Once you set up your retirement plan at work, the next natural question is: How much should I put in my 401(k)? While thereâs no ironclad answer for how much to save in your employer-sponsored plan, there are some important guidelines that can help you set aside the amount thatâs right for you: e.g. the […]
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For decades, Harold has been building his business after starting it from scratch. He is now preparing to sell his company by identifying all of the companyâs assets for a prospective buyer. Harold and his CFO identify the valuable tangible assets, such as equipment, rolling stock, cash, equivalents and accounts receivable. They chronicle the balance sheet and send it to their business broker, lawyer and CPA for review.
Almost immediately, Haroldâs lawyer calls and asks him where the intellectual property is located. Harold tells him that he has none, adding that he has no patents, no trademarks or copyrights. He tells his lawyer that there simply arenât any IP issues.Â
Haroldâs attorney replies that of course, the company has some IP. He reminds Harold that he doesnât do the exact same thing as his competitors the exact same way. Harold agrees.
The attorney adds that this means there is intellectual property, adding that Harold just wasnât aware of what it is, where it is, or how to best protect it. He cautions Harold that he does not want him to sell his company and its intellectual property without getting paid for it.
Harold is seeking maximum value for the business he created and grew with blood, sweat, tears and sacrifice. Yet he was about to leave a significant amount of money on the table because he failed to understand his ownership of valuable intellectual property. His lawyer drives the point home even further, warning that if he doesnât identify his IP on a schedule of assets that two potentially disastrous things can happen:
But all does not have to be lost.
On the eve of selling a company it is too late to first have a conversation about protecting IP, but better late than never. Companies have intellectual property, but they might not know where or what it is. And even though a business owner may not know quite how to protect it, or exactly how valuable it is (thatâs what your intellectual property lawyer is for), it needs to be identified. If that can be accomplished, you can work with an IP attorney to secure it and make it exclusive to you for your benefit.
Where is this intellectual property typically? Itâs usually not in patents, and many companies, especially those in the B2B space without consumer-facing products or services, donât have valuable trademarks. But almost every company has know-how. For example:
Or how about this â you are a manufacturing company that has 50 machines to make widgets. One employee in one plant responsible for one of those machines has figured out how to turn the knobs and pull the levers on that one machine to make it run just a little better. That know-how is intellectual property. But wait, thereâs more! Did that employee know what they created? Does your company have a process for identifying important innovations so that instead of having one of 50 machines run better, that know-how is communicated across the manufacturing base so that all 50 machines run better?
It is likely you have intellectual property after all, and if you can identify it, you can protect it. Information you donât wish others to know about can be protected by strict adherence to a trade secret policy, which can be combined with strong security protections to secure those trade secrets under lock and key within the company.
Key employees, contractors and business partners can, and should, be bound by non-disclosure agreements to keep your information secret. The top innovators and business managers should collaborate periodically, sharing valuable know-how and business improvements (like the machine improvement) so the entire company can benefit.
If an innovation is going to become public, such as a new product going to market where it can be copied, an intellectual property lawyer can advise on the correct protections to keep competitors from doing just that. These protections might include utility patents, design patents, trade dress protection or other techniques.
As it turns out, Harold does have intellectual property he can identify. He just wishes he had gotten an intellectual property lawyer involved sooner.
Wells Fargo landed in hot water several years ago when it was revealed that employees had created millions of fraudulent accounts in order to make their sales targets. Increased consumer acceptance of online banking, where customers can expect better interest rates and mobile apps, has also posed a problem for Wells Fargo, whose core checking [â¦]
This was originally published on The Penny Hoarder, which helps millions of readers worldwide earn and save money by sharing unique job opportunities, personal stories, freebies and more. The Inc. 5000 ranked The Penny Hoarder as the fastest-growing private media company in the U.S. in 2017.
Some of the links in this post are from our sponsors. We provide you with accurate, reliable information. Learn more about how we make money and select our advertising partners. If youâre in the market for a personal loan â also called an installment loan â in 2022, expect to pay a higher interest rate [â¦]
This was originally published on The Penny Hoarder, which helps millions of readers worldwide earn and save money by sharing unique job opportunities, personal stories, freebies and more. The Inc. 5000 ranked The Penny Hoarder as the fastest-growing private media company in the U.S. in 2017.
If you were to characterize the perfect investment, how would you describe its features? You most likely are describing something that doesnât exist â a financial unicorn that, if it actually did exist, would do away with all other financial products. But even though it doesnât exist as a single product, there are ways to design an ideal portfolio of products that encapsulates the features you desire; you just have to know what youâre looking for to do it.
Business coach Dan Sullivan has a saying, “Our eyes only see and our ears only hear what our brain is looking for.â In other words, to find what youâre looking for, it is essential to know what youâre looking for.
Simple concept, right? But I see people making mistakes with their money on a daily basis in my practice by overlooking options that arenât the status quo. People default to doing things that donât always align with what they want to achieve. Here are a few examples Iâve seen:
In each scenario we see people looking for financial security settling for a typically accepted path out of a desire to do âsomething,â but itâs most often not what they are looking for. This disconnect is a result of the continuous drumbeat of the status quo:
 This advice is repeated over and over, leading people to aimlessly follow this ideology simply due to the absence of any other obvious options.Â
However, these three concepts for handling money can cause more problems and difficultly for people than anything else other than debt issues. The simplicity of it makes it appealing and, on the surface, can make reasonable sense, but the results are underwhelming and mostly frustrating. Why? Because:
Is this how you would describe your perfect investment? Of course not, and while there is no perfect investment, you do have a choice: You can settle for the status quo, or you can think outside the box and do something different.
As I mentioned, what most savers are looking for is financial security. I define financial security as having access to cash when you need it for the rest of your life. This is easier said than done, of course, but it is where we need to begin.
There are four broad categories to consider when looking for products to accomplish this goal. Long-term growth, consistent income, access to cash and tax mitigation.Â
Aside from entrepreneurship and real estate, public stock markets have the highest growth potential over the long term. But there are two other aspects to growth that savers often overlook: growth through income and the idea of uninterrupted growth.
Growth through income centers around an asset creating income to reinvest, and it is best achieved through private markets, such as real estate, private equity and private debt. There is simply too much volatility in public markets to effectively pursue a growth through income strategy. It can be done but not as effectively.
Uninterrupted growth has more to do with how money is flowing. Let me explain. When you spend money, that money is gone and no longer working for you. However, using a private banking strategy that capitalizes on the unique features of a whole life insurance policy, you can actually have money accumulating in the contract while borrowing money to make your purchases. This leveraging strategy keeps your money growing uninterrupted while accessing money through loans collateralized by the contract. In other words, youâre building wealth on money you would otherwise spend. This is one of the most underutilized strategies because most people (including insurance agents who sell insurance) donât understand how it works.Â
One other thing about the insurance design ⦠the money grows and is accessible tax-free without age restrictions. This is a big deal as you will see in a moment.
Stacking these three growth strategies together expands your diversification, reduces risk, reduces volatility and can increase your wealth more efficiently and with more control.
Having consistent income ranks highest on the list of things needed to have financial security and is the primary reason traditional investments in the public stock market held inside or outside of traditional retirement accounts are less likely to be used for this purpose.Â
Without consistent income flowing into your checking account, you cannot effectively manage your cash flow, and if the source of that income is at risk of losing value, you add another layer of insecurity about the longevity of your income. This is a huge revelation for people, considering that the public stock market is the status quo default in retirement plans and is the least manageable of all ideas being discussed.
You cannot control the markets and therefore cannot predict the income, account value or its longevity. Itâs all hypothetical to assume what stock markets will do, but supporting your cash flow needs for 30 years in retirement is not hypothetical ⦠itâs real, and there is little margin for error.
Annuities and private market investments are best suited for income and should be the primary source for fulfilling the goal of having consistent income. You just need to know how to solve for this effectively.
Having access to cash is also high on the list for financial security and is another reason traditional investment in the public stock market held inside or outside of traditional retirement accounts is not the best option for holding cash. Age restrictions, market volatility and tax liabilities are all downsides of these products, making them problematic for storing cash.
Bank accounts are another default option for storing cash, but these accounts earn close to nothing and are taxable. Those two reasons alone are motivation to find an alternative.Â
Again, public markets are best suited for long-term growth, and banks are best used for moving money around to pay your bills and conduct business. They are not best suited for holding cash.Â
A specially designed whole life insurance contract as previously mentioned is much better suited for storing cash with tax-free growth, tax-free access, consistent growth and no government age restrictions.
Everyone desires tax mitigation, but it is mostly heard about and seldom seen in real life. The reason is simple: These strategies fall outside the status quo. People mistakenly think tax deferral is a tax mitigation method, but in actuality it is the primary source of tax problems in retirement.
It is a paradox that people who defer taxes with 401(k)s, IRAs and other similar retirement accounts think they are saving on taxes â because they are actually causing a larger tax problem for themselves. True tax savings is not tax deferral. Tax deferral just kicks the can down the road.
If you are already in a situation where you have a large amount of money in tax-deferred accounts and are looking for strategies to convert taxable assets to tax-free, then you will want to work with a team of experts who can help guide you through what is being discussed in this article.
The process for this is situational and has no magic formula for the masses, but I do want to state that this isnât simply advice for a Roth conversion. A Roth conversion can certainly be part of a tax-mitigation strategy to prevent the problem from expanding into the future, but we must first attempt to minimize the taxes of the conversion.
The status quo will have you believe that there is nothing more to learn and that trusting banks and the government is in your best interest. As ridiculous as this may sound to you, deferring taxes in a 401(k), storing money in the bank, and accelerating the payoff of your mortgage is exactly what defines status quo.
The biggest challenge is to remain open-minded and consider the fact that there is a better way. There is a saying that goes, your brain is like a parachute; it only works when it is open.
If you wish to learn whether what the ua-wealthy are doing can work for you, complete the Family Office Quiz at TakeBriansQuiz.com to see if you qualify.
In March, the Federal Reserve raised benchmark interest rates for the first time since 2018. And in the intervening weeks, Fed Chair Jerome Powell has been increasingly clear that even higher rates may be on the way soon. That has investors scrambling to scrape up the best stocks for rising interest rates.
Speaking on March 21, Powell said the central bank will move “expeditiously” and “more aggressively” towards higher interest rates. That has left little doubt in the minds of many investors about what’s in store for the markets in the coming months.
To be clear, rates are still relatively low even after all this. The effective federal funds rate now sits at 0.33% instead of 0.08% prior, but that’s not even within earshot of rates from prior decades that were several full percentage points higher.
Furthermore, rising rates should never be seen as a death knell for the economy. In fact, the presence of rate increases is because the Federal Reserve sees inflation as a bigger risk to the U.S. economy than the burden of higher borrowing costs. If businesses and consumers weren’t churning along, there would be concerns of how these rate hikes would be absorbed, keeping Powell and other policymakers in check.
There are certainly changes that are afoot as a result of higher interest rates, but investors should not make the mistake of thinking these moves means you should abandon the stock market entirely. Indeed, several of the best stocks for 2022 had the potential for rising rates on the mind, and today, we’ll be looking at a few that are tailor-made for this environment.
Here are 10 of the best stocks for rising interest rates. The potential options presented here are for those concerned about mitigating the impact of rising interest rates throughout 2022.
Data is as of April 3. Dividend yields represent the trailing 12-month yield, which is a standard measure for equity funds.
A salary reduction contribution plan allows employees to reduce their taxable income by investing for retirement. So an employeeâs salary isnât really reduced; rather the employer deducts a percentage of their salary and deposits the funds in a retirement savings plan so the money can grow tax deferred. Common employer-sponsored retirement plans include 401(k)s, 403(b)s, […]
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Update 4/1/22: Deal will end April 11 at 4 ET. Chase and Hyatt launched today a new World of Hyatt small business Visa credit card which boasts a 75,000 points signup bonus and comes with a $199 annual fee. The card comes with two $50 annual Hyatt credits, 10% points bonus with $50,000 spend, Discoverist […]
Cash management refers to the day-to-day process of gathering and managing oneâs cash flow. In business, cash management is typically handled by an individual or the team running the company in order to optimize financial performance. Effective cash management can also be important for individuals when they are setting personal budgets; the same principles can […]
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Business bank accounts can help owners keep professional transactions separate from personal banking and aid in their business cash management. These accounts often come with special conditions and requirements, and they may have various fees. Here, weâll take a closer look at these accounts, their pros and cons, and what it takes to open one. […]
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