August 17, 2017

How to Increase the Value of Your Business

Tuesday we looked at the danger of trying to drive the value of your business up for the purpose of selling it. Today I’m going to tell you how to increase the value of your business long before you pass the torch on. Have you ever wondered what makes one company more valuable than another despite the fact that they are in the same industry? Well, I’m going to give you several points you can work toward achieving. However, the most vital component is honestly, planning years in advance. So what steps should you take to begin your exit? Here are a few. When I work with business owners, there is nothing that excites me more than to show them how the value of the company directly affects their net worth. According to the Exit Planning Institute, 80 to 90% of a business owner’s net worth is tied up in their business. Many times business owners, especially in the beginning stages, focus only on driving the revenue up. While profits are what one the most important factors when it comes to selling your business, it’s not the only one. Focusing solely on making income may line your pockets while you […]
August 17, 2017
volatility in the markets will come

Volatility in the Markets Will Come

Somone recently asked me, “What is volatility?” I explained it is simply the rapid rise or fall in price. The last little bit, the stock market has been steady and boring, nothing special or crazy. It hasn’t really been in the news lately and because of that, I’d say we as investors are a bit lackadaisical at this point. This isn’t going to happen forever though. While we have smooth sailing right now, that won’t always be the case. Volatility in the markets will come because that’s part of investing. A recent fishing trip reminded me these five lessons when it comes to dealing with a volatile market place. Go fishing!—While we are seeing smooth seas right now, rough choppy waters are ahead but don’t be afraid to invest because of that. If you do you may miss out on some of the best returns you’ll ever see. We don’t know what the market is going to do. It may go down or it may go up. So don’t miss it by going to a safety position. Don’t Jump Out of the Boat—When the waves come, don’t jump out. You’re better off staying in and riding out the rough waters of […]
August 16, 2017
My Personal House

Do Extra Mortgage Payments Really Help?

When it comes to paying your mortgage everyone knows you can save money on the interest by shelling out a little more and applying it to the principal. That means additional principal payments benefit you later on, right? You may also view one dollar today as the same dollar tomorrow. However, that’s not technically true. It depends on how much and why you spend it. If that seems a little confusing, let me break it down a bit more for you.  That way you’ll know how much you really are or are not saving. Paying Extra on the Mortgage Let’s look at an example of what I’m trying to say. Here are some assumptions we’ll make. Joe Average secured a $300k mortgage for a 30-year term at 5%. He decided to pay an extra $30 each month to save himself in the long run. In doing so, Mr. Average shaves just over a year, 14 months actually, off his mortgage, thereby saving $13,458 in interest. Not bad. What if he doubled that $30 to $60? At that point, his home would be paid off just shy of 28 years. This time he’s saved $25,560 in interest. That’s almost double the […]
August 15, 2017
debt free living

The DANGER in Trying to Drive the Value of a Business

As a business owner, personal financial planning is key to getting to the next stage of life, whether that’s retirement or just a change in direction for your own personal gain. This is where you reach the point where you ask yourself, “Is my business worth the amount of money that I need to transition to the next phase?” Here’s the thing, when it comes to entrepreneurs, they’re audacious, a pain in the butt if you will. We see a mountain, and we start climbing. Failure just isn’t an option. We might fall, but eventually, we will reach the peak of that mountain or die trying. Many of my clients have already sold their businesses or transitioned it to their children or a charity, yet, they’re still asking that same question. Why is that? Why is that? Let’s say for example I need $2 million in investable assets which produce income for me to maintain my standard of living. When I examine my modified net worth statement, it shows that I am only at $1.5 million and a majority of this net worth is my businesses value. So, I am about $500k short of my goal. That’s where the business value […]