Posts Tagged ‘Self-employed’

Relationship Capital: An Advice Practice’s Most Valuable Balance Sheet Asset

Monday, August 21st, 2017

An article from Riskinfo E Magazine that highlights the most valuable asset for any business that is often overlooked when looking at the Value of the business, but in reality is the platform on which any good business should be built. It’s about Trust, integrity, and relationships – something we at Active Wealth Managers firmly believe in and practice.

When we think of business capital, it is done in financial terms, for without this asset it is impossible for an advice focussed enterprise to operate or grow.

Mentor Education argues that ‘relationship capital’ is equally vital. In fact, it is the foundation for developing new markets (and clients) – and a quick glance at the financial statements will reveal how much of this asset a business has.

Business isn’t a spectator sport, and how well you develop and nurture relationship capital will define and play a major role in its financial success…or failure.

Building relationship capital

Developing strong relationship capital is a business strategy that’s often overlooked and even approached in a superficial or tokenistic manner.

It’s the relationship capital of your people that combine to become the reputational capital of your business.

But the effort put into building good relationship capital is one of the most cost- effective strategies with potential to deliver extraordinary outcomes.

It takes thought, practice, and the right attitude to get it right with the key focus being trust, sincerity, honesty, integrity and dependability – that when combined create the business culture, and in turn the reputation capital.

The practice principal and key personnel of an advice business build culture over time, as a result of their daily activities and interactions. It’s the relationship capital of your people that combine to become the reputational capital of your business.

When people think of ‘networking’, they often do so through a very narrow prism of networking events, adding contacts to a database, having meetings, etc.

In order to build relationship and reputational capital, a broader view is required.

With every P2P interaction – client, employee, the local café cashier – you’re engaging with people in your network, and the manner in which you speak and engage with each and every one is either contributing to or deducting from, your relationship capital.

Therefore, choose words, topics, and your thoughts carefully.

How many interactions have we all experienced with people that were lazy, argumentative or patronising in the way they sought or articulated information?  Those people are undermining their personal and commercial capital, one careless and thoughtless interaction at a time.

We are all brokers of information, and the quality of the information is determined by us, and how well we deliver it.

Networking and engaging with other people is something that deserves more thought and preparation than many people give it. To be successful and effective it must be strategic and tactical in its application and purpose.

If you’re going to put time into networking, you must also put in the effort required to maximise the opportunities and outcomes.

Time isn’t money – relationships are money

Reflect on those significant client win successes: was it related to the number of hours worked each week on the proposal, or was it the rapport and depth of relationship and trust developed with the client?Developing relationships demands a significant time investment, but it’s the quality of the relationships – and the amount of relationship capital developed – that you’ll be able to take to the bank!

The extent to which positive, trusting and solid relationships are built will ultimately be reflected in the balance sheet.

Remember, people can open doors for you, but you must walk through them to find the opportunity. No matter how many networking events you attend, only you can build relationships with the people you meet.

It’s important to understand the opportunity cost to you of not networking well

The cost of not getting it right

Some might say that it’s difficult to measure the success of networking and building relationship capital. I would argue that measuring your success in these areas is as easy as looking at the financial statements of your advice practice.

It takes time to develop good relationship capital, but it’s important to understand the opportunity cost to you of not networking well and failing to develop that capital.

Relationship capital grows into reputation capital for your advice business over time. If you view this type of capital as an asset, you’ll see the sense in growing and protecting it. And as it starts to increase, you’ll see a corresponding increase in opportunities, and in your financial statements.

If you’re a reluctant networker, let me leave you with these two quotes:

“Life isn’t about finding yourself. Life is about creating yourself.” (George Bernard Shaw)

“Death is not the greatest loss in life. The greatest loss is what dies inside us while we live.” (Norman Cousins)

 

Article from Riskinfo E Magazine

Issued by Mentor Education RTO 21683: www.mentor.edu.au

PROTECTING YOUR FAMILY

Thursday, August 4th, 2016

3d-person-getting-it-right-

INSURANCE

If you are suddenly diagnosed with a major illness or experience a death in the family there is very little time to plan how the family will cope financially.

You might be thinking insurance is something you can sort out later but research shows that 1-in-5 Australian families will be impacted by the death of a parent, a serious accident or an illness such as cancer that leaves a parent unable to work during their working life. Yet 95 per cent of families do not have adequate levels of life insurance * There are things you can do to ensure that you and your family are covered.

UNDERSTAND THE DIFFERENT COVER TYPES

Unlike general insurance which covers assets such as your car and your home, life insurance can protect the financial contribution you make to your family.

There are different types of life insurance that generally cover different life events:

  • Life cover provides security for your family’s future by paying a benefit if you die or are diagnosed with a terminal illness.
  • Income protection can help replace a part of your income (for a set period of time) which can be used to cover living expenses if you are unable to work due to illness or injury.
  • Total and permanent disability (TPD) cover can provide financial support if illness or injury stops you from returning to work or normal domestic duties.
  •  Trauma cover allows you to protect yourself against the financial impacts of being diagnosed with one of a number of serious medical conditions, such as cancer or a heart attack, by paying a benefit.

In practice, you may need a combination of these products depending on your family’s needs and existing financial resources.

PLAN AHEAD

The best way to plan for your family’s future financial security is to ask ‘what if ?’. What if one parent died or was unable to work due to an accident, illness or permanent disability? With the loss of an income you and your family could struggle to meet their daily expenses and ongoing financial commitments.

While families with children have an added incentive to have adequate life insurance cover, young couples and singles may also need protection. What if you become critically ill and need to take time off work? Do you have enough sick leave to cover the rent or mortgage and other living expenses?

Once you have a clearer idea of the amount of money you would need to preserve your family’s current lifestyle, it’s easier to work out the right level of cover for your circumstances.

Life insurance and income protection insurance allows you to approach the future with confidence, knowing that the life you’ve built is protected.

As a financial adviser, I can help you determine the types and level of cover that you need to ensure so you protect your most valuable asset – you. Call me on 0893492700, and we can discuss this further.

Lifewise/NATSEM Underinsurance Report – Understanding the social and economic costs of underinsurance, Feb 2010

Self-employed? Here are three things you should do before end of financial year

Friday, April 22nd, 2016

hand holding bag of moneyIf you’re self-employed, here are three ways to make tax time easier — and maybe save money too.

If you’re one of the two million or so self-employed Australians out there1, you’ll know how time-consuming the end of the financial year (EOFY) can be. So the earlier you get organised, the easier it will be when tax time comes around.

1. Understand what you can claim

As a self-employed person, you can claim expenses that many employees can’t. However, they must be bona fide business expenses — and you’ll need the receipts and paper-work to prove it. For example, you can claim:

· Petrol — but only for work-related travel, and you’ll need to keep a logbook.

· Travel expenses — but you’ll need receipts, and the trip needs to be genuinely for business (and for more than one day).

2. Top up your super

According to the Australian Super Funds Association (AFSA), in 2012 nearly 25% of self-employed Australians had no super whatsoever2. This could lead many to suffer financial hardship in retirement.

So make sure you make contributions yourself. You can contribute up to $30,000 (or $35,000 if you were aged 49 or older from June 30, 2014)3. Remember, if you’re self-employed, you may be able to claim all your super contributions at tax-time — but do it before the end of the financial year.

3. Protect your income (it’s tax effective)

If you work for yourself, you’re not entitled to Workers Compensation. So it’s worth taking out income protection insurance to protect your income from the risk that illness or injury may put you out of action for a while.

Generally, the premiums are tax-deductible, making them more affordable. You may also be able to buy income protection insurance (and life insurance) through your super fund.

Advice can help

Running your own business, while rewarding, can be time-consuming and complex — so it makes good business sense to get advice.

1 Independent Contractors, Independent Contractors: How Many? (Australia), November 2013 and Australian Bureau of Statistics 6359.0 – Forms of Employment, Australia, November 2013
2 ASIC, Smart Money, Self Employed People, January 2015
3 ATO, Concessional contributions cap, December 2014
Source: MLC

Any tax estimates provided in this publication are intended as a guide only and are based on our general understanding of taxation laws. They are not intended to be a substitute for specialised taxation advice or a complete assessment of your liabilities, obligations or claim entitlements that arise, or could arise, under taxation law, and we recommend you consult with a registered tax agent. This information is based on our interpretation of relevant superannuation, social security and taxation laws as at 20 March 2015.

Article prepared by Infocus Securities