Business confidence, business savvy, organization, and accountability are four very important skills that are needed to achieve financial security.
Once those skills are learned, it is quite easy to create financial security for you and your family. It is important to note that financial mistakes can destroy all of your hard work very quickly. Nobody is perfect. I promise you that everyone makes mistakes. Some mistakes might be unavoidable, especially if you are in financial distress. However, the majority of mistakes that are made by business owners are avoidable, once they know what to look for.
When growing your business and your finances it is important that you work with your coach on two fronts: (1) How to improve business skills and (2) How to avoid or minimize mistakes. Please use the following list to determine if you are making mistakes; and if so, please make the necessary corrections as quickly as possible.
1. Not Updating Wills and Beneficiaries
According to Consumer Reports eighty-six percent of their readers hadn’t updated their wills or other estate-planning documents within the previous five years.
2. Not Telling Family about Financial Information
In only 30 percent of households did both spouses know major details about the family finances. I recommend that you create a master sheet with all of your account information, passwords and websites and keep that list with your will. Make sure that you update the list at lease one time per year.
3. Not Maximizing Retirement Contributions
To achieve financial independence it is imperative that you contribute the maximum amount to your retirement funds. It is also imperative to know the expenses of the funds and to minimize your expenses where ever you can. For eg. mutual funds typically charge a much higher expense than Exchange traded funds (ETF’s).
The same Consumer Reports article sites that only 36 percent of homeowners had purchased full replacement cost on their homeowner’s policy. Only 20 percent had an umbrella policy. It is also important to make sure that you have under-insurance or uninsured motorist insurance if you are in a state that offers that coverage. Please check with your insurance agent to determine what is best for your individual situation.
5. Not Having an Emergency Fund
Emergencies can come at any time. To best protect yourself, you should have a minimum of one year’s personal and business expenses in an account. Think of the security that an extra $30,000 or greater would give you. Start slow, just put $20 per week away, it adds up over time. Of course, if you can afford more, then go ahead and put more away.
6. Mismanaging Debt
Debt is the killer of dreams. Incurring credit card debt has been widespread in this economy. If you are in credit card debt, it is imperative to put your cards away and don’t charge anything else on them until the debt is erased. If you can’t afford something then do without it instead of charging it. Try and apply for a 0-balance transfer card and move your debt to that card. Doing this, will allow you to put every dollar repaid towards principal instead of interest.
7. Not Knowing How to Run an Effective, Profitable Business
If you are in business then it is important to know how to run and manage that business.
As discussed earlier, everyone makes mistakes. The important thing is not to beat yourself up if you have made mistakes, but rather learn from the mistake and correct it as soon as possible. You can learn to run an effective business and you can learn how to avoid or correct financial mistakes.
Your financial future is in your hands. The government will not be there to take care of you in retirement. If this article scares you, then I hope it scares you straight; straight into the land of knowledge. If you follow these tenets you will have a long profitable career; use debt wisely, live below your means, establish retirement accounts and fund them to the max, and obtain professional guidance.
Our CEO’s are learning how to become millionaires and achieve financial independence every day. Isn’t it time that you enjoyed that too? If you still feel that you are struggling, you will be thrilled to know that Dr. Paul S. Inselman, CEO of Creativecoachingllc.net has formulated a specific step by step process that will help you to become a more powerful business leader and create a higher net worth. Our client’s income has grown on average 150% since 2008. In 2016 alone they were up on average a whopping 44%! In twelve years, I haven’t seen one CEO that executed the steps above and that utilized our procedures that failed become more financially secure.