Expert Tips on How to Create an Investment Strategy That Works With Your Goals

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StrategyDriven Managing Your Finances Article |investment strategy|Expert Tips on How to Create an Investment Strategy That Works With Your GoalsDid you know that the collective worth of the 15 wealthiest investors in the world surpasses $300 billion?

An investment strategy can change your life for the better. Whether you are young or nearing retirement age, you can find an investment opportunity.

One thing about investments is that there are no limits to what you can choose. Also, there are no time limits, and so you can make the right choices at any age.

This guide will take you through the process of establishing an investment plan that works. Read it to make the right financial decisions.

Assess Your Current Financial Status

Your budget should clearly show your total income vs. the total expenditure. If the amount of money you remain with after the expenses isn’t enough, you must cut down some costs or look for more ways to generate income.

If you want a liquid investment, stocks would be the best. For illiquid investments, you can consider real estate investing.

Set Goals

Why do you want to invest? What do you want to achieve?

When you set goals, it becomes easier to attain your target. Maybe you want to buy a car with the investments, or you wish to secure your future.

If you have many goals, write them down and narrow your list according to their importance.

The goals should be measurable. For instance, if your goal is to save $50 every week, then you should evaluate your finances with time to know if you have achieved what you wanted.

The goals should also be realistic and achievable. You can’t plan to save more than $10,000 in a month when you know very well that you can’t achieve that.

Explore Options

The investment you choose should depend on your goals and your personal preferences.

If education is your saving goal, you may consider the mutual funds, stocks, bonds, and other long-term securities. You may also decide to invest in the real estate market or other physical products that increase value with time.

The key here is to diversify. As a beginner, you only need to dip your toes as you test the market. That’s why you should diversify the assets no matter how little they are.

This is the essential step for planning; thus, you might need to involve a financial planner. The planner should listen to your ideas and advise you on the best high rate investments to consider.

Check the Charges

Every investment includes some charges. If you decide to invest in stocks, you will need to hire a broker who will require a service commission.

If you choose investment funds, you will have to pay the fund manager too. The same case applies to real estate where you must pay a real estate agent.

Don’t commit yourself to any investment plan without knowing the charges. Ask the firm to explain to you all the possible costs that you will incur for the investment.

In most cases, the higher charge translates to better quality. But still, you should compare the price of getting a similar service somewhere else. You may be lucky to get the same quality service at a reduced price.

Do Your Research

Don’t invest blindly. As an informed investor, you should research the most profitable types of investments. You should always consult an educated professional, like Daniel Gordon, before making any big decisions in the financial market.

If you choose to invest in the financial market, you need to research on the best markets.

Currently, many firms are offering the same service. Some are legit, while others are not. Unless you are careful and do in-depth background research, you can quickly lose your fortunes to scammers.

If possible, check the reviews of the firm you choose to know what other people think about the firm. Don’t put your investment in a firm with too many negative reviews.

Understand the Risks

Every investment is risky. Young investors are more likely to fail because they are still green. Before you invest, you should familiarize yourself with the risk associated with your investment strategy.

If you plan to invest in the stock market, then you should know the possible risks of that industry. It’s possible to lose all money or even get abnormal profits.

With knowledge of risks involved, you can easily come up with a proper risk management strategy. For instance, you can diversify the assets to stay safe just in case one of the investments fails.

Be cautious with the investments which promise high yields only. There is no investment that does not have a risk. Unless it’s a scam, there will always be the drawbacks that you should understand.

Monitor the Investment

Don’t invest and leave your money there. You should monitor the progress of your investments.
Is everything going as expected? Are you depositing excess money into the investments? The progress of the investments should help you make the next step.

At times, it’s better to withdraw your investments if the plan is not profitable. After all, it would be useless to keep on investing without seeing the results of your hard-earned cash.

Choose the Best Investment Strategy

The right investment strategy should be cost-efficient and profitable. The ideal approach should also be simple and easy to manage.

So, don’t stress yourself finding the most complicated investments that promise the highest returns. Start small, and move to the more profitable ventures once you learn the basics.

StrategyDriven helps entrepreneurs make the right decisions for their businesses. Our help comes in the form of well-researched articles written by business experts. If you just started your business, or wish to create one, read our blogs to know more about the most important business aspects.

What Exactly Are Short Term Loans?

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StrategyDriven Managing Your Finances Article |Short Term Loans|What Exactly Are Short Term Loans?When looking to aid yourself out of financial difficulty, there are several elements to consider before applying. Not only do you need to ensure that you are eligible, but you need to ensure that the lender you are using is a reliable one. To help you understand what short term loans are and how you can apply, we have provided you with a little bit of insight.

What Is A Short-Term Loan?

A short-term loan is a loan that enables you to borrow the amount of money that you need over a short time period. There are several different lenders out there that allow you to borrow the amount of money that you need should you find yourself in a financial emergency. Whether it is for a boiler repair or for an emergency car replacement, this form of finance can work for you.

How To Find The Right Lender?

When you have established that the loan type is right for you, it is then time to find the right lender. By getting a quote from several different lenders, you can find one that will provide you with the borrowing amount that you need. By spending the time looking for a loan provider that works for you, you are then able to ensure that you are paying back your monthly repayments on time with a loan term that works for you. Whether this is over the course of either 3 months or 6 months, this can benefit you in the long term.

How Do You Apply?

Applying for short term loans could not be any easier. With a number of lenders providing you with a simple to use application platform, you can simply answer the questions online and get an answer the exact same day. The lenders for this style of the loan will look into your monthly income as well as your line of credit to generate an initial offer for the amount that you are looking to borrow. By making sure you are eligible before you apply, you can ensure that you will have the money that you need in your account within 24 hours.

How Can This Loan Type Affect Your Credit Score?

As with any form of alternative finance, there is an element of risk that comes with it. When using a loan type, it is important to ensure that you are meeting your monthly repayment date. This will limit the negative impact on your credit score and ensure that you are using your monthly repayment. Buy making sure that you are meeting your repayment, you will limit the chance of defaulting payments as this can lead to debt if not careful. By ensuring that your payments are on time, you can then strengthen your finances and show that you are good with money.

Whether you are looking to apply for a loan right this second or you are looking for your options in the future. There are several loans that you can benefit from in this time.

What Is A Net Working Capital And Why Is It Important?

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StrategyDriven Managing Your Finances Article |Net Working Capital|What Is A Net Working Capital And Why Is It Important?Many, if not most, businesses need money to develop, survive, and grow. Organizations need the right amount of cash to meet both short-term and long-term needs without high risks of ruining their businesses. Thus, a stable and sufficient net working capital should exist within these companies’ financial accounts.

Net Working Capital: A Brief Overview

Perhaps the simplest definition of net working capital is money that a business has in its bank account. It’s also the measurement of the liquidity, efficiency of operations, and overall financial health of a business entity. Therefore, if a business possesses a working capital of good standing, it can grow through various investments.

Note that it’s possible to grow the net working capital through various means. Organizations can produce additional sales, build long-term relationships with clients, and develop products and services. It’s also possible to acquire additional working capital by borrowing the cash from reliable lending corporations.

Having a lender loan the cash you need to start and maintain projects might help your company grow. You can use the acquired money to purchase equipment to streamline processes or hire additional workers to finish tasks quickly.

Calculating Net Working Capital

Always keep in mind that money is a finite resource. Hence, it would be best to learn how to calculate working capital to let you know the amount of money needed to develop, sustain, or grow business operations.

Don’t worry, as it’s not severely challenging to calculate your company’s working capital. It’s as straightforward as subtracting your business’ current liabilities from its current assets.
Your firm’s current assets may include (but not limited to) the following:

  • Current inventory
  • Cash and cash equivalent
  • Accounts receivables
  • Prepaid expenses
  • Marketable investments and securities
  • Other liquid assets

As for your current liabilities, these may include the following:

  • Accounts payables
  • Taxes
  • Accumulated expenses
  • Interest payables
  • Short-term loans

For example, a small business wants to calculate its net working capital and compiles all the data required to acquire this figure. After gathering all the necessary receipts, documents, and files, the company might find its current assets at USD$100,000. They then need to collect and calculate payables, such as taxes, loans, and other expenses. Now, it finds that the business has USD$45,000 in current liabilities. Using the formula of subtracting current liabilities from current assets, the net working capital is USD$55,000. Hence, the company could use this amount to cover operational costs and meet other short-term obligations.

It’s highly recommended for entrepreneurs to know how to calculate their company’s net working capital. The ability to be aware of your business’ income sources helps you check whether you have a steady income source to thrive and survive.

Importance Of Net Working Capital

Without a sufficient amount in one’s net working capital could lead to mild or serious issues. Avoid these concerns by looking at the various reasons why a working capital is essential in developing and maintaining a business.

  • Maintain Smooth Operations

Maintaining smooth business operations is crucial to the profitability of relatively any company. A successful business thrives on providing products or services that people want to purchase.

Providing your business with a stable and sufficient working capital helps the organization maintain smooth operations. Otherwise, you might encounter certain problems, such as the lack of funds to provide workers’ salaries.
If this scenario happens, it could lead to more serious risks. Your employees might go on strike and may not return to their working stations until you provide them with their just financial compensations.

Another problem you might run into is the lack of stable finances to continue producing goods for customers. If your sales representative tells your customers that you don’t have enough stocks for a particular item, you’re going to lose valuable sales. Furthermore, customers might opt to purchase from your competitors instead, and this scenario accounts for lost short-term and long-term sales opportunities.

  • Improve Company Earnings And Profitability

Many small businesses don’t have the financial resources available to sustain their operations and make them grow, unlike large corporations. Therefore, it might be tough to create a profit without knowing and possessing financial stability in the business’s net working capital.
If so, begin by asking yourself how you plan to handle your working capital. Using the formula mentioned above would calculate your company’s net working capital to know the budget for your short-term and long-term projects. In turn, you can figure out the company’s earning potentials and maintain profitability to access eventual growth opportunities.

  • Minimize Costs While Maximizing Returns

Knowing your company’s net working capital also helps you minimize costs while maximizing revenue potentials. It’s because knowing the figure in that aspect enables you to balance various benefits versus the costs.

For example, you might find that your organization is holding high inventory levels. Note that several benefits may come from having plenty of stock to offer to clients. That idea might not always be the most efficient solution, especially for startups and small businesses.
Excess inventory will take up valuable storage space. Hence, your company may not have enough room for other products, unless you’re willing to spend extra cash for additional storage. Furthermore, you need to add the costs of financing and insuring the inventory in case of losses. In turn, the excess stocks may lead to more costs for your organization if you can’t dispose of them soon.

It’s possible to figure out the right number of products needed for your business’ storage while satiating the needs of your loyal customers without spending too much of the company’s financial assets. You could achieve the answer to this particular concern by calculating your business’s net working capital.

  • Helps Identify And Solve Efficiency Issues

When your company has problems with the flow of funds, it might be because you may have too little money for your accounts receivables. But you might not know about this issue if you don’t know how to calculate for your firm’s net working capital.

In turn, you can identify and solve efficiency issues in your business. Identifying your organization’s working capital allows you to look at where your money is coming from and where it’s going. Thus, you can formulate plans to solve productivity issues to increase the business’ cash flow.

Conclusion

A company’s net working capital helps meet its short-term goals, which might lead to long-term solutions. Calculating the working capital and understanding its importance allows entrepreneurs to develop actionable strategies and implement projects based on their spending power.

Ensuring Money Doesn’t Become A Problem For Your Business

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StrategyDriven Managing Your Finances Article |Money|Ensuring Money Doesn't Become A Problem For Your BusinessYour business is precious, and you need to protect it in any way that you can. Now, this is far easier said than done when there are so many elements that need to be considered. In this article, we are going to be focusing on one in particular, and that is money. You’ve got to be able to ensure that money isn’t going to become a problem for your business, and in this article, we’re going to be showing you how. Keep reading if you’d like to find out more.

Hire An Accountant

First, we suggest that you hire an accountant. If you have a professional on your team, things are far less likely to go wrong. Managing the finances of a business is tough even when it is something that you have been trained to do. If you haven’t had any training in finance, then it is going to be even tougher and more mistakes are likely to be made. We don’t want you to make this mistake, which is why an accountant is going to be a good idea. Not only will you have peace of mind that everything is being handled with care, they may also be able to provide you with some advice on how you can make your business more cost-effective.

The more money your business has, the better off you are going to be. If something is going wrong, an accountant will be able to pick up on it sooner rather than later. This gives you time to fix it before it becomes a problem for you.

However, if you want to get the most out of the services of an accountant, you need to find one with valuable years of experience and reputation. Hence, when looking for an accountant, it’s best to check their qualifications, ask about their availability, the method of accounting they’ll use, and the fees they’ll charge for their services. By doing this, you’ll figure out whether your prospect is the right fit for your business needs. 

Work With A Money Mentor 

While your accountant handles the financial aspect of your business, you may also need to work with a money mentor to make sure money won’t be a problem for your business. Sometimes, as a business owner, it’s easy to think that you can’t make enough money due to some external reasons, such as economic downfall or customers being broke. But, if you also believe that you can’t do anything about these factors, which make the earning process more difficult, it could be a money block that hinders you from making money for your business. 

That’s why, as mentioned, it may be best to consult with a money mentor to help you with the problem. They can also advise you as to how to stop struggling with your money blocks and what you should do to ensure they’ll no longer become a problem for your business. 

If You’ve Got Debt..

While debt isn’t the worst thing in the world, it isn’t the best either and you want to avoid this as much as you can. However, if it’s the case that you already have debt, there isn’t much that you can do. If you have ever skipped out on debt and have used a new name to create your company and a creditor uses batch skip tracing to find you, it could be a problem for your business. The best thing that you can do is pay off any debt that you or your business has as quickly as possible.

Thankfully, there are ways that can help you pay off your business debts. For example, if you’re struggling with funds, you may consider reducing some business overheads to free up some funds for your debts. You may also improve your company’s cash flow by ensuring the customers will pay on time and negotiating credit with your suppliers. 

Once you have enough funds, you can pay off any debt as soon as possible. Remember, the sooner you are out of debt, the safer your business is going to be financially.

Find An Investor

Finally, if you know that money is tight, then you might want to consider looking for an investor. These people give your business money in exchange for a percentage of ownership. Now, you might not want to give up a percentage of your company, but it might be the only choice that you have. Negotiate with your investor and see what you can come up with between you.

We hope that you have found this article helpful, and now see some of the ways that you can ensure money doesn’t become a problem for your business. Good luck, and we hope that this has given you the answers that you were looking for.

Maximize Tax Savings Using This One Simple Trick

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StrategyDriven Managing Your Finances Management Article | Tax Savings| Maximize Tax Savings Using This One Simple TrickThe San Francisco-based tax law firm of Moskowitz LLP explains how to save big using the new aggregation rules of Section 199A

The Tax Cuts and Jobs Act (TCJA) instituted last year could mean substantial tax savings for many American businesses. This year, savvy entrepreneurs, business owners and certain investors in real estate can maximize deductions and save big on taxes by putting one of the best features of the new tax law to work the “aggregation rules.”

These updated rules allow taxpayers to combine their trades or businesses, rather than calculating deductions separately for each entity. By treating them as a single unit, owners can maximize deductions of up to 20% and reap potentially huge tax savings – but not all businesses or trades qualify and careful considereation must be made to determine if this will decrease or increase taxes in each particular case.

Moskowitz LLP offers three crucial questions to help determine eligibility:

  1. Do the entities share ownership? In order to qualify for aggregation, the same person or group of persons must own 50% or more of each trade or business, or (in the case of a partnership), must own 50% or more of the capital or profits.
  2. Does ownership change from year to year? Aggregation applies only to those entities where the ownership remains the same for the majority of the taxable year – including the last day of the taxable year.
  3. Are the entities interdependent? Taxpayers can aggregate businesses or trades which abide by at least one of the following:
    • They provide products, property, or services that are the same or customarily offered together;
    • They share facilities or significant centralized business elements (like personnel, accounting, legal and/ or information technology resources);
    • They operate in coordination with, or reliance upon, one or more of the businesses in the aggregated group (like supply chain interdependencies).

If the answer is “yes” to any of the above questions, the businesses or trades may be eligible for aggregation. Seeking help from a qualified tax attorney is an essential next step, as aggregation may not be the best solution for every unique situation, and many investments don’t qualify for benefits under these new rules. Qualifying taxpayers must also follow certain guidelines annually in order to qualify for (and maintain) aggregate status, and a seasoned tax attorney can help clarify these.

About the Author

Tax attorney, Steve Moskowitz, founded what would become Moskowitz LLP over 30 years ago, offering clients a full variety of services that include domestic, international, and criminal tax law representation, tax planning, and tax preparation of current and delinquent filings. Having practiced as a CPA for a “Big 8” (now “Big 4”) firm, as well as teaching tax, law and accounting in law school, graduate school and university, Steve has served as a legal analyst for top media outlets, where he appears daily on the radio. Steve knows his profession inside and out, and his message is simple: Don’t go it alone against the IRS. Passionate about helping clients navigate the complex intricacies of tax law, Steve practices as the founding partner of Moskowitz LLP in San Francisco, overseeing a growing team of accomplished tax attorneys and accountants. Visit www.MoskowitzLLP.com or call 415-394-7200 for more information about legal services, valuable tax resources, and to request a consultation.