Once you achieve Financial Independence, you may choose to leave salaried employment but with decades of vibrant life ahead, it’s too soon to do nothing. The new stage of life between traditional employment and Full Retirement we call Victory Lap, or Victory Lap Retirement (also the title of a new book to be published in August 2016. You can pre-order now at VictoryLapRetirement.com). You may choose to start a business, go back to school or launch an Encore Act or Legacy Career. Perhaps you become a free agent, consultant, freelance writer or to change careers and re-enter the corporate world or government.
Estate planning is like going to the dentist. Everyone knows they should do it. But whether it’s getting your teeth drilled or contemplating your mortality, we’d all rather fill our time with just about anything else.
For entrepreneurs, this problem is even more acute. Your business depends on you, and high-priority items constantly appear at the top of your to-do list.
What I’ve found as an estate planning attorney is that my clients can get more done when we approach estate planning in a systematic way. This post contains an actionable plan for entrepreneurs like you to design and implement an estate plan.
I’ve organized the list by priority, with the most critical items first:
Obtain Term Life Insurance
If you have minor children, life insurance is the most important component of your estate plan. Most parents of young children simply haven’t had enough time to accumulate sufficient wealth to sustain a family without any additional income.
I like term insurance for this baseline protection because it’s cheaper than a permanent policy.
I also recommend that both parents have policies. Irrespective of who earns the income, both parents contribute to the household.
For the benefit amount, err on the side of more coverage and consider purchasing separate policies (e.g., two $1 million policies rather than one $2 million policy). This allows you to scale back the coverage amount without dropping coverage entirely.
If you don’t have children yet but are planning to, I still suggest getting coverage now. Life insurance premiums increase with age and pregnancy-related health issues may make it difficult to secure coverage later.
Create a Revocable Living Trust
A basic revocable living trust is the foundational legal document for an estate plan. Its purpose is to keep you and your property out of conservatorship and probate proceedings.
Included in this step is creating the other estate planning legal documents:
A pour-over will ensures that all property is distributed in accordance with the terms of your living trust, even if it’s inadvertently left out of the trust;
A durable power-of-attorney authorizes a financial agent to conduct transactions on your behalf if you’re incapacitated;
A medical directive authorizes a healthcare agent to make medical decision for you if you are unable to and specified your healthcare and end-of-life wishes (in some states, two separate documents are prepared for this purpose);
A guardian nomination appoints a guardian to raise your minor children if you are unable to.
Be sure to actually fund the trust! This is one of the biggest mistakes people make. This involves transferring title to real property, opening new financial accounts (bank, brokerage, etc.), and updating beneficiary designations.
Establish and Implement a Written Financial Plan
Estate planning is more than just creating a set of legal documents. It’s a multifaceted plan to achieve positive outcomes for you and your loved ones. So, while the first two items on this list are about limiting your downside, this item concerns your upside. Continue Reading…
My latest MoneySense Retired Money column is a bit of a departure in that its focus is on 57-year old blogger and YouTuber Alain Guillot, who came to Canada from Columbia with nothing but entrepreneurial gumption and a dream of being part of the North America depicted on TV at home.
The re-election of Donald Trump is almost certain to make Immigration an even more contentious issue. However, as I am myself the child of (British) immigrants I am naturally sympathetic to those who are brave or desperate enough to leave the land of their births to find opportunities in North America.
Which is one reason that over the past year, I’ve been corresponding with an interesting blogger and former financial advisor, Alain Guillot, and occasionally republish his blogs on my site, Findependence Hub. It’s called simply AlainGuillot.com
He aims to write at least one blog a week and has 600 subscribers on his YouTube channel, where he is more than half way to being able to monetize it. Now Guillot has just self-published a short e-book entitled The Wealth Paradox: Navigating Money, Free will, and Success, which you can find on Kindle for a very reasonable price. The subtitle explains more: How unconventional thinking influences your Financial and Personal Life.
Side hustles and Entrepreneurism
One reason Guillot got my attention in the first place was that he emigrated to Canada from Colombia, a place I once visited (San Andres). He soon discovered he was almost forced to become an entrepreneur in Canada. Continue Reading…
I see it all over social media, people promoting self care while taking a bubble bath, or attending a yoga class. The problem is that most who need self care, can’t afford it. And those who can afford it, don’t need it.
You’ll see Elon musk, Warren Buffett, Bill Gates, Jeff Bezos, or Mark Zuckerberg promoting the idea of going to the spa and getting a massage and a bubble bath. They don’t need it. They have multiple streams of income and don’t feel the stress of someone who’s struggling to pay the rent.
Traditionally, self-care has been associated with activities that promote mental, emotional, and physical well-being, such as taking a bubble bath or practicing yoga.
Do you know what’s the major cause of stress, anxiety and depression? Lack of money.
Most of the problems we have are money related: housing, car payments, retirement, etc. If we have several streams of income, most of our problems would dissolve.
A bubble bath is nice but several streams of income is nicer
Here is a list of how having several streams of income can be the most important form of self-care: Continue Reading…
Business finances are important for any company to pay attention to, but perhaps more so for small- and medium-sized enterprises (SMEs) given their limited capital and their need to make the most out of every single buck.
Errors or miscalculations in an SME’s financial records can potentially lead to disastrous consequences, such as an untimely shortage of funds, inefficient business decisions due to wrong financial forecasts, and — if worse comes to worst — a state of being in the red.
One of the best safeguards against troubles like these is a full financial audit. To that end, here is a quick guide on what financial audits entail, why they’re a must for your small business, and how to prepare for one.
Accounting vs. Auditing
To rookie entrepreneurs who are just getting a handle on their business finances, accounting and auditing may seem like the same thing: and the latter may even seem unnecessary. However, these processes actually serve different purposes.
While accounting is concerned with the regular record-keeping of a business’s financial transactions, auditing is a less frequent procedure meant to check if those records are indeed accurate and error-free. In addition, given that a financial auditor is typically an independent party, their services are invaluable for providing an unbiased look into a business’s finances and giving an entrepreneur a more objective appraisal of their company’s financial standing.
What are the Benefits of a Full Financial Audit?
To those who know the process better, getting a full financial audit yields multiple benefits for small businesses. One is that it helps spot any inconsistencies or errors made during the bookkeeping and accounting process. As mentioned above, identifying and correcting those mistakes are crucial for ensuring that an entrepreneur is basing their business decisions on accurate data.
Having an audited financial statement on hand can be helpful when dealing with various financial institutions, such as some business banking Philippines providers, just in case they happen to need exhaustive documentation about the business’s financial standing. If you’re exploring a banking solution like the Philippines’ Maya Business Deposit or financing through Maya Flexi Loan, it would be a good idea to complete a full financial audit of your SME first.
A financial audit can also be beneficial for cost-cutting measures, as the process will allow you to identify areas where you might be overspending and pinpoint expenses to be streamlined.
Lastly, having your business audited will make it easier for you to spot fraudulent activities from bad actors in your company. That means that you’ll also have better chances of neutralizing them quickly and, overall, improve the integrity of your financial processes.
In turn, this could elevate the reputation and credibility of your business: especially among potential investors, as they can be assured that you’re constantly on top of your finances.
Tips for Overseeing a Smooth Audit
Philippine businesses whose gross annual sales have reached or exceeded a sum of PHP 3 million are required by the Bureau of Internal Revenue (BIR) to submit an audited financial statement (AFS) every year. If your small business happens to meet that threshold, then you’ll need to work with a third-party auditor to conduct a financial audit on your business for full compliance with the country’s laws.
To make sure that the auditing process goes smoothly, have all the pertinent records prepared beforehand. Include your ledgers, financial statements, tax-related documents, and other accounting records. You can lessen the burden of collating all these documents by ensuring that your day-to-day record-keeping is transparent and organized, so that there won’t be a need for a last-minute scramble to locate what’s necessary. Continue Reading…
It’s been two years since Elon Musk acquired the former Twitter, now X. That led to a steady Xodus (sorry!) of hundreds of thousands or millions of formerly loyal users to new platforms like Mastodon and, the following summer, Facebook’s Threads.
Since last week’s shocking re-election of Donald Trump, another wave of X users has left for bluer pastures, this time for Bluesky, founded in part by former X co-creator Jack Dorsey, and some venture capitalists.
There is also a surge of Xpatriates moving to the decentralized Mastodon service. Mastodon creator Eugen Rochko posted Friday on Mastodon that it has benefited from the Xodus as well. Official “app downloads are up 47% on IOS and 17% on Android.” Sign-ups are up roughly 27% compared to the previous month, with 90,000 new accounts.
Thus far, though, Bluesky has drawn more media attention this week. Bluesky has been around since 2021 but had a slow start, beginning with an “invitation-only” approach to big names or those with massive followings. It is now wide open and free to all comers.
But the floodgates have really opened since last week’s election and Musk’s infiltration of the new Trump 2.0 administration. A million new users flocked to Bluesky in the last week alone, bringing the total user base to 15 million, according to Time. I am one of them, joining on Remembrance Day.
Truth to tell, (certainly not Truth Social!) I had NOT planned to join Bluesky, as I am already on Mastodon, Threads and — oh yeah — Linked In and Facebook. Since I have not yet left X, I felt 5 or 6 social media platforms was probably two or three too many. Even so, some contacts at X the past week suggested I try Bluesky as well, saying the new rush of sign-ups was reminiscent of the good old days of early Twitter.
So, somewhat reluctantly, I signed up, using the same handle as on most of my other accounts: @JonChevreau. I guess part of my reasoning was that when it comes to handles it’s a bit of a land grab and I didn’t want someone else posing as me at Bluesky. That appears to have happened to Mad Money’s Jim Cramer.
Now I’d be the first to say it’s ridiculous to be active on half a dozen social media accounts. It would be nearly impossible for someone with a full-time job and long commute but as I am semi-retired and work from home, it is (barely) manageable. Like most journalists, I’m a bit of a news junkie, though my focus is primarily financial (hence this website) and secondarily, politics (on the theory that politics is always going to impact our personal Financial Independence).
Social media splitting into Red and Blue Silos
Many journalists on X have been agonizing about staying there as standards have slipped under Musk and the site is rife with misinformation, most of it right of centre. In fact at Mastodon, we generally refer to X as “the Hell site.” I see broadcaster Don Lemon just announced his departure from X and arrival on Bluesky.
The problem is of course that many of us have spent the better part of 10 or 15 years building a large network of followers on X. In my case, I restrict most of my X posts to financial content, if only to promote the latest blog from this site. To the extent site sponsors like to see their guest blogs on the site promoted as much as possible on various social media, it’s hard to make the break. It takes years to build up a following in the tens of thousands.
But between Musk buying X and now joining the incoming Trump administration, the die seems to have been inevitably cast. Social media has fragmented into political siloes. X is now a Trump propaganda machine that amplifies what Trump’s own Truth Social was doing. It’s in effect Pravda for the incoming Republican White House. Call it the Red Silo. That was likely the main reason Lemon finally departed.
What you might call the “Resistance” is Threads, Bluesky and to a lesser extent Mastodon, which together I think of as the “Blue Silo.” But in addition to departures from X, I’m also seeing lots of Threads users moving this week to Bluesky: some abandoning it altogether and others opting to become “dual citizens.” One frustration I have myself with Threads is the current limit of following no more than 7500 people. Because of the still-common practice of “reciprocal following,” that policy also curtails Follower growth to a similar number.
Let me go through my evolving personal strategy for navigating these sites. I’ll list these in the order in which I tend to use them first thing in the morning and periodically throughout the day and often evening.
1.) Mastodon
This is my first port of call, even though my Follower account there after two years is less than 10% of what it is on X. Mastodon seems to me to be a bit of a Blue (i.e. U.S. Democrat) silo, as are the next two sites I’ll list: Threads and Bluesky. Presumably many liberal Canadians are sympathetic to that political orientation although things could change soon.
Why do I give Mastodon priority? For several reasons. First, it’s NOT owned by a single billionaire who can upset the apple cart and change the rules on some arbitrary whim. As I explained in a similar post to today’s when I joined Mastodon two years ago — Life After Twitter — unlike the centralized Twitter platform (or indeed Threads or Bluesky), Mastodon is decentralized.
That’s the first thing you need to know about it when signing on. First you have to pick a server, which is run by volunteers around the world. I often get pushback from people checking out alternatives who are under the impression Mastodon is too technical.
It’s not really: all these platforms behave in a similar way, albeit with subtle differences. The main stumbling block with Mastodon is picking the “instance,” which is another word for server. I picked one of the few (or only?) Canadian ones: mstdn.ca. It’s also called Mastodon Canada and bills itself as being run by Canadians for Canadians. Note too that Mastodon is spelt with the letter o in two places, NOT the letter “a”!
The other big reason I prefer Mastodon is that unlike the billionaire-owned centralized platforms, Mastodon does not use an “algorithm” to steer content in your direction. X, Threads and Bluesky all do this to some extent: either they explicitly ask you what kind of content you want or they gradually infer what you want from the content you appear to gravitate to. Down the road, the danger is they will monetize all this for advertisers or other purposes. When they’re free, remember that YOU are the product! Continue Reading…
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