Business wealth to personal wealth
CONVERTING BUSINESS WEALTH TO PERSONAL WEALTH.
TAKING CONTROL OF YOUR PERSONAL FINANCES
The most financially successful people in the world work with a longer-term view and choose long term thinking rather than short term gratification, when it comes to achieving financial success. Think long term and make short term action plans to achieve those goals.
Learn what you can about your financial statements, accounts, taxes and how to convert company wealth or business wealth into personal wealth.
Why have you created your business? What are you hoping to achieve? For many I have spoken to; they reached a place in their career where they decided they could serve customers better than others. They knew they could be better than someone already making money in a particular business as they had the skillset and knowledge to look after customers better.
The conversation can often flow around work / life balance. Not wanting to have a ‘boss’ and have the flexibility and freedom of working your own hours with clients and businesses you want to do business with. Again, we talk a lot about ‘freedom’.
I often discuss financial freedom (see article on Financial Freedom)
Although people go into business themselves, at times they don’t set clear goals for where they want to take their business. As things get busy, less and less time is taken working ‘on’ the business and many find themselves working longer hours, without clearly focusing on particular targets.
Without a plan for your business or your personal finances, how do you achieve financial freedom or your financial goals?
If you don’t take control of this area of your life (as a priority), then who will? Some people tell me their spouse looks after that part of their life, but if you’re in business for yourself, it’s always good to have clear targets.
Clear spending and saving goals and know how much you want to earn, put by, save, invest and keep for a rainy day.
Don’t leave this to someone else.
Ensure you have a good financial advisor who can help you work out how much you want for the future. Where you can save and invest and discuss what age you would like to ‘retire’. Perhaps retiring is taking a step back. You may want to travel more if your health allows and you may want to do this long before 65.
One of the most attractive, tax efficient ways for company directors to extract profits from a company and turn them into personal wealth is to transfer these profits into a company pension scheme.
Have a look at your options below if your company makes a profit.
An issue of delayed gratification comes into play with financial matters. As mentioned above, the most financially successful people do not spend all their income. Even when they had less, they thought about the future and made plans for their financial situation.
Taking control of your personal finances, working towards goals with clearly defined targets and an action plan, is key to getting ahead financially.
ACTION POINT –
When you review your year end accounts, how much money are you willing to put by for the future?
Decide now you will invest in your future and become financially free over the course of your lifetime.