10 Biggest Financial Mistakes By Small Business And How To Correct Them

Mistake No. 1

25 YEARS MORTGAGE: why? For example, if you pay $270, 000 for Each $100, 000 of mortgage at 10% interest.

CORRECTION: Get a 15 year mortgage and Increase your payments by only 18%.

Result: You pay $192, 240 for each $100, 000 of Mortgage.  You save $77, 760.

 

Mistake No. 2

BUYING WHOLE LIFE INSURANCE POLICIES: why?

The most expensive type of life insurance.

CORRECTION: Buy level premium term insurance.

Result: Save up to 70% on premiums.

 

Mistake No. 3

BUYING ENDOWMENT INSURANCE AS AN INVESTMENT:

Why? Poor investment returns due to high Charges and poor tax efficiency.

CORRECTION: Keep life insurance separate from Savings and investments.

Result: Save on life insurance premiums and Improve returns.

 

Mistake No. 4

BUYING NEW CARS: why? Cars depreciate 30% to 50% In the first two years.

CORRECTION: Buy a 2 to 3 years old car.  

Result: Save thousands of Money, Pounds and Dollars.

 

Mistake No. 5

NO RETIREMENT PLANNING: why? Over reliance on Government pension.

CORRECTION: Join your company scheme after a thorough check Or set up a private pension Scheme after taking advice.

RESULT: Because pensions have more tax advantages

Than any other investment, the government is Subsidizing your retirement. Contributions are Tax deductible and investment profits are free of Tax.

 

Mistake No. 6

PAYING ALLOWANCES TO CHILDREN FROM AFTER TAX INCOME: why? Allowances are taxed at the parents Tax rate.

CORRECTION: Pay children wages from your small Business, subject to hours and age limits.

RESULT: Save up to 40% of every $1, 000 of Allowances. 

Mistake No. 7

NON DEDUCTIBLE COMPUTER AND CAR: Why? Its an Expense. Used in a small business, it can be Deducted.

CORRECTION: Depreciate within the small business.

RESULT: Assets for business are deductible over

Time.

 

Mistake No. 8

BUYING INDIVIDUAL SHARES, GILTS, PRECIOUS METALS

OR COMMODITIES: why? Risky.
CORRECTION: Invest in equities or gilts through Unit Trusts to ensure spread of risk.

RESULT: Lower risk investments and ability to Switch between cash equities or gilts to match Economic cycle. Benefit from professional Management.

 

Mistake No. 9

NO ACCESSIBLE CASH: why? Urgent cash requirements Can interrupt investment or require expensive Borrowing against investments.

CORRECTION: Build up cash reserve of 3 months Income in a TESSA, Cooperatives or building society.

RESULT: Avoid forced liquidation of investments Or higher interest loans.

 

Mistake No. 10

SURPLUS SAVINGS IN BUILDING SOCIETY: why? Low Return.

CORRECTION: Beyond 3 month's cash reserve, invest Additional funds according to Flexible Investment Strategy.

RESULT: Gain reliable long term returns on your Funds. All The Best.

5 Simple Guidelines To Success

The path to success is of course different for anyone and every individual. There is no clear cut way that will work for everyone as we are all different and unique in our various ways. But the following tips might be a helpful guideline to better improvements.

1. Know what you want, when you know yourself and who you are it is much easier to discover what you want.
 Look into your heart, what has made you happy in the past, what do you enjoy doing. Use this to get an understanding of how you want your future to be.

2. Plan your project. It is much easier to get things done when you already have an understanding of what needs to be done. Do this from the very start, plan for everything, and if something unexpected occurs, find a way to make it fit into your plans.

3. Don't make failure an option, prepare yourself for success.
When you act as if it is within and develop the right mindset the path to success will be much easier, it will be a given that you will succeed.

4. Find the purpose for what you want to achieve, and set goals to get you there.
This will give you direction and help measure your progress, which will raise your motivation as you begin to see you are working towards the completion of your project.

5. Learn from others. We all make mistakes, the best thing is to learn from them and not repeat them in the future. But it is also not necessary to repeat those common fall pits others have made before you.
Read Motivation Books and success stories, duplicate their efforts and learn from their failures.

These simple guidelines can be of tremendous help to everyone who are struggling to get where they want to be. So if you feel stuck, take the time to follow the steps above and you will begin to see results. Best Of Luck To You.