The life of a business owner isn’t without its downsides and one of the main ones is financial security. Here’s how to ensure long-term financial security…
Despite the hard work involved, being a mompreneur is a rewarding life. You get to be your own boss, and your earning potential is virtually unlimited. The life of a business owner isn’t without its downsides though, and one of the main ones is financial security. Your earning potential might be far in excess of what you could have made in employment. It’s hard to rid yourself of the concern that things could go wrong, and you’ll be left with nothing.How to Ensure Your Long-Term Financial SecurityClick To Tweet
This mindset is illogical, because there’s no such thing as a job for life anymore. You could find yourself out of work just as easily (if not more so) than facing the loss of your business. At least with your business, you have a chance to rescue the situation, but if you’re fired, all you can do is look for a new job. What can you do to gain a more balanced view of your financial security? How can you reassure yourself that financial disaster isn’t about to strike?
How business owners think
The reason business owners worry so much about financial security is rooted in the early days of first setting up in business. No matter how successful you might be now, you probably remember distinctly how hard it was to get established.
You might have put your savings or your home on the line, or taken out substantial business loans to cover the start-up costs. Even if your debt is paid off and you’re raking in the cash, the memory of having so many financial responsibilities remains fresh. When you have kids there’s the added pressure of knowing they’re relying on you financially. All these factors add up to a substantial burden for you to carry.
The first step towards easing the stress of worrying about long-term financial security is to be realistic about your situation. If your business has grown and is making a profit, there’s no reason for it not to flourish in the years to come. If you find yourself thinking that there’s no way of dealing with unforeseeable disasters like a stock market collapse, remember, that’s the same for everyone. You’d probably be no better off if you were employed by someone else, and worrying about what you can’t control is a pointless exercise.
Looking to the future
The best way to ensure your financial security is to carry on growing your business and making it even more successful. You could get to a point where you can sell your business for a healthy profit, and start anew. With a substantial nest egg in the bank. You can also take some practical steps to make sure you and your family are protected should any financial issues arise.
Your business budget should include a contingency fund that covers any unexpected expenditure. This is vital for the security of the business. If you suddenly have to pay a large bill and there are no funds available. The money would have to come from you personally, or another loan. If you don’t have a reasonable contingency fund in place, set one up now. Your personal budget should also have an emergency fund in case you discover you need a new roof on your home, or the car blows a head gasket.
Once you’ve got your contingencies covered and all your expenses accounted for, what you have left each month is disposable income, and you can spend that however you wish. The easiest thing to do is put an amount away in a savings account each month. Build up a nest egg that you can keep as your own kind of insurance against the business collapsing.
If you want your money to grow, investments are the most profitable option. You can use a broker to deal with your portfolio, or create your own using online tools. You could also combine the two. Let the broker deal with the day-to-day trading, but make a contribution if you’ve spotted a potential investment that looks worthwhile. If you have a particular area of expertise, you could use this knowledge to spot a good investment. You might want to try using tips from industry experts and buy specific tech stocks.
Investing is the method that’s most commonly used by business people to grow their wealth. Don’t forget that there is a degree of risk involved in investing. You should never invest more money than you can afford to lose.
The contingency funds that provide a kind of protection against future expense, will secure your future by taking out appropriate insurance plans. Choose income insurance that covers you if you can’t work. Although availability and terms may vary for the self-employed. You could also take out life insurance so that if anything happens to you, your family can feel safe and they’ll be able to stay in their home.
Many life insurance policies work like an investment so that you can cash them in after a certain number of years. Although the balance you receive at the end of the policy’s term is not guaranteed and could be less than you put in.
By taking these steps to safeguard your finances, you will enjoy your life without worry. Having long-term financial security measures in place will give you breathing space. This will help keep your stress levels down and let you focus on your work and family.
Worrying about money is natural. Even when you’re well-off. But you can alleviate much of the stress by ensuring you’ve taken the most effective actions to secure your financial future.