Important Things To Do Before Retiring

As people gradually enter various stages of their later life, they may begin to consider the merits of retirement. While some individuals decide to keep working, others feel as though they have worked for long enough and are ready to retire. However, before one enters retirement, there are some very important things they need to do.

Make Sure You Have Enough Money to Retire

The desire to retire from work is understandable, especially as people get older. However, ensuring that one has enough funds is absolutely paramount. According to The Balance, retirees should have enough capital to maintain their current lifestyle. People who are looking to retire should also be able to cover expenses such as car and house maintenance, utilities, and any unforeseen financial emergencies. In many cases, people spend years, if not decades saving up for retirement. One of the worst things in the world would be to retire and then abruptly have to re-enter the workforce due to depleted funds.

Sitting down with a financial adviser prior to retirement is also recommended.

Decide What to Do During Your Retirement

One of the many upsides of work is that it provides structure. Many people wake up in the mornings, go to bed in the evenings, and schedule the activities of their day around their professional duties. Structure comes with both advantages and disadvantages, however, many factors change after an individual makes the decision to retire.

Gone are the days of having to abide by a certain timeframe or schedule. Theoretically, a retired person can do whatever they want to do with their day, so long as they are able to financially support themselves. This is where hobbies and interests come in. Many retirees may decide to take a class, travel, or otherwise engage in activities which they couldn’t partake in during their working years.

Regardless of what retirees decide to do during their new phase of life, having interests and passions is so important. The pitfalls of simply sitting at home all day and doing nothing are well documented. Retirees should make it a point to frequently leave their homes, engage with other people, and make sure that their bodies and minds remain active. Exercise and volunteer work are some productive and affordable activities for retired persons to consider.

A Final Word

Retirement has always been meant to be a time of relaxation, reflection, and hopefully growth. Although the majority of retirees are older people, there is always more room for development. With the proper financial planning, retirement can be an amazing, enriching part of life. Ultimately, each person will have to make the decision as to whether or not he or she believes themselves to be ready and properly prepared for retirement.

If you are retired, what steps did you take to prepare for this new phase of life? If you are still in the workforce, are you considering retirement at a later date? If so, which course of action are you embarking upon to get ready for life as a retiree? \

Authored by Gabrielle Seunagal

The Importance of Investing

In 2018, one of the most important steps that one can take towards financial success is investing. Not only does investing put one’s money to work, but it also allows the individual to grow his or her own money. Of course, poor investments usually engender lost funds, whereas wise, strategic investments grow one’s income. Some of the wealthiest people in the world invest in one form or another.

Knowing Where to Get Started

As noted by The Balance, many people who are new to the world of investing begin by placing capital in the stock market. There are many upsides to this course of action. First and foremost comes options and flexibility. There are many companies which sell shares of stock for various prices. Investors can purchase as few or as many shares as they please. Some individuals begin by purchasing smaller amounts of stock and gradually invest more capital once they establish levels of comfort and familiarity with the stock market. Of course, each person has their own investment strategy which hopefully works well for them.

Individuals can also invest in real estate, privately held businesses, publicly traded businesses, and more.

Benefits of Investing

F&C Investments notes the plethora of merits associated with making wise investments. First and foremost comes the probability of seeing a return on one’s capital. A person who wisely invests $10,000 could possibly earn $100,000 or more in a matter of years. However, risk is an inherent factor that comes along with investing in any entity, be it real estate, mutual funds, or stocks and bonds. While some people are able to turn a profit on their investments, there are others who lose every penny. Although there are no guarantees, the potential for growth is a considerable upside that all investors should be aware of and aspire to achieve.

Another benefit of investing is the creation of a new passive income stream. Passive income is economically defined as “earnings derived from a rental property, limited partnership or other enterprise in which a person is not actively involved.” The majority of people have at least one stream of non-passive income, however, non-passive income, alone, is simply not enough. Passive income is especially paramount for individuals who aspire to boost their net worth or simply increase their wealth and earnings. The majority of well-off individuals have at least one avenue of passive income.

A Final Word

While each individual can benefit from strategic and fruitful investments, they should first ensure that they are in a position to handle the risks that come along with investing. For instance, capital needed for important expenses such as rent, childcare, utilities, groceries, and bills should not be invested. Those who wish to invest but currently lack the funds to do so should gradually prepare themselves by putting a certain amount of money aside. As they work to acquire their desired amount of funds, the person at hand can take time to learn which entities they wish to invest in.

Authored by Gabrielle R. Seunagal

Signs That You Should Go Into Business For Yourself

In current times, more and more individuals are choosing to go into business for themselves in one form or another. However, self-employment is not for everyone. Despite the many upsides and benefits that come along with entrepreneurship, going into business for oneself for the wrong reasons can have horrific impacts. Individuals who feel ready to take the plunge into self-employment should first make sure that going into business is their best course of action.

You Are Comfortable With Risk

Risk is an inherent factor which comes along with pursuing entrepreneurship and going into business for oneself. Some people are comfortable with risk, while others prefer to remain in their comfort zones and have a safety net. Neither inclination is right or wrong and nobody deserves to be shamed for either taking risks or playing it safe.

However, circumstances change considerably when an individual is thinking of going into business for themselves. Anyone who wishes to pursue self-employment needs to be comfortable with risk. Working for oneself is a venture which requires hard work, persistence, overcoming learning curves, and so much more. Some people will make it as entrepreneurs and others won’t. Risk comes with the territory of self-employment; those who are adverse to risk are more likely to fare well in professional avenues outside of entrepreneurship.

You Are Passionate

In the world of self-employment, passion is equally as important as comfortability with risk. Passion is what drives people and keeps them motivated. As pointed out by The Balance, motivation is critical for entrepreneurs and others who are going into business for themselves. Individuals who are passionate about their business ventures are considerably more likely to put in the hard work even when it’s difficult and go the extra mile.

Passion furthermore serves as fuel against critics and naysayers. Virtually everyone who has chosen to go into business for themselves has faced skeptics who have doubted their abilities. Self-employment may be a rising trend in the workforce, however, there are still some people who view traditional employment as a more practical, feasible line of work. Nevertheless, individuals who are truly passionate about going into business for themselves will not be swayed by critics.

You Are Willing to Work Hard

Anyone who wishes to succeed in life has to work hard in one way or another. This especially applicable for individuals who have decided to go into business for themselves. Entrepreneurship requires grit, persistence, and determination to succeed. The aforementioned traits are truly important for people who are just starting off. There will be bumps in the road, challenges, setbacks, and difficulties, but this should never halt one’s work ethic or determination to grow their business.

A Final Word

As the popularity of self-employment increases, more and more people will have to decide whether or not going into business for themselves is something they wish to do. Automation and other forms of technology are rapidly changing the world of work from what we once knew it to be. Those who decide to take the plunge and pursue entrepreneurship should always remember that risk, passion, and an unbeatable work ethic will serve them well.

What Self-Employed People Need to Know About Taxes

Virtually everyone dreads tax season and the inherent complexities which often accompany it. The process of doing one’s taxes have become so difficult that many people hire professional accountants or tax specialists to take care of the procedure. However, taxes are somewhat different for self-employed individuals and whether they choose to do their taxes on their own or employ the services of a professional, it is still critical for people in business for themselves to have certain tax-related knowledge.

Self-Employment Taxes Vary from Person to Person

The amount of taxes that self-employed individuals will have to pay depends upon many factors. Taxes for sole proprietors will vary from taxes owed by LLCs, S-corporations, etc. Another important factor is income. Generally, people who earn more money owe more money to the government, although deductible expenses and applicable tax write-offs can decrease taxes for self-employed persons.

The Balance moreover cites increasing one’s business-related expenses as the most efficient ways for self-employed individuals to reduce the amount of taxes that they owe to the federal government. There are many applicable deductible business expenses including, but not limited to, insurance, advertising, rent, security, travel, etc.

A full list can be viewed by clicking here.

Preparing for Taxes Can Make a Considerable Difference

According to TurboTax, one of the best ways for self-employed individuals to prepare for taxes is by using a Schedule C. Not only does this somewhat simplify the process of doing taxes, but it also allows the individual to see how much money they earned or lost. As a matter of fact, the use of a Schedule C is mandatory for sole proprietors.

Self-employed individuals are also advised to prepare for tax season by securing a personal tax ID number and a business tax ID number. This truly comes in handy if business owners are mandated to provide their employees with W-9 forms.

Finally, the use of online financial tools like Quickbooks and Mint are excellent for helping self-employed individuals track their income, business expenses, and growth. Each of the aforesaid elements will play an integral role during tax season.

Knowing Whether or Not You Fall into the “Self-Employed” Category

Believe it or not, sometimes people mistakenly classify themselves as self-employed when they are actually employees. This mistake can severely complicate the process of doing taxes during tax season.

According to additional reports from The Balance, the official definition of self-employed individuals reads as follows:

“If you are in business for yourself, or carry on a trade or business as a sole proprietor or an independent contractor, you generally would consider yourself self-employed.”

A Final Word

Tax season can be inherently challenging for even the savviest business people. This is why many people choose to hire accountants or tax specialists. Although this option is available and often advisable, self-employed individuals who have, at least, somewhat of an understanding of taxes will be infinitely better off than their completely unaware counterparts.

There are many benefits of being self-employed. As the world of work changes and evolves, going into business for oneself is an avenue that more and more individuals are venturing towards.

Authored by Gabrielle Seunagal

How To Improve Bad Credit

The negative impacts of bad credit are extremely well-documented. The Balance strongly affirms that bad credit is generated by bankruptcies, property repossessions, late payments, and other poor financial decisions. Individuals who suffer from bad credit are furthermore likely to be charged higher interest rates and higher security deposits. They may also be denied loans altogether or have apartment applications turned down. Nevertheless, with the right lifestyle changes, bad credit can be transformed into excellent credit.

Do Not Buy What You Cannot Afford

One of the most common causes of bad credit stems from the individual’s decision to make purchases which surpass their budget. This could mean making excessive credit card charges or buying a house or car that one simply cannot afford. The consequences of living above one’s means come in the form of paying interest, having property repossessed, and, of course, maintaining a low credit score.

To avoid this unfortunately common mistake, people must remember to live below their means. Just about everyone wants to have a fancy house and trendy car, but not everyone can afford these luxuries at the desired time. In the foregoing situation, putting money aside for nice things and gradually saving is considerably wiser than making unaffordable purchases and being stuck with the devastating financial consequences.

Make Payments In Full and On Time

Another common error which often breeds bad credit is the failure to pay charges in full by the time they are due. Unfortunately, many individuals believe that they only have to make the minimum payments. Of course, this theory is incorrect. People who only make the minimum payments on their credit cards will face considerable interest charges on top of the funds that are already owed. In certain cases, interest charges have been known to outweigh original charges.

Interest should be avoided at all costs. It can take decades to completely pay off and moreover serve as metaphorical dead weight for anyone who is striving to improve their credit score. Some of the best ways people can keep track of the amounts owed to credit card lenders are by keeping track of payments and even calling the credit card company to find out how much more money needs to be put on the card to avoid incurring interest.

Look Into Getting A Secured Credit Card

A secured credit card is very much like a regular credit card, however, there are some differences. For starters, secured credit cards generally require customers to make deposits which amount to half or all of their credit limit. For instance, individuals who want a secured credit card with a limit of $1,000 will be mandated to make a $500 or $1,000 deposit before the card can be used. The purpose of the aforementioned payment is designed to cover customers who fail to make applicable credit card payments.

Many secured credit cards do come with application fees, annual fees, and processing fees. Individuals should be aware of the foregoing fees prior to obtaining a secured credit card.

A Final Word

Transforming bad credit into good credit is a step-by-step process which requires time, discipline, and patience. It may not occur in one day, but people who adhere to the aforementioned suggestions will inevitably see their credit scores improve with time.

Authored by Gabrielle Seunagal