The Importance of An Asset Protection Plan

The Importance of An Asset Protection Plan

A well-outlined asset protection plan is a powerful deterrent against lawsuits.  Asset protection planning involves a comprehensive and integrated estate planning strategy that includes short- and long-term financial objectives. When planning, your focus should be to devise a plan that addresses and supports both your professional and personal goals.  Unfortunately, we live in a society where creditors and individuals can be predatory against people with substantial assets, and knowing that the average person never wants to go to court often force people to settle frivolous lawsuits as their game of choice.

Asset protection plans differ depending on the kinds of assets owned. High-risk assets include tools, business equipment, rental properties, and vehicles.  Safe assets include stocks, bonds, and bank accounts.

If you own a business, your primary objective is to separate personal assets from your business assets to prevent any parties from going after your assets. Corporations like LLCs, S, and C Corps are going to be some of the traditional ways to initiate that protection whereas sole proprietorship, DBA, or general partnership offer limited or no protection against these types of predators.  Trust and offshore accounts also limit the risk of exposing your assets.

Asset protection is priority 1 for those individuals who want to secure themselves from lawsuits however there is no single way to protect your assets as everyone’s needs adherently differ. A qualified asset protection professional will analyze your personal and professional risks, exposure, and possessions along with your goals for you, your beneficiaries, and business so your asset protection plan is specifically catered to your needs.

 

To discuss your financial planning objectives I am available upon request and can be reached at my website JeffreyLevine.Solutions for inquiries and appointments.

What Is A Balance Sheet

What Is A Balance Sheet

A balance sheet is a document that businesses can use to summarize their company’s financials which investors can then use to determine the value of a company. The sheet details a company’s assets and liabilities, along with the value of its stock. A balance sheet is also used in conjunction with other financial documents, like an income statement or a cash flow statement. Combining the insights of all three of these documents can help you determine whether your company is growing financially or experiencing a deficit.

A company releases its balance sheet to show its assets, liabilities, shareholder equity, as its financial information on a monthly or annual basis reflecting past, present, and future operations. Potential investors rely on the accuracy of these documents to consider if your company is viable to divest their funds.  Balance sheets reflect at any given time how many assets the company owns, how much liability the company owes, and how much shareholder equity is available once liabilities are deducted from assets.

Assets include cash, investments, other tangible assets like intellectual property and are classified under current assets and tangible assets. Current assets include anything that can be converted into cash within one year, may involve cash, stocks, bonds, prepaid expenses, or physical inventory.  Long term or fixed assets are utilized long term by the entity and may include property, buildings, furniture, vehicles, equipment, and machinery.

Liabilities reflect money that the company owes including taxes, loans, salaries, utilities, rent, or supplies. Liabilities are itemized as current liabilities and long-term liabilities on a balance sheet.  Again, current liabilities include short term debts like accounts or notes payable.  Long -Term liabilities reflects outstanding debts that are stretched out for periods longer than one year and can include amortization of bonds payable employee pensions, and other deferred compensations.

Shareholder equity simply reflects a clear picture of the company’s net income, net worth, and overall valuation. Positive shareholder equity numbers mean your company is retaining its earnings and will have something to offer an investor or equity partner in the form of returns.

A balance sheet can also be used to measure working capital, debt to equity, and liquidity ratios determining that the company has enough in cash and cash equivalents to pay its obligations and cover its operations.

If you are looking to get your company’s balance sheets in order, I am available to discuss your needs.  Schedule an appointment at JeffreyLevine.Solutions today and follow me on Instagram @wealthbuilder_solutions.

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Business Recordkeeping Tips

Business Recordkeeping Tips

Good recordkeeping may be the most important task you can do to prevent you from incurring tax issues on your business. Records allow you to prove that you are eligible and entitled to listed deductions and expenses.  There is no way to avoid proper recordkeeping

Canceled checks, daily receipts, and petty cash transactions make up the contents of a well-organized accounting ledger that has chronological journal entries and reflects every business-related transaction. Each original document should be saved to a hard drive to prevent confusion allowing for complete transparency. All the financial statements issued by any online bank should be printed and filed as original reference documents, as well as all employee payroll expenses.

Financial records should be kept for no less than 4 years and employee records for no less than 7 years. If any property is involved, keep all records even after you sell the property as often times there can be post-sale occurrences that render a property owner to reference related documents.

If you have not already been keeping accurate records, start today.  The IRS and your state demand that any business pays their fair share of taxes, however business owners are entitled to certain deductions and refunds so correct and accurate records are essential to claim the benefits you are owed.

If you think you need assistance organizing your books I am happy to provide a 20-minute free consultation to discuss your recordkeeping financial planning, wealth management, and exit strategy requirements.

Schedule your consultation at JeffreyLevine.Solutions and follow me on Instagram @Wealthbuilder_solutions for more insights and motivational mantras related to wealth-building strategies.

What Is Net Worth

What Is Net Worth

To calculate your net worth, add up all of the assets you own and subtract all of the liabilities or debts you owe. Net worth includes tangible assets such as your home and cars, investments, and money you have in savings, as well as certain other items of value.

Are assets net worth?

Assets are possessions that could be sold or converted into cash easily. The valuation of assets should be realistic in order to reach precise net worth estimates.

How much should my net worth be?

There is no way to answer that, but the bottom line is that your net worth should increase over time.  As your assets increases and your decrease debts, net worth should increase consistently.

Are income and net worth the same?

Income is all the taxable income and wages earned from working and is most often the primary source of wealth creation but not equal to income. Generating income does not always lead to wealth creation so it is not the main determinant of net worth. Wealth is the net worth of a household versus income which is what is reported on a tax return.

Building net worth is not about how money income you make, or about how much money you spend, but how much you can keep.

To learn more about ways to increase your net worth set an appointment over at JeffreyLevine.Solutions, follow me on Instagram @wealthbuilder_solutions, or on Facebook @J L Wealth Solutions page to get more insights and tidbits related to building your financial knowledge.

Great Ways To Reduce Your Business Tax Liability

Great Ways To Reduce Your Business Tax Liability

From business expenditures to careful reserves, there are a diversity of approaches that business owners can utilize to reduce the share of their business income that can be taxed.

Four major factors a business should consider are:

Are we making smart purchases and investments?

Do we know which deductions we can legally make?

How do we avoid an audit?

How can we reduce our tax exposure?

Do our charitable contributions count?

Are we eligible for Federal Tax Credits?

To ensure that you are calculating your business taxes correctly, work with a tax preparation specialist or certified accountant throughout the year. A qualified advisor can outline the laws and regulations relevant to your strategic decision-making that will reduce your tax liability and ensure that your business receives every deduction, credit, or tax exemption possible.

I am available at your convenience to discuss these matters, I can be reached at JeffreyLevine.Solutions today.

Basics Strategic Management in Business

Basics Strategic Management in Business

You don’t have to be a rocket scientist to start a business, but it does require you have a basic knowledge of key skills. The key skills involve understanding how to effectively manage people, operations, sales, marketing, strategic planning, and financial accounting objectives.  If these skills are not your strong suit engage consultants, advisors, and employees to supplement what you lack.  Focusing on your strengths and delegating your weaknesses gives you an advantage at rapidly scaling your business.

Strategy is defined as knowledge of specific goals, the uncertainty of unexpected events and the need to take into regard the likely or realistic conduct of others. Strategy is the blueprint of choices in an organization that demonstrate its purposes and objectives and defines the type of company it will turn out to be.

Management strategies are a series of techniques for controlling and directing a business to achieve a set of predetermined goals. They include strategies for goal setting, leadership, business administration, and operational activities that provide a clear sense of direction for the company and its employees about its market, consumers, credibility, and competitors which ultimately induce systematic profitability.

There are many factors to consider when taking on this sort of venture and I suggest getting the right counsel from the beginning to support you in those endeavors. If you or your team would like a consultation to discuss your strategic business planning strategies, schedule an appointment at JeffreyLevine.Solutions today. I would be glad to be of service to your organization’s needs.