age or after a certain period of time. A fixed annuity offers a fixed interest rate, while a variable annuity is tied to the returns of a particular market, much in the way an index mutual fund is. That means that the interest rate can change over time.

Talking with an insurance agent can give you a better idea of what you may want to select, but it’s important that you think carefully about your own goals and available finances before having that conversation.

Consider Using More Than One Insurer

No matter how well you research annuities, something could happen. Just as the old saying says you shouldn’t put all of your eggs into one basket, you might want to seriously consider splitting your investment money into different amounts and then getting an annuity with more than one company; then you need not worry that problems in one insurance company could derail your entire financial future.

Put in Small Amounts of Money Over Time

If you don’t opt for an immediate annuity, it’s a good idea to think about investing small amounts over time instead of one major investment. One reason to do this is to take advantage of different interest rates, which can fluctuate over time and have some effect on how much your annuity payments will be in the future. Another reason to contribute a little money over time instead of one large sum is that as time passes, you’ll have a better idea of what your future needs may be and you can invest appropriately. You may want to keep more cash on hand, or you might choose other investments, for instance.

Check State Guaranty Coverage

It’s important to be aware that the FDIC does not offer protection or guarantees for money invested in annuities. However, every state has their own guaranty association that can offer you protection up to a certain limit. Check with the guaranty association for your particular state to find out what those limits are, so that you can watch how much you invest to stay in line with those limits, or at least be aware of what kind of protection you’ll receive.

Now that you know more about annuities, work with insurance companies in the area to see which can offer reasonable terms. You can then feel better about your investment decisions.

Tips For Switching To Accrual-Basis Accounting

Posted by on Aug 23, 2016 in Uncategorized | Comments Off on Tips For Switching To Accrual-Basis Accounting

Most small business owners start out using a cash basis for their accounting process. This means that you account for revenue and expenses when they are received or spent, not when they are earned or incurred. This method works well for small businesses that do complete transactions in a short period of time. However, if you keep inventory or you start invoicing customers and permitting delayed payment, you may want to change your accounting method to an accrual basis. Here’s a look at what you need to know about that change.

What is Accrual-Basis Accounting?

Instead of recognizing revenue and expenses when the physical transaction takes place, accrual-basis accounting permits you to recognize revenue at the time of the sale and expenses at the time they are incurred, not when the cash physically changes hands. That means you record the revenue from a large sale when the product is shipped and the expense from your raw materials when you recieve them. Sometimes this means that you’re recording revenue for a sale in one tax year even though you won’t actually receive the cash from the customer until the next tax year.

How Do You Switch To Accrual Accounting?

If you decide to switch to accrual accounting, you need to add a few things to your chart of accounts. First, you need a prepaid expense account. This account will list the expenses that you’ve paid in advance but haven’t received the full benefit of yet. This includes things like insurance policies and annual contracts that are paid up-front.

You’ll also need an accrued expense account. This account is used to track any expenses that you haven’t paid yet but have received the benefit of. For example, you would accrue the cost of the manufacturing supplies you ordered that you’ve already received but haven’t paid for yet.

Finally, you’ll need an accounts receivable record. This is your revenue recognition account where you post all of the sales revenue you’ve earned but haven’t yet been paid for. All customer invoices are logged here until they’re paid.

When something in an accrued or prepaid account is settled, that cost is then transferred to the proper expense or revenue account in the ledger and the accrual is reversed.

One of the most important parts of transitioning to an accrual method of accounting is ensuring that your revenue recognition is accurate and timely. If you’re not sure about how each step should be done or which invoices need to be recognized, talk with a revenue recognition specialist or an accounting professional right away. This may help you prevent mistakes that could be costly in an audit.

Keys to Estate Planning

Posted by on Aug 19, 2016 in Uncategorized | Comments Off on Keys to Estate Planning

The old adage that when you fail to plan, you plan to fail can apply to estate planning. While the state you live in will have a process in place to deal with your property after you die, the best way to make sure that your family members are protected is to engage in some sort of estate planning. At the bare minimum, you need to take steps to handle probate law in your state and county and write a will that will ensure the estate you leave behind is handled as you would wish. 

Probate Law

The term probate law applies to all of the laws that govern what to do with the estate a person leaves behind after death. While some states have adopted a uniform probate law, in most cases, probate laws vary from state to state. Laws also change over time, so not only is it important to research probate law in your state, but it is important to note how these laws change as time goes by. Having taken steps to understand probate law in your state, you will be prepared to write a will that will ensure that your property is dealt with according to your wishes upon your death. 

A Will

While writing a will may seem like a morbid thing to do, you should look at it as an act of love. If you don’t have a will, it is up to the court and your surviving family members to decide what to do with your property. Families have been torn apart by fighting over inheritances. While a will may not lay all arguments to rest, it will at least dictate to your family what you want to have done with your belongings. Once you have a will in place, it is important to update it as you make changes to your property. When you die, you want to have the most up-to-date will possible. 

It is easy to put off estate planning for another day, but in truth, it is never too early to start. After all, you never know when death will come knocking. While you may not directly benefit from the effort you put into planning your estate, you family will. If you are having a hard time understanding the probate laws in your state or writing a will, then you should work with an estate-planning organizer, such as one from Plan My Affairs, who can guide you through the process. 

Four Signs You’re Ready To Sell Your Business To A Private Equity Firm

Posted by on Aug 17, 2016 in Uncategorized | Comments Off on Four Signs You’re Ready To Sell Your Business To A Private Equity Firm

For some entrepreneurs, the thrill of starting a business from scratch is the best part and plodding along with the same business after it’s established is less exciting. If this sounds like you, you may want to find a private equity firm to take your current business off your hands and continue developing it while you move on to exciting new startups. But before you start looking for a buyer, make sure your business is at the right stage to take this next step. Here are four signs you can look for to help you decide if you and your business are ready to get in touch with a private equity firm and make that deal.

1. You’ve saved up enough documentation to prove that your business is profitable

When you start entering into negotiations for the sale of your business, you need to have all the financial documentation sorted out. If you’ve hired good tax preparers, accountants, and financial planning professionals, your papers should be in good order. Having documentation that’s well-prepared and well-organized and clearly shows that your business has been successful so far can go a long way toward attracting potential buyers who want to invest in low-risk businesses.

2. You have the right professionals working for you

Just because you’ve grown a successful business from scratch doesn’t mean you know all the ins and outs of selling one. Having professional help during this period will help protect you from getting the short end of the stick when you make the deal. Be sure to find a qualified accountant, financial advisor, and attorney before you even start looking for a business broker.

3. Your business is growing but stable

You don’t want to sell your business while it’s still in its infancy and needs you to nurse it along. If it’s still growing but mature enough to remain stable through a change of ownership, now is the perfect time to sell it. Don’t make the mistake of waiting too long, because if sales start to go down, so will the market value of your business. 

4. The market is in a good place

Just like the housing market, the private equity market fluctuates considerably over time. You’ll want to keep an eye on these fluctuations and start the process only when you’re sure the market will allow you the best chance of getting a good price for your startup.

These four signs will help you discern when you’re ready to start looking for a private equity firm to take your burgeoning business off your hands so you can move on to your next great business idea. For more information, contact RLS Associates or a similar organization.