August 28, 2017

How a Business Owner can Growth Net Worth fast! Compound Interest: The Power Behind It

One of my all-time favorite quotes is the one about compound interest that’s attributed to Albert Einstien. “Compound interest is the eighth wonder of the world. He who understands it earns it. He who doesn’t pays it.” You will probably see that quote a million more times on my blog because it is one of the truest concepts ever! Sadly too many fail to understand and grasp it. Here’s an example to help you recognize the importance of compound interest if you don’t. The Choice If I offered you $5000.00 of cold hard cash or a magic penny that doubles every day for 31 days, which would you choose? Most people will choose the $5,000 because we simply want that instant gratification. Here’s the thing a penny doubled every day for 31 days is just over $10 MILLION! HOLY COW BATMAN!!  That’s a lot of money.  On day 10 your penny is only worth a measly $5.12. I get it! That doesn’t seem like much when you could have taken the $5000 and ran just nine days earlier. However, if you hold out until day 20 on the penny, then you have just over $5241.00. You would finally come out better […]
August 24, 2017
When Should I Start Contributing to Retirement?

When Should I Start Contributing to Retirement?

As a business owner, I know how easy it can be to get caught up in the hustle and bustle of running a company. You can get so busy that you even forget about saving for your retirement. That’s never a good idea though. Recently someone contacted me on Twitter asking this, “Justin, I’m a new business owner, and I have some extra funds? Should I start contributing to my retirement now?” That’s great that this new business owner is already starting to think about retirement! However, there is a process. Check out this video to see my answer. There are three main points you need to consider as a business owner before you ever start contributing to a retirement account. 1. Have a business emergency fund. That means you have at least one month’s worth of company expenses set back. If you run at $50k a month, you’d have $50k a month set aside in your checking balance. Hopefully your accounts receivable are operating at greater than that. So basically you would have your balance running at somewhere between $50k to $80k, possibly even $100k. So you need to have roughly one month of expenses in excess of your […]
August 4, 2017

Preparing for Long Term Care

Most Americans aren’t prepared when it comes to long-term healthcare. Whether it’s the care of a loved one or your own, long-term care is something we should all be prepping for. In previous generations, elderly parents and grandparents could count on moving in with relatives when they were no long able to live alone. However, today’s ever-changing family dynamics means many Americans are reluctant to burden their families with caregiving duties. Long-term care are services needed to support someone who is elderly, chronically ill, disabled, or unable to care for themselves for a long period of time. Most long-term care is focused on helping people with daily activities like dressing, bathing, cooking, and using the bathroom. The associated costs are quite alarming as well. One study projected that healthy 65-year-old couples could expect to spend $260,000 on healthcare in their remaining years. Though we cannot fully cover a topic as complex as long-term care in a single post, here are several questions to help you start assessing your future needs. 1. What are the costs of long-term care? Most Americans can rely on Medicare for mamy routine medical issues and hospital procedures after age 65. However, there are limits to […]
July 29, 2017
Debt Reduction

Pay my Mortgage Debt or Invest? Which Should I Do?

The thought of being debt free sounds like a dream come true for most of us. Many folks are wrapped up in credit card debt, car payments, mortgage payments, etc. However, there’s one debt that freeing yourself from could do more harm than good, from a mathematical standpoint. That is your mortgage debt. Honestly, it’s often not a good idea to pay it off or even pay extra on it before age 50. I know individuals in their 30s who received big inheritances, went out and paid cash for a house to avoid a mortgage payment. To them, it was a good idea. I also know individuals that decided they wanted to pay their home off as fast as possible. As a matter of fact, I have some friends that are also clients that ended up in this exact scenario. They bought a house in another state during the downturn of the market. Recently, they sold it and made $100k, to which they planned to pay off the mortgage on their current home making them debt free. I said to him, “You know that sounds good and I understand, but you‘re dealing with about a million dollar decision right now. […]