Some people choose to go into business to pursue their passion, while others utilize their entrepreneurial skills to become wealthy. Genuine wealth is about more than making money; it’s about making decisions that will grow your money and allow for a sustainable stream of revenue far into the future. It takes skills and careful financial planning to grow money into wealth. Here are some tips you can use to grow your business’s wealth.
1. Make It A Priority To Invest
Financial planners advise investing as a key component of growing long-term wealth. The same advice applies to business owners as well. In an Entrepreneur article called “8 Money Mistakes to Avoid on Your Way to Being Wealthy,” author Grant Cardone states, “To create wealth, you must make investments that will create dependable streams of income flows, independent of your main source of income.”
2. Take Smart Risk
The ebbs and flows of the stock market can make investing seem daunting, but taking smart financial risks when investing can pay off in the long run. One way to do so is to be prepared. In a Forbes magazine article titled, “How to Take Smart Risks,” author Sara Eckel gives the following advice: “The first step is to accept that no matter how experienced, intelligent and prepared you are, the unexpected can always happen.” Rather than trying to find an immediate pay out, take risks that are more calculated and focused on the long-term.
3. Know The Tax Codes
If your business is preparing its own taxes, you could be missing out on deductions and credits and paying too much. You don’t want to break the law or bend the rules, but you should hire a tax professional who will make sure that you are taking advantage of all the tax credits and deductions for which your business qualifies.
4. Make A Plan
Having a financial plan in place may seem like a no-brainer, but many business owners fail to plan for the long term. In a Business Insider article titled, “Financial Planners Share Their Best Advice to Grow Wealth,” a handful of investment professionals and financial planners are asked to advise readers on wealth management. Joyce O’Boyle of Voya states, “Create a formal, written, financial plan that includes a list of your financial goals and put together an automatic savings program specific to achieving each objective. After all, ‘a goal without a plan is just a wish.'”
5. Check Your Emotions
One of the most important rules of growing wealth is to keep a cool head. In the Great Recession of 2008, many people panicked and sold off a lot of their stocks when the market tanked. However, those who kept their emotions in check and left their accounts alone have since recouped most of what was lost in the downturn. Your business will likely face emergencies, but if you have a plan and emergency savings, you can keep these emergencies from bankrupting your business.
This article was written by Alaina Brandenburger for Small Business Pulse