financial

I Was Scammed

Even the smart professional gets scammed every now and then. I’m supposed to be impervious to anything related to parting with money foolishly. How humbling . . .

Fortunately, I didn’t fall for a huge scam, but I fell for it nonetheless. How did this happen? The scam penetrated my ultimate weakness; not thinking clearly when sleep deprived. Here’s the story:

I woke up in the middle of the night and couldn’t go back to sleep right away. By the way, I heard that if this happens it’s best to just get out of bed for a little while instead of lying there sleepless or using your phone. Eventually, I picked up my phone, and started to watch YouTube videos. In the middle of a video appeared an infomercial about a special fan that cools air quickly with the use of water and some sort of advanced technology. It was probably a warm night because I purchased the fan thinking that it may come in handy, especially if making pizza in a hot oven during the summer. If the fan can cool down a factory that melts steel, then it can certainly cool down my kitchen.

Fast forward a few weeks, and fortunately only $90 later after shipping and handling, arrived this magical air cooling fan. I read the directions, added some water, plugged it in, and laughed at myself for being so stupid. The fan was so weak that you couldn’t even feel it unless you were within a foot or two away from the breeze. Nothing was really cooled except for my pride.

Fortunately, it wasn’t a lot of money, but I did learn two lessons. First, anyone can get scammed under the right circumstances, and two, don’t watch YouTube videos at night, especially when you’re tired.

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Are You Striving Too Hard or Too Little?

There is nothing wrong with striving to have financial success but be careful of taking it too far. The opposite can also be true, whereas you don’t strive enough, which can create another set of problems. Here are some signs of each:

Signs You are Striving too Hard

  1. You work an excessive amount of hours to get ahead at the peril of your own health and relationships
  2. No matter what you accomplish it never seems to be enough
  3. Most of your conversations involve making more money. However, this doesn’t apply to financial professionals.
  4. Your drive is not enjoyable anymore

Signs You are Striving too Little

  1. You are always behind financially due to a lack of effort
  2. When business is down, aside from a worldwide pandemic, you do nothing to turn it around
  3. Your efforts are not producing any real financial success
  4. You take little to no corrective actions to get ahead

The Right Balance

The right balance may be as simple as striving for success, while putting financial success in its proper place. It’s different for everyone and if you are honest with yourself you will know when you are striving in an unhealthy way or not striving enough.

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COVID-19 Tax and Financial Updates 04-10-2020

Here are the latest updates and some reminders:

Tax Updates

  • Tax deadlines: both New Jersey and New York have finally extended the tax deadline from April 15th to July 15th.
  • If you have an existing installment agreement with the IRS, payments due between April 1 and July 15, 2020 are suspended.
  • CARES Act economic impact payments: payments will begin this month and you do not have to take any action if you filed a return for 2018 or 2019.

Paycheck Protection Program Info

  • Sole proprietors, independent contractors, and self-employed persons can start applying for this loan starting today
  • The banks are completely overwhelmed with loan applications and some have temporarily stopped taking new applications, especially if your business does not have an existing relationship with the bank
  • The information required consists mainly of prior year’s payroll filings, loan applications, etc.
  • The program will be available until June 30, 2020
  • We are not sure how long it will take to receive funding, but if you have received funding, then please let us know

Existing SBA Loans

  • The SBA will automatically pay the principal, interest, and fees of current 7(a), 504, and microloans for a period of six months.
  • The SBA will also automatically pay the principal, interest, and fees of new 7(a), 504, and microloans issued prior to September 27, 2020.

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I Took the Day Off and You Should Too

Technology is absolutely wonderful at times. This is one of those times because I took the day off today, but still didn’t miss my goal of writing one post per week. Everyone needs a day off, a week off, or even a month off and here are 5 reasons why:

Rest and Recuperate

After working intensely or longer than normal hours everyone needs to take a break. The day after tax season is always a day off for myself and my staff, and I like to take at least a few additional days off after that. It’s hard to take a family vacation at this time with the kids being in school, but I get to see them more though.

Spend Time with Family

It’s good to be able to spend some additional time with your family and not being at work all day. You don’t have to fight the commute, come home tired, or still have stress resting on your shoulders when you come home. Most likely you are just a little more relaxed.

Complete a Small Project

Maybe there is a project that needs to be tackled that you haven’t been able to get to. For me, the list seems endless, but it feels good once a project is finished. Be careful if the project is too large, otherwise it will take away from resting and recuperating.

Reflect and Think

When I am able to relax, it makes it easier to reflect on different aspects of my life and the direction of how things are going. Also, ideas seem to flow more smoothly when not under pressure.

Be Thankful and Grateful

Be thankful that you get to have a day off and grateful for all that you have. A little gratitude can help to put things into perspective.

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Why is Sales Such a Bad Word?

Everyone is trying to sell something, whether we realize it or not. Even employees are trying to sell themselves to get a job and keep moving up the ladder. Although selling has a bad reputation, it is more about intent, which makes it either good or bad.

The Bad Side of Sales

Selling a service or product that is unnecessary, unhelpful, damaging, or just not needed are the worst forms of selling. The “not needed “ product can be very subjective though, because no one really needs a Dodge Challenger Hellcat, but on the other hand, maybe it is exactly what is needed! On a serious note, a common example of selling something that is unnecessary can be a professional telling you that you need to replace your entire heating system, when it can easily be fully repaired for a fraction of the cost. Another example can be a warranty that is completely useless. The list goes on and every business that sells or provides a service should try to avoid selling in this manner.

The Good Side of Sales

If you are selling something that is in the best interest of your client, customer, or patient, then you are selling correctly. Put their interests before your wallet and you have nothing to worry about. This is the simplest test to alleviate your fears of being a sales person.

Don’t Over Think It

Don’t think about it too much. Everyone is selling something to some degree, whether we recognize it or not.

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Should Married Couples Keep Their Money in Separate Accounts?

It’s not uncommon for married couples to keep their money in separate accounts, specifically checking accounts. With retirement accounts, each spouse must have their money in a separate account, including IRA’s and 401k’s, but is it ideal for a married couple to have separate checking accounts vs. a joint account, and why is this important?

Exceptions

There are some situations where funds must be kept separate, such as the case of a spouse with some sort of addiction (spending, gambling, substance) or mental issue, but this must be done to protect the family. I’m not referring to this situation.

Business Analogy

Can you imagine starting a business with a partner and then telling them that there needs to be separate accounts for the business that they bring in vs. the business that you bring in? In some cases, you may be able to know this information, but it can start to get grey very quickly. If everything was separate, then how are you partners? Who pays which bills and when? Should each partner know what the other is doing financially? I have never heard of a business that has done this and if they have, then I would like to know how it worked out. On a practical level, it is no longer a partnership. If a husband and wife have separate accounts then how can they behave like partners, financially speaking?

Unity

Having a joint checking account forces both spouses to work together and communicate about finances. Finances permeate through all aspects of a family from simple matters to more complex matters. A joint checking account keeps both spouses on the same page, and helps to keep them accountable to each other. It also helps to minimize selfishness and sets a focus on the family. With separate accounts, you can easily spend money on your own needs instead of putting the needs of your spouse and family first.

Asset protection

Do you want to know how to protect your assets in a marriage? Protect the health of the marriage so you do not have to worry about divorce. Practically speaking, what are you really protecting if you have separate checking accounts? The point of a checking account is not to save money, but it is used to pay for the operating expenses of the family.

Interdependence vs. Independence

It’s great to be independent, but interdependence is a more mature, evolved, and higher level of thinking. Independence states that “I” am important while interdependence shows that “we” are important. Which would you rather be?

Give it a Test Drive

If you are currently keeping your checking accounts separate, then why not give a joint checking account a chance? Try it out for 3 – 6 months and see if it changes the nature of your relationship. If they get better then let me know, but if things get worse, then don’t tell your spouse that you got the idea from this article.

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10 Small Improvements That Have a Big Profit Impact

Improvements do not have to take an enormous effort to make a huge impact on your profits. Sometimes it’s the small things that add up over time. Here are 10 simple improvements that can have a significant impact on your profits:

  1. Schedule work better: Are you wasting time by scheduling work poorly? For example, do you allow enough time for you or your employees to complete a project within the scheduled time? If not, then there will be too much stopping and starting which kills efficiency. Another scheduling challenge is to make sure that you do not have too little or too many staff members scheduled at the same time.
  2. Set aside time for high value activities: High value activities are not usually urgent, which makes them get pushed to the side. In order to get these items done, you need to schedule this type of activity, even if just an hour or two a week.
  3. Look at your financials: Do you look at your financials or tax return just once a year or possibly not at all? For starters, you should review your financials at least once per month to see how you are doing versus the same time last year. Your financial statements are the measurement of your business’ results, and you need to know how you are doing to make better decisions.
  4. Consistency of pay: When possible, try to keep your pay and distributions consistent, unless paying yourself a bonus or bonus distributions. This makes it easier to manage your cashflow and reduces the temptation to take too much just because you had a good month.
  5. Work less: Working crazy hours will burn you out over time and is not sustainable. Try to consistently reduce your hours over time to give yourself a breather. If you become depressed or develop a health problem, then you will not be able to work at all.
  6. Acknowledge people: Show sincere appreciate, gratitude, and respect for your employees, customers, vendors, and especially your family for bearing with you during good times and bad.
  7. List your activities for a week: Over the next week, jot down everything that you do and how long each task takes. Then, ask yourself, “Should I be doing this, should someone else be doing this, and does this even need to be done?”
  8. Pay extra towards your debts: Even a small amount will add up to quickly pay off your debts. You will save interest and eventually increase your cash flow. You’ll also think twice before incurring more debts.
  9. Contact an old customer: Is there an old customer or client that you liked to work with and have not heard from in a while? Maybe there was a misunderstanding that you can easily resolve or maybe no reason at all and they just need to be asked to come back.
  10. Use a pricing worksheet: Instead of just winging it with your pricing, why not develop a pricing chart? It will take the guess work and emotions out of pricing, which ends up causing you to undercharge.

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The 3 Pillars

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A business has many moving parts that must all be coordinated to ensure smooth and profitable operations. Usually, there are aspects of a business that are either completely ignored or not given the time, energy and focus that they need. These moving parts can be broken down into 3 major areas: operations, marketing, and financial.

Operations: Most businesses focus all of their time and energy on the operations of their business, and with good reason. Without operations there would be no business. Aspects of operations that are usually overlooked are: developing and managing employees, delegation, scheduling, and technology. It’s easy to get lost in all of the details of delivering your product and service that improvements to your business get pushed aside for the sake of just getting through the day.

Marketing: Marketing is the promotion of your business and is the key to growth opportunities. This can include old-fashioned networking, social media and Internet marketing, and many other forms of getting the word out. There are even indirect ways of marketing your product or service based upon visual interactions and use of technology.

Financial: Financial matters are like a middle child that tends to get ignored. Anecdotally, I have yet to see a business that does not have either cash flow problems or tax issues if they ignore their finances. Practically speaking this is the least interesting aspect of running a business, which is probably why it is ignored. However, operations, marketing and financial are all thoroughly intertwined, and if you ignore the financial aspect of your business then it will negatively impact all of the others.

These three pillars create the foundation of a business, and by strengthening them you will create lasting success.

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The Secret Formula for Financial Happiness

Is there really a secret formula for financial happiness? If so, it would look like this:

Income = $100

Spending = $90

Result = Financial happiness

Alternatively:

Income = $100

Spending = $110

Result = Not too happy financially (at least not for long)

Simple, but true.

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An Observation Regarding Money Worries

There are a few things that I noticed over the years that seem to contradict each other regarding money worries. There seems to be a link between being charitable, concerns over saving too much, and stress about money.

Charitable giving: some people make a lot of money and give little to nothing to charity, especially as a percentage of their income, and the opposite is sometimes true regarding those with modest incomes. Theoretically, the greater your income then the greater should be your charitable giving. Why does this make sense? I believe that it has to do with a scarcity mentality and a fear of letting go. If you are overly concerned with not having enough money, whether real or imagined, then why would you part with your money?

Overly concerned about saving: Let’s face it, it is daunting to think that we have to make sure to save enough for retirement, college, a house or a larger house, 6 months of expenses for an emergency fund, weddings, sweet 16 parties (they can be over the top nowadays), vehicles, business ventures, and everything else. It even makes me exhausted just writing that! However, some take it too far and save so much or are concerned so much about saving that they get really stressed out. Although I am an advocate for saving up for most of the above (I’m not a big fan of massive weddings and outlandish sweet 16 parties), you have to balance that with current needs or you will be miserable. Who wants to eat the cheap steak to save an extra $10 for their retirement?

Do any of these apply to you? Maybe just a little?

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