Small Business Owners are among the most optimistic
people on the planet – I think you have to be to do what you do. But according
to recent research, you aren’t feeling particularly great right now. In March,
the National Federation of Small Business Index of Small Business Optimism
turned downward. That’s not good for the overall US economy (you and others like
you are responsible for half of private GDP and half of private sector hiring),
but it’s not particularly good for your own business or your own life. Because
in my experience when you’re not feeling optimistic, you’re not doing enough to
take control of your own financial lives – and your own financial futures.
Having some Money Rules can help. Rules not only save us from societal chaos; they make our lives easier. Rules provide us with a filter. A means of looking at most of the money decisions we’re asked to make and enabling us to simply say: Yes. Or, just as importantly, no. Here are the ones I like best, and can help you make financial decisions for your business and for yourself:
Money Rule: Personal Finance Is More Personal Than Finance
When it comes to your money, you have to make the decisions that are right you, for your family and for your business. It may mean deciding, with your spouse, that one of you will hold onto a corporate job without a lot of potential for advancement because it’s the cheapest way to hold onto benefits. Whatever personal choices you make, make them thoughtfully and with a plan to get you from here to there. That’s key, because along the way, I guarantee there will be stops and starts. There will be emergencies and surprises. And there will be people (sometimes people who care about you) who think you’re doing it all wrong.
Money Rule: Financial plans don’t fail people. People fail to plan.
According to the American College, more than 1/3 of you have never even tried to estimate how much money you’re going to need when you retire. And even among those who have run the numbers, the vast majority – about 75% have no written plan for retirement. In other words, even when you know what you need, you don’t exactly know how you’re going to get there. Even if in your mind your business is your retirement safety net, you still need an actual retirement plan. As small business owners, there are many you can choose from, including SIMPLE IRAs, SEP IRAs, and Individual 401(k)s. If you’re not sure which is right for you, talk to a financial adviser.
Money Rule: Hope is not an investment strategy.
The American College stats also revealed that that’s what too many small business owners seem to be doing -- just hoping. Instead of crossing your fingers and hoping for the best, you need to plan. And the first step in the process is to ask yourself some important questions. Chief among those questions is this one: How long are you going to work? About 80 percent of Americans now tell us they are going to work – for pay – in retirement. Among this number are many small business owners. The average retirement age for small business owners is 73, about 5 years later than that for employees. Many of you may not believe you’ll retire at all. You need savings nonetheless, because your the industry might change around you – or your health might go.
By Jean Chatzky
Having some Money Rules can help. Rules not only save us from societal chaos; they make our lives easier. Rules provide us with a filter. A means of looking at most of the money decisions we’re asked to make and enabling us to simply say: Yes. Or, just as importantly, no. Here are the ones I like best, and can help you make financial decisions for your business and for yourself:
Money Rule: Personal Finance Is More Personal Than Finance
When it comes to your money, you have to make the decisions that are right you, for your family and for your business. It may mean deciding, with your spouse, that one of you will hold onto a corporate job without a lot of potential for advancement because it’s the cheapest way to hold onto benefits. Whatever personal choices you make, make them thoughtfully and with a plan to get you from here to there. That’s key, because along the way, I guarantee there will be stops and starts. There will be emergencies and surprises. And there will be people (sometimes people who care about you) who think you’re doing it all wrong.
Money Rule: Financial plans don’t fail people. People fail to plan.
According to the American College, more than 1/3 of you have never even tried to estimate how much money you’re going to need when you retire. And even among those who have run the numbers, the vast majority – about 75% have no written plan for retirement. In other words, even when you know what you need, you don’t exactly know how you’re going to get there. Even if in your mind your business is your retirement safety net, you still need an actual retirement plan. As small business owners, there are many you can choose from, including SIMPLE IRAs, SEP IRAs, and Individual 401(k)s. If you’re not sure which is right for you, talk to a financial adviser.
Money Rule: Hope is not an investment strategy.
The American College stats also revealed that that’s what too many small business owners seem to be doing -- just hoping. Instead of crossing your fingers and hoping for the best, you need to plan. And the first step in the process is to ask yourself some important questions. Chief among those questions is this one: How long are you going to work? About 80 percent of Americans now tell us they are going to work – for pay – in retirement. Among this number are many small business owners. The average retirement age for small business owners is 73, about 5 years later than that for employees. Many of you may not believe you’ll retire at all. You need savings nonetheless, because your the industry might change around you – or your health might go.
By Jean Chatzky
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