Every week we discuss a variety of marketing solutions, business development techniques and acquisition of investor capital all in an effort to help small businesses grow.
But all of the time, effort and energy spent on growing your business needs to pay off. For this reason we are devoting this column to providing you with some practical wealth building suggestions that pay off.
1) Invest your savings – Actively resolve to set aside a certain amount of your income toward your long term investments. Make sure this amount is consistently set aside month after month. Take this money out of your earnings first. This concept is called paying yourself first and it’s absolutely crucial to your long term financial wellbeing.
2) Look for vehicles in which to grow your savings – Placing money in a savings account every month may seem to be a good plan. It’s not. While saving up monthly in a savings account beats making a charitable donation to your high end electronics store, car (more accurately car and accessories dealer) and other stuff that eats up savings, you’re still not realizing even most of your potential. Many banks and firms offer variable annuities and guarantee not only the principal, but also at least a minimal return, letting you invest in the stock market without the risks. These annuities often yield over 10% or more annually when invested over a period of long time.
The difference between investing in these or in a savings account. If you invest $100 a month averaging 10%, you’ll accumulate about $188,000 in just 20 years. By contrast, a 2.5% savings account, a higher rate than most offer, will gross you just $50,000 and that’s before taxes, which are differed in the case of an annuity (meaning that you pay them at the end, allowing your investment to accumulate essentially tax free in the meantime). Just make sure that your principal is always guaranteed, as well as a minimal step-up and speak with a reputable financial advisor before engaging in this well worthwhile (when done right) investment.
3) Stop spending and start saving – The difference between buying a new car every few years and keeping an old one, buying cheaper models and letting them last longer and eating at home/packing lunches vs. donating charitably to your favorite for profit restaurant is that by choosing the more responsible options you will add tens of thousands to your savings/investing goals every year. This should enable you to actually retire a millionaire. It won’t even take much work, just careful life choices.
4) Be responsible – Carry insurance in amounts that are needed. Make sure your assets are protected in retirement accounts (another benefit that annuities offer) and stay out of trouble. The straight path pays off.
5) In the end, support your family and worthy projects – Money isn’t an end unto itself. What I’m advising is that business owners stop funding sellers of overpriced merchandise or services on a regular basis, donating their earnings to such noble institutions as casinos, despite the admittedly fine work that poker tables do on behalf of all of humanity and instead start saving for their families, their own retirement, their community and support institutions or projects of real value instead of blowing money away.
Here’s wishing you a happy, fulfilling, knowledgeable and effective personal future.
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