In a recent article for Lehigh Valley Business, Marilee Falco and Cindy Joyce shared some small business advice that we often give to our clients who own their own companies. That is, it is often beneficial to use local banks for a small business’s banking needs.
How Local Banks Helped Small Businesses During COVID
Over this past year, during the COVID crisis, many bank lobbies have been shuttered, making neighborhood banking seem like a thing of the past. But for small business owners, this crisis has brought home just how important it can be to have a strong partnership with a local bank.
Thinking back to the beginning of the pandemic when communities were in lockdown, many small businesses needed to apply for Paycheck Protection Program (PPP) loans to cover payroll. Because of the complexity of the PPP loan applications, most banks worked with their existing business clients first. Early on, it was often those businesses with established relationships with local banks that received their emergency funds first.
Local Banks Have Same Security and Compliance Requirements as Larger Banks
Even in “normal times,” having a long-term working relationship with a local bank can be beneficial to a small business. Local banks have the same security and compliance requirements as larger mega-banks, but one particular benefit of smaller local or regional banks is that they have more latitude than larger banks when it comes to waiving fees or granting a more desirable interest rate.
If a small business owner needs something outside of the ordinary, she may not have to jump through as many hoops with a local bank. If, for example, the company needs something like a medallion signature, banks may only be willing to work with established clients they know well.
The Personal Touch of a Local Bank for a Small Business
With a local bank, you are likely to receive more personalized service than you would receive with a national bank. We have noticed that there is often less turnover and employee rotation between the branches of local banks as opposed to national ones. If a business owner has a banking question, when she calls her local bank, she will speak to a person in her area and not a call center as may happen with national banks. And if there is unusual activity in a business account, a local banker will often pick up the phone and call a business owner rather than wait for the automated system to kick in.
Over time, small business owners may realize another unintended and unexpected benefit of working with a local bank. Your local banker may become a good source for business development. Because they build business for their bank through networking, and because they come to know your business well, they may very well become a good referral source for your company.
A final benefit of working with a local bank? By doing so, you are supporting your local community’s economy – and not that of a national bank with headquarters elsewhere.
Yes, there are certain advantages to working with larger, national banks. Among them, bigger banks often have more comprehensive online services, for example, which can simplify and expedite transactions for businesses.
Finding a Local Bank for Your Small Business
If your small business is in the market for a local bank, the Independent Community Bank Association (ICBA) can help you compare options in your area. In addition, the FDIC’s BankFind tool provides information about all FDIC-insured banks and their locations, including current and historical data.
Of course, every business wants their banker to collaborate well with other professional advisors, such as attorneys, accountants, and strategists. It may be advisable to contact other small business owners to inquire about their experience working with local banks.
Whether you choose to bank with a local, regional or national bank, it’s always a good idea to take the time to develop and maintain a close relationship with your business’s banker.
If you would like more small business advice, we at Agili would be happy to help.
Michael Joyce sat down with Rachel DePompa of NBC12 to discuss funeral expenses and funeral planning. It may be a morbid subject, but for the sake of your family, it’s important to think about planning for funeral costs. It’s thoughtful to provide your loved ones a road map for when you are not around.
Family Members Are Vulnerable After a Death
Soon after a death, people are vulnerable and can easily be talked into expensive options. And funeral and burial costs are typically costly.
Write a Letter of Instruction about Funeral Plans and Funeral Expenses
Michael says one of the things he often tells clients to do is to write up a letter of instruction to be kept with some of your estate documents: “Because you can put anything you want in these letters of instruction. And this could be one of the pieces of it: how you would want things done.”
Begin Financial Planning for Funeral Expenses Early
Michael says that you would be well advised to begin funeral planning early, before becoming terminally ill or elderly. Taking steps like this could make it easier for the family left behind, even if you have decades or a half a century left to live.
Save for Retirement While Paying Off Student Loans
In a conversation with Rachel DePompa of NBC12, Michael Joyce reminds us that it’s important to save for retirement while paying off student loans. No matter how hard it is, it’s important to not ignore one at the expense of the other. You have to look at how much you are going to pay on the student loan over the minimum amount versus how much you are going to put into a retirement account.
Retirement Savings Compounds and Taxes Are Postponed
“In a retirement account what’s always important to remember is not only are the funds in there not taxed until well into the future, but that money grows. It compounds without a tax drag,” said Joyce.
Save Up to Your Company’s 401(k) Match
Michael adds you shouldn’t leave money on the table. For example, if your company offers a 401(k) match, try your best to save up to that match amount. But even if you are setting aside just one or two percent of your take-home pay in a retirement account, do it. Every little bit helps.
A financial planner may also be able to help you make a plan to save for retirement while paying off student loans. Our team of experts at Agili would be happy to help.
Don’t believe investment hype! In a conversation with NBC12, Michael Joyce says that young investors risk losing a lot of money if they don’t understand the fundamentals behind an investment. The GameStop phenomenon is one such example.
The Stock Market is Not a Game
If you are new to investing and watching the stock market or your kids are, Michael says there’s one big thing to remember — the stock market is not a game.
Understanding Investment Fundamentals
Michael says inexperienced investors can lose a lot of money getting caught up in the hype surrounding a new investment trend. He says there’s a difference between investing and speculation or gambling. Investing is not a get-rich-quick scheme.
Michael says it’s critical think about why you want to invest in a business. What are the fundamentals for investing in this company? You don’t want to invest in something because of what you read on a Reddit board.
Be Measured and Careful When Investing
Michael also reminds investors that they shouldn’t buy something just because it moved up or sell something just because it’s gone down and you think it’s going to go lower. He says you want to be measured and careful.
Hire an Investment Advisor
He also says a financial advisor or an expert can teach you the ins and outs of investing. You don’t want to just wing it.
In this article for Business 2 Community, Cindy Joyce shares her insights on personal finances for young adults — how they can move on from the economic fallout of the pandemic and plan for a secure financial future.
This past year demonstrated the importance of planning ahead and doing whatever you can to be financially prudent. Having savings to fall back on can make all the difference during tough times. The good news for young adults is that they’ve got time on their side.
Cindy shared these four financial management lessons:
Make Sure You Are Financially Literate
A 2019 USA Today story reported that only 57 percent of adults in the U.S. are considered financially literate. Other studies have shown that only about half of college-educated young adults between 25-34 years of age correctly answered questions to test basic financial literacy. These findings highlight the lack of financial planning education taught during school years.
Young professionals should educate themselves to ensure at least a surface-level understanding of common financial issues, such as budgeting, interest rates, loans, taxes, financial priorities, and debt. Financial advisors and others can help, but you need to have that foundational knowledge.
Start Saving Early and Don’t Stop
Compound interest is incredibly powerful and young professionals are in the best position to use it to attain their financial goals.
We recommend saving a little bit from your very first paycheck and continuing to add to that account. Add a little more every time you get a bonus or raise and keep that savings or retirement account locked. Don’t touch it and watch your money grow.
How do you know if you’re saving the right amount? A good rule of thumb is to save until it hurts just a little (i.e., skip eating out one night per week). The earlier you start saving, the more power compound interest will have and the less you’ll need to save later in life.
As you consider how much to save, think about your goals and risk tolerance. A generic savings account at a bank is a start but won’t do the trick for high returns. Research low-cost accounts with higher yields, such as money market accounts.
A final note on savings. If you get a surprise cash influx – stimulus check, tax refund, bonus, etc. – treat yourself with a small portion and put the vast majority into savings. You’ll want that on hand in case there’s ever a financial emergency. A good rule of thumb is to have two savings accounts. One account should be an emergency fund with six-to-eight months’ worth of regular expenses and the second account should be used to save for your future retirement or bigger expenses, such as your first house.
Begin Retirement Planning Now
Saving is important so you have a cushion as you age and so you’re set for retirement. For young professionals, retirement is decades away, but if you want a lifestyle you can truly enjoy when you retire, you need to start working at it now.
Here’s an easy strategy that young professionals can implement early in their career (although it’s really applicable to anyone at any stage): Max out your 401(k) savings option through your employer. This money will be automatically deducted from your paycheck and placed in your 401(k). It’s like you never had the money in your pocket to begin with, so you won’t miss it (but you will appreciate it later in life). This move helps you maximize your company match as well, resulting in even more money directed to your retirement account. Similar to other types of saving, the earlier you start the less work you have to do in the end.
Look Ahead: More Financial Planning for Your Future
Looking ahead is more than just planning for retirement. Retirement planning is certainly crucial for all young professionals, but you shouldn’t stop there. Some other common financial planning considerations to keep in mind include:
- Life Insurance: It’s cheaper and easier to get when you’re younger.
- Long Term Disability Insurance: Same as life insurance, easier to qualify for and less expensive the younger you are. Fun fact: More people need disability insurance than need life insurance.
- Tax Planning: Review withholdings annually so you don’t overpay. Getting a refund check is essentially giving the U.S. government an interest-free loan.
- Employee Benefits: Take advantage of programs, insurance policies, and incentives your employer offers because it’s usually cheaper (or free) when packaged through your company.
The right preparation and planning can put young professionals on a financial path that will reward them for decades to come. It just takes getting started.
For some back-to-basics financial planning education, please see our blog post, Three Components of Personal Financial Planning.
Michael Joyce sat down with Rachel DePompa at NBC12 to discuss developing a freelance retirement plan. There are plenty of ways freelancers can save.
Freelance Retirement Plan Vehicles
Michael shared that if you don’t work for a company that offers a 401(k), retirement savings tools such as a Simple IRA, Solo 401(k) or Individual 401(k) are great vehicles for building up retirement savings.
Financial Planning and Discipline Are Key
The key to successful retirement savings for freelancers is planning. You need to be disciplined and prioritize goals. And you must make sure money is automatically moving into this account every few weeks.
Save Until It Hurts
Michael reiterated that we should contribute to retirement accounts until it hurts — until you feel the pinch. You can always pull back how much money you contribute. But, of course, the more you save, the more it grows over the years.
For some back-to-basics financial planning advice, please check out our blog post, Three Components of Personal Financial Planning.
For information about Agili, our ethics, our investment philosophy and how much we care for our clients, please check out this video and blog post, About Agili: Get to Know Your Personal CFO.
Michael Joyce spoke with Rachel DePompa of NBC12 about the when and why of hiring a financial advisor.
You Don’t Need A Lot of Money to Hire a Financial Advisor
A lot of people have the misconception that you need a lot of money to have a financial advisor, but Michael says that’s just not true. He says to think about it like this: “You hire a painter, right? They can do something better than you can, and they can do it at a reasonable cost.”
Benefits of Hiring a Financial Advisor
Financial advisors can help with strategizing how to pay off student debt or how to save for that first home. They can also help determine how much insurance you need. They make recommendations for getting estate documents in order. And they help you know how much you need to save for college.
Financial Advisors Help with Decision-Making
Resources to Help Find the Right Financial Advisor for You
Michael says you don’t need to have somebody that’s going to be charging a lot of money either. Some financial advisors charge an hourly rate. There are also financial advisors who work for commission or charge a flat fee.
If you’re looking for some basics in financial planning, we recommend reading our blog post, Three Components of Financial Planning.
If you’d like to know more about Agili and how we act as our clients’ Personal CFO (our ethics, our investment philosophy and how much we care for our clients), we invite you to view our video included in this blog post, About Agili: Get to Know Your Personal CFO.
Michael Joyce, CFA, CFP® recently contributed an article to Lehigh Valley Business about how many business owners spend so much of their time building their company that they neglect their own personal financial health. But it’s possible to balance personal and business financial goals; they do not need to be mutually exclusive. Two areas where business owners should be focused are developing a strong overall financial plan and anticipating regulatory developments that might impact a company and personal wealth-building. The following tips will help guide wiser financial decisions and protect both business and personal goals.
For Personal Wealth-Building, Diversify Away from the Business
Probably the most important way a business owner can protect their future financial security is to avoid having all of their financial eggs in one basket, diversifying their investments beyond the business they own. While their investment in the company may well be the one investment that generates the highest return over their lifetime, the company will have greater inherent risk, particularly “single enterprise” risk. To protect against having one’s entire financial future riding on their company, a business owner should develop a diversified investment portfolio.
Protect the Personal Financial Bottom Line with Business Insurance
Another way to ensure a business’s financial well-being (and, therefore, that of the business owner personally) is to guard against potential damage to the company by having adequate business insurance coverage. No one wants to see their hard-earned success threatened by a natural disaster or lawsuit. Three types of business insurance to consider are general liability insurance, business income insurance and commercial property insurance. Also, key person insurance is recommended if the death of a key employee would threaten the company’s financial viability.
Offering A Qualified Retirement Savings Plan Helps Both Employees and Business Owners
Another way for business owners to ensure their own financial well-being is to offer a qualified retirement savings plan to employees and to fully fund the plan on an annual basis, whether it is a 401(k) Profit Sharing Plan, SEP or SIMPLE. For newly established or cyclical companies, SEPs (Simplified Employee Pension Plans) are an attractive option since employer contributions can vary from year to year, as long as each employee receives the same amount. Offering a SIMPLE IRA gives the employer contribution options – they can either match employee contributions or contribute a fixed percentage of salary each year. Also, from an administrative standpoint, the SIMPLE IRA is indeed simple since there are no filing requirements for the employer with the IRS; rather, the investment firm handles the filing.
Understand Public Policy Affecting the Business for Professional and Personal Financial Success
For the future financial security of a company and its owner, it is critical to keep an eye on public policies that impact small businesses. Currently, with a new administration at the helm, there are many regulatory and tax-related developments that will affect businesses both positively and negatively.
Small businesses with government contracts will benefit from President Biden’s recent signing of an executive order closing the loopholes in The Buy American Act — requiring that companies accepting federal contracts must be based fully in the U.S. and prohibiting them from sourcing materials internationally. Since the Federal government purchases close to $600 billion in goods and services annually, this is good for American businesses.
In another executive order, Biden highlighted a commitment to build a “modern and sustainable infrastructure” and to deliver an “equitable clean energy future,” so businesses in the clean energy, sustainability, and transportation sectors will see growth opportunities. A new infrastructure bill will be introduced in the very near future — and while the terms are still to be negotiated, transportation and large construction firms can expect to profit.
An executive order that will negatively impact certain energy and construction businesses is the revocation of the permit to construct the Keystone XL oil pipeline. Without the pipeline, it is likely that businesses’ energy costs will be higher. And estimates as to the number of jobs that will be lost as a result of the cancellation of the pipeline construction range from 4,000 to 11,000 two-year positions.
At this time, tax policy as it relates to small business is more of an unknown. While the Biden administration is unlikely to crater the recovering economy with higher taxes in 2021, it all may come down to the mid-term elections in 2022. Some of the new infrastructure plans will require more Federal dollars — so future tax hikes are likely.
Of course, it is understandable that business owners focus predominantly on growing their companies — but to guard against neglecting the bigger financial picture, working with a trusted financial advisor can help. Responsible planning, diversification, and knowledge of future policy and regulatory developments can contribute to the financial success of a business and its owner over time.
How You Track Spending Is Not As Important As Doing It!
If a fancy app is not for you, a pen or paper is just as good to get your finances organized. In this story for NBC12, Old School Budgeting with a Pen and Paper Is Still a Good Way to Go, Michael Joyce says he still budgets the old school way. “You can certainly use technology to keep track of a budget. But really you can do it any way that is comfortable for you. You can be old school by writing it down. You can use excel spreadsheets,“ Joyce adds.
Budgets Are Fluid: Don’t Overcomplicate Things
Michael says you don’t have to have every nickel and dime written down either. It can be fluid. Budgets are constantly changing as people get raises, bonuses or new better-paying jobs. Just get in the habit of watching your finances each month so you know where your money is going. It’s just important to have a budget written down and accessible to you, so you’re not just remembering numbers off the top of your head.
For more information on budgeting, see our video Best Financial Advice: Why Budgets Matter. For some “back to basics” personal finance education, check out our blog post Three Components of Personal Financial Planning. Additional Agili blog posts and news items can be found on the Insights page of our website.
Recently, Rachel DePompa of NBC12 sat down with Michael Joyce to discuss post-pandemic personal finance planning and behaviors.
Money Management Tips after Covid
Michael shares money management tips, warning consumers to not splurge and forget all the great habits picked up during the pandemic. When the pandemic ends, there’s naturally going to be some pent-up demand to buy things and spend some money, but Michael says don’t get carried away. “What I would advocate is that people take some of the habits that they’ve [developed] from the pandemic and apply them to 2021 and the new year,” Joyce said.
Tips for Saving Money
Michael’s financial tips include not “going crazy” by going to every restaurant and flying to expensive vacation destinations. Rather, he suggests being measured in spending and continuing to put money into savings and retirement accounts. He says budgeting and paying yourself first should be your number one habit of 2021. Also, keep that emergency fund funded! We all learned last year how quickly things can change.
More Financial Tips
For more information on budgeting, please see Agili’s Why Budgets Matter video included in this blog post. And, if you’ve ever asked yourself, “Do I need a financial advisor?” we’d love to hear from you. Please contact us anytime.
Consider All Financial Ramifications Before Signing Finalized Divorce Decree
“I can’t stress enough that it is important to think about all the tax implications, maybe get some professional assistance before the divorce decree is signed,” Joyce said.
Michael adds that it’s more than just a matter of splitting assets. You could get hit with surprise taxes or fees you didn’t think about.
For instance, you may need help splitting a 401(k) equitably so as not to trigger a penalty for early distribution.
Hiring a Financial Advisor Can Help During Divorce Proceedings
While attorneys help with the legal side of things, a financial advisor could be a huge help to protect your assets through divorce proceedings.
What Are Beneficiary Designations?
When initially completing paperwork for investment accounts like IRAs, qualified plans through work, or life insurance policies, you are asked to provide the names of your beneficiaries. By completing beneficiary designations, you enable a spouse, child or even a charity to receive your assets when you pass away. The designation allows you to avoid probate and send the asset directly to the individual.
Review Beneficiary Designations Annually
While we may not want to think about it, it’s important to direct where our money goes after our death. We recommend reviewing and updating beneficiary designations annually. And December is a good month to review them, just before the new year.
It’s easy to overlook updating beneficiary designations – it’s even happened to Michael Joyce himself. He shared the following with Rachel DePompa, “A couple of years ago, when my youngest son was about 12 or 13 and I was reviewing the beneficiary designations on one of my Roth IRAs, I realized that he was not listed as a contingent beneficiary,” said Joyce.
Joyce says you can name a percentage of your assets for multiple people as long as it adds up to 100 percent. To name a person as a beneficiary, you need their full name and date of birth. Some institutions require a social security number.
Life Events that Should Trigger a Review
Other life events that should trigger a review of your beneficiary designations are marriage, divorce, having a child or the death of a loved one.
Since the onset of the coronavirus pandemic, businesses have observed that care and creative thinking can help them forge stronger connections with customers (McKinsey & Company). In this fourth installment in a five-part series for Business 2 Community about the ongoing evolution of offices and what businesses can do to adapt and succeed, Cindy Joyce shares three lessons that are particularly important and revolve around communication and bolstering relationships, even if from afar. She shares the following advice:
Communication with Financial Advisory Clients is Key
As with so much, communication is crucial. Many organizations focused a great deal of energy and effort on enhanced communications as the pandemic first emerged and spread in the beginning of the year. Don’t let up on those initiatives now. If the frequency and substance of your communication has decreased in recent months, consider reengaging with customers at the end of the year. It’s a natural time to share updates about your business and your plans in 2021. It’s also a nice time to check in and say hello.
The holidays offer a chance to reconnect and reestablish consistent communications. Customers, particularly older clients, are continuing to stay at home and many will not see their family for the holidays. This isolation could be a welcome opportunity for a call to wish them happy holidays and check in.
When communicating with clients, it’s important not to make many assumptions either. To ensure you’re reaching them where and when they want, don’t forget to ask about their comfort level with video calls. They may have been excited about Zoom in April, but a phone call is preferable now (or vice versa).
As we all look ahead to more months of social distancing, consistent communication will remain vital. Ultimately, the best advice is to “Communicate, communicate, communicate.”
Make Digital or Distanced Connections with Financial Advisory Clients Work
Remote meetings have become standard in 2020 and that’s unlikely to change even after vaccines are approved and distributed. These remote meetings and video calls often require extra preparation, for good reason. When meeting with a client or customer remotely, consider their perspective. It can be more difficult to stay engaged and focused. Therefore, you should take it on yourself to proactively anticipate and mitigate those challenges. How?
Practice the meeting in advance so you’re fully prepared and don’t have to reference your notes too frequently. Looking down at notes creates a break in the engagement and can be hard to recover. Also, consider shorter meetings to reduce Zoom fatigue and maximize focus for the time you have.
If you have customers who are comfortable with socially distanced meetings in person, get creative. Instead of sitting far apart at a large conference table, perhaps you can meet outdoors (weather permitting). Another option is to cover as much material via email in advance so the in-person meeting provides time to focus on the most pressing issues and gives you an opportunity to strengthen your personal relationship.
Don’t Forget the Personal Touch with Financial Advisory Clients
An important business lesson that’s been true for generations should not be forgotten during the pandemic. That lesson is that relationships matter. Even if we’re not together as often as we’ve been in the past, people like to work with people they like.
Professionals would be wise to remember the value of the personal touch, especially during challenging times. For example, send emails to clients and customers with interesting or funny news stories. Think about what they might like and engage with. As a financial planning firm, we help clients better understand and manage their money. With so many kids still learning from home, our team thought it would be fun and helpful to launch a personal finance game for kids. Clients loved it! They recognized the value in the game and our team’s desire to support them in unexpected ways. How can you connect with and help your clients in a manner that will surprise and delight them?
Sometimes that personal touch is as simple as understanding what they like. When talking with customers, ask them what books they’re reading or what they’re watching. Do they have a favorite sports team? When you see something that would connect with them, share it.
We’re all looking for new books to read, podcasts to listen to, and shows to watch. Don’t be afraid to share some of your personality with clients and customers. Consider a blog post or email with highlights of what you’re reading and watching. You may find a common interest with a client. At the very least, you’re reinforcing a personal connection.
Finally, if budgets allow, send a small gift to customers and clients. This gesture is a great way to keep them engaged and let them know you are thinking of them.
Michael Joyce recently sat down with Virginia Business to share his views on how the coronavirus pandemic affected Agili’s investment strategy, how election results affect portfolios and what to do now money-wise. Please click on the link above for his economic and investment analysis.
Early on, Diversification Mitigated Damage to Financial Portfolios
In this feature, Michael Joyce, says diversification “mitigated the damage to [client] portfolios in those [first] six weeks,” of economic shutdowns caused by the pandemic. He adds that while the firm “saw opportunities almost everywhere we looked” due to low stock prices, investors should primarily maintain a wide range of asset types.
“This is not an environment to run scared from,” Joyce adds. “I also don’t think it’s an environment in which we can just throw money at the market.”
Joyce also cautions against purely following trends that “turn around quickly” in today’s market.
Presidential Elections Have Little Impact on Financial Portfolios
Michael states that investors should not put too much stock in presidential election outcomes when managing stocks and other assets.
“Every presidential election year we get contacts that say, ‘If a Democrat wins, I want to divest everything,’ or, ‘If a Republican wins, I want to divest everything,’” Joyce says. “In almost all cases, it doesn’t make a big difference [for the markets] who gets elected.”
What Moves Should Investors Make Now?
Michael adds that there are a couple of money moves investors can make during downturns that are beneficial in the long term, such as converting a portion of an IRA into a Roth IRA — the benefit being that investors can withdraw funds tax-free during retirement because income tax is paid up front on investments. Investors would save money on Roth conversions during a down market because they would pay taxes on a smaller investment portfolio.
Michael’s concludes his comments saying, “Overall, preparing for the future by balancing aggressive asset acquisition with cautious diversification is the best way to weather a down economy.”
Michael Joyce recently shared with Rachel DePompa of NBC12 his suggestions for financial planning when starting a family.
Starting and raising a family is more expensive than ever these days. So, while may be fun to figure out a nursery and buy new baby gadgets — there are some financial steps you should really take when you learn you’re expecting and right after the baby arrives.
Budget for Baby
Michael says to begin with a financial plan. He says, “Start budgeting early for all the things you will likely buy once baby arrives.”
Update Beneficiary Designations
In addition, Michael says to “Update your beneficiaries on all your accounts and your will in case something ever happens to you.”
Start Saving Immediately for College
And finally, he suggests starting a college fund as soon as your child is born. “We started saving for my sons when they were 30 days old. I mean, as soon as we got a social security number for them we start saving at least a little bit every month,” said Joyce.
Experts say if you set aside $25 a month– to start. That will add up over the 18 years. And if you have a 529 account, the money you add will accrue interest.
Financial Implications Are Long-Lasting
Michael says, “Don’t just think about the baby clothes and diapers when you start to plan for a family. Consider the financial implications that will last 18 years or longer.”
For more information about starting a 529 college savings account for your child, contact Virginia529 or PA529. And, of course, you can reach out to your financial strategist any time to discuss education planning.
Michael Joyce sat down with Rachel DePompa of NBC12 to discuss improving and negotiating credit card terms. Most people don’t realize this, but you can approach your credit card company and negotiate or even request new terms such as a higher or lower credit card limit, a lower payment and especially lower interest rates. The ongoing pandemic even gives you extra leverage.
Credit Card Companies Want to Negotiate with You
Companies are listening right now. If you’re worried about falling behind on a payment, they might be more willing to reduce that interest rate. Michael says, ”It’s in the credit card issuer or the bank’s best interest to have you pay something, to have you pay the minimum amount. In fact, they’d like you to pay the minimum amount and not pay off the whole balance.”
Michael suggests looking at other deals, knowing your options and what you can ask for. The credit card companies want to keep your business.
Credit Card Companies Know You Could Transfer a Balance
Rachel DePompa adds, “If you’ve always paid on-time, credit card companies are likely to reward you and give you a break to keep your business because, at the end of the day, a lot of people can transfer a balance to a different card. Also, remember kindness when you ask goes a long way.”
For information about how the timing and amount of your credit card payments can impact your credit score, see Financial Planning Analyst Jennifer Pieson’s informative blog post, Credit Card Smarts – Micropayments.
Agili’s Davis Barry and Marilee Falco recently wrote an article for Lehigh Valley Business and Central Penn Business Journal, with strategic recommendations for business owners deciding whether or not to sell. Business owners and executives considering the sale of a company have important decisions to make at three different phases: Before Negotiations (the swim), Purchase and Sale (the bike race), and Closing and After (the run).
Before Negotiations on the Sale of a Business (the Swim)
Prior to negotiating the sale of a business, an owner must honestly evaluate their company’s salability and the timing of the sale. Is the business on trend in its industry and is there a likely buyer, or better yet, buyers? How motivated would potential buyers be to purchase the business? Are there direct comparables for the business’s valuation process?
Purchase and Sale of A Business (the Bike Race)
What issues should a business owner be prepared to discuss during negotiations for the sale? First and foremost, the owner must have a thorough understanding of his business’s value (i.e., cash flow, growth, margins, assets, liabilities, and intellectual property). The owner should have a firm grasp on the business’s exposure to past (and possibly future) liabilities. In addition, when the seller owns the business property, they should know in advance if it makes good fiscal sense to retain the real estate and lease it back to the purchaser and if that might be an appealing prospect to them.
After Closing on the Sale of the Business (the Run)
Once the business sale has closed, it’s important for the seller to think holistically about their financial future, both professionally and personally. First, the seller needs to determine whether or not they need a new source of income, be it a new job or an investment. And how should they reinvest the proceeds from the sale? Because of the tax savings associated with them, Qualified Opportunity Zones may be a worthwhile investment.
Other more personal planning considerations are health, life and disability insurance — adjustments will likely need to be made. Also, it would be wise to have an estate attorney review and update estate documents upon the sale of the business.
Since business owners often spend years reinvesting company proceeds back into their business, they may need to play catch up on retirement savings. To best take advantage of this windfall, it is important to work with a trusted financial advisor to appropriately invest in a customized and diversified portfolio that aligns with the seller’s long-term goals and objectives. Down the road, cash flow strategy (tax optimization) and possible Roth conversions should be considered each year.
For the business owner, it can be hard to view their company objectively and navigate emotions surrounding the sale of the company they have worked for years to build. Business owners don’t have to do it alone. They would be wise to rely on experienced and trusted advisors, such as a business coach, financial advisor, accountant, and investment banker, among others. By enlisting an expert team, a business owner can be confident that they’ll receive objective, fact-based financial planning and investment recommendations throughout the different phases of the negotiation and sale.
Contact us at Agili to help ease the burden of the negotiation, sale, and closing of your business. Our financial experts with years of experience in wealth and financial advising can help you look at your business objectively and help you make an informed decision.
When 2020 began, not many business owners or executives were likely planning to redesign or significantly update their office policies and employee handbooks. In her article for Business 2 Communities, Cindy Joyce discusses how office policies, manuals and handbooks must be updated due to new work practices brought on by the coronavirus pandemic.
Work from Home Policies
A Gallup poll in April 2020 found that over 60 percent of Americans were working from home. Many months later, a lot of those employees are still home. Immediate pivots rightly focused on technological needs to support remote work and new standards for when it would be safe to reopen shared office spaces. Yet, as the pandemic continues to drag on, it’s crucial for business leaders to take a closer look at existing office and work policies.
Mask-Wearing and Social Distancing Policies
Whether working from home or in the office, policies governing how and where people work need to change. For example, I’m not aware of any organizations that had established policies for masks and social distancing at their office at the beginning of the year. Likewise, remote work presents potential issues for businesses. The Society for Human Resource Management released a survey of its members this spring that found that 71 percent of employers noted that adapting to remote work has been a challenge. A key component to that struggle is how to revise company policies to meet this new reality.
Successful businesses are constantly evolving in order to grow. Such adaptation is required during the pandemic as well. As your business adjusts, so too should your company policies and handbooks. With clear guidelines, employees will feel empowered and businesses will be better positioned to survive and thrive.
Cindy Joyce writes about being flexible and adaptable with office space during the pandemic in this article for Business 2 Community.
Challenges stemming from the COVID-19 pandemic have accelerated a number of changes that were already taking place in how and where businesses work. This article is the second in a five-part series about the ongoing evolution of offices and what businesses can do to adapt and succeed. The uncertainty unleashed this year has been harrowing for many businesses, but there are opportunities to grow amidst all the disruption. The first part of the series focused on employee communication and now we turn our attention to office space.
Encourage Creativity and Collaboration
Creating dynamic office spaces can spur innovation and creativity. You don’t have to sacrifice these benefits during the pandemic. In fact, adapting to new realities offers an opportunity to rethink your company’s work environment. Open and airy spaces, including larger conference rooms and teamwork areas, that allow groups to collaborate at safe distances can align with your company’s brand and values, as it did with Agili’s Richmond, VA, space. The key takeaway is that office spaces can still work in our COVID-dominated world.
Shrewd business owners and executives will recognize the current opportunities to rethink their office spaces during the pandemic. If you’re in a position to consider changing or growing your office, it’s truly an ideal time to strike. Decisive action now can help put your company in a stronger position through the remainder of the pandemic and beyond.
Everywhere you turn, people are looking at refinancing. Let’s face it, the rates are so low — it’s tempting. But is it really the best idea for you?
What Matters Is the Interest That Will Be Paid Over the Course of the Loan!
Refinancing may not always be the best idea, according to Michael Joyce in this story for Richmond’s NBC 12. Michael tells homeowners they shouldn’t refinance unless the interest they will pay over the course of a new mortgage loan will be less than what they are currently scheduled to pay.
Michael Joyce says mortgage rates are the lowest he’s seen in his entire career. But he says — you don’t want to get hung up on the low rate. Instead, you want to look at how much interest you’ll be paying.
“The way mortgages amortize you pay the most interest on the first payment and then the amount of interest that gets paid with each payment goes down the further you are into the mortgage. You could have a case that you’re 8, 9 or 10 years into a mortgage with a higher rate but if you refinance at a lower rate you could end up paying higher interest,” Joyce says.
So, it’s important to factor this in before you get seduced by the low rates out there. You don’t want to just assume refinancing is the best option without first doing a little research and some basic math.