Summer. It’s such a relaxing time of year, even when the care free days of summer break from school don’t apply to you anymore. Business is always a little slower in the summer with people taking vacations and leaving work early, making it the perfect time to do a little clean up of your finances and put in to motion some long-term plans. If you’ve been feeling a little disorganized lately and uncertain in your future, here’s a few tips for straightening out the back side of your business… and your life.
1. Consolidate Your Investment Accounts. This is one of the biggest moves you can make to save yourself money and heartbreak. Having multiple investment accounts put you at a disadvantage in a couple of ways. The first is that having too many accounts can cause you to lose focus of what you’ve invested in. The buzzword in investing is always “diversify.” Diversify your portfolio, diversify your holdings. Everyone tells you to diversify but what does that even mean? Diversifying is not about the number of investments you have; it’s about the types of investments. It’s better to have a variety of types of investments than to just have a variety of investments, and having too many different investments takes you away from focusing on the types of investments you have. As a result, people tend to have less diverse portfolios and thus, less profitable investments.
The second way having too many accounts can hurt you just has to do with a too complicated life. Business owners have a lot going on in their lives, especially if they have lives outside the office. The normal business owner just can’t run a business, keep a real life, and monitor a bunch of investments, meaning that the investments you don’t watch will suffer. It’s not that you have to glue yourself to your computer screen, but consolidating your accounts allows you to keep a closer eye on what’s happening. The benefits of consolidation are only compounded by the ease with which it can be accomplished. It’s as easy as contacting an investment company. They will take over your accounts and consolidate them into a better diversified and a more easily managed bundle. Many people have moved jobs and invested in a variety of stocks over the years, only to find out that they haven’t set themselves up to make a profit in the way they think they have. Save yourself the trouble and consolidate your accounts now to take control of your money.
2. Make Sure You Have Enough Insurance. This tip applies to both your personal and professional life. Insurance can be a lifesaver in situations that right now, you can’t even dream of. Some types of insurance are obviously necessary, such as life insurance and long-term disability. One consideration though with these common types of insurance is to ask yourself if your policy has all the coverage you require. Many workplace life insurance policies don’t end up providing enough for your family in the long run. Of course this depends on a variety of factors including where you live and what your income is now, so try looking at online calculators of life insurance that will take into account your actual life circumstances. Some lesser considered types of insurance are just as necessary. These include key man insurance for the most important executives in your business. Key man insurance will compensate your business for any financial loses that come as a result of something happening to one of the people specified on your insurance policy.
As a successful business owner with employees, having a key man insurance policy may be vital. If you have an office building and assets, your incapacity may drain the company of all of those, providing no money to your employees or even your family. While key man insurance can technically be obtained for anyone in your business, it is probably only necessary for high ranking executives. If you have partners, they probably should be covered here as well, especially if they own part of the business or property on which your business is based.
3. Get All Your Paperwork Done. Finally, you should take the opportunity to make sure that all your necessary papers are signed, notarized if necessary, and put someplace where people will find them in the event you are unable to direct them. Necessary papers include a will, a power of attorney, and a living will or medical directive. While perhaps a morbid thought, these are important papers to have in both your personal and professional life. A will provides your family and even business associates with directions as to how your property should be distributed and maybe even attends to the issue of ownership of your business.
A living will is basically directions to your family regarding what should be done with you medically if you are no longer able to make decisions for yourself. This can be extremely beneficial in saving your family some of the stress of decision making. The power of attorney is the most beneficial to you in your professional life because it allows the holder to sign business and legal documents as your proxy. The power of attorney doesn’t necessarily have to be all about morbidity, in fact it can come in handy if you’re stuck on a trip but an important deal needs to be signed. The key to remember is that the power of attorney allows someone to act as if they are you legally. This means that contracts and papers signed under the power of attorney can be legal and binding so it is important to leave it with someone you trust. Maybe consider a family member who is not involved in your business for this job.
Summer is a great time to take advantage of the lazier days and take stock of your preparedness for the future. Taking control of the future and shaping it to how you want is really the goal and these tips will get you there!
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