Jeff Haywood, CPA

Posts Tagged ‘Success’

What If?

What if I form other businesses to keep my number of employees below 50 or 25 to get around Obamacare? If I start another related business with a different ownership group will the government look at these related but separate businesses as one?  These are the million dollar questions of the day and here is deal, as of today.

There are many unknowns here and the people with some knowledge about it recognize that any loopholes in Obamacare could be addressed and closed by the government.  So if you are wondering how your business can avoid the additional costs associated with this law you would need to take a very close look at any possible workarounds and the related costs and complexities they would add and the very real possibility that the regulations will be changed to close any perceived loophole(s).  I do not see where anyone knows if the government would look at related business with similar but different ownership groups as one combined business for the sake of determining the number of employees as related to Obamacare .  It seems the speculation is that the workforces could be combined for the purposes of the health care law.  Repeat, could be, for emphasis that there are so many unknowns that we are dealing with here.

Here are some articles I looked at for my research and relevant highlights:

http://www.entrepreneur.com/article/225559

Relevant Quote:

http://www.thepublicinsuranceoption.com/2011/reform/small-business-tax-regulations.html

Relevant Quote:

Here is an article addressing what seems to be a work around.  However, it is acknowledged in the article that regulations could change to close any loopholes.

http://www.huffingtonpost.com/2013/01/30/small-business-obamacare_n_2581653.html

Relevant Quote:

 “We’re dealing with things that don’t exist but have the theoretical possibility of existing,” Christiansen adds. “Right now, we have as the default employer-employee relationships, but that whole paradigm is potentially problematic as we have more and more restrictions imposed by government.”

So the answer to your question is likely unknown and even if it is known or becomes known it is likely to change so be careful about decisions that lock you into added costs and complexity.  My faithful readers know I value lifestyle choices that minimize complexity and stress.  But that is just me.  For you make sure you count the cost and know the existing and possible new risks moving forward.  And that is all I have to say about that…for now.

Jeff Haywood, CPA
The CPA Superhero
972-439-1955
jeff.jhtaxes@gmail.com

This article was written by Jeff Haywood, CPA.
Jeff is a licensed CPA in Texas
He has prepared income tax returns for the public for over 10 years.
He also has an MBA in Finance from Loyola University in Chicago and he has 24 years experience in Corporate Finance and Business Analysis.

Tweet

I prepare the following types of tax returns:

Personal
Business
Estate/Gift
Trusts
Federal and State Returns

In addition here are links to a few of my articles about income taxes for expatriates:

Income Tax Returns for Expatriates
US Income Tax Help for Expatriates
Foreign Earned Income Exclusion
Are You Required to Report Foreign Bank and Financial Accounts?

Click Here to Follow My Twitter Account: Taxesforxpats

For a full list of prior posts see the CPA Tax Blog.

Standard Disclaimer:

As always keep in mind that the content provided on this site is general in nature and may or may not apply to your particular case. It is best to check with a tax professional about your circumstances and what is best for you personally. Also, IRS regulations and tax laws are constantly changing and the information on this site is not constantly updated. Again please check with me about your particular circumstances and what will be best in your situation at the given time and law.

Comments:

If you have a comment to share about this post or for me, please email me at jeff.jhtaxes@gmail.com.

There Is More Than One Way to Get To the Market

Have you heard the expression there is more than one way to get to the market? When you start your business it is essential that you understand that you do not have to do it the same way as someone else and most of the time it is not a good idea to imitate someone else. It is so important that your business works for YOU.

Baseball Examples

There is usually more than one way to operate/market a business. Take baseball teams for example. The Yankees spend big bucks on proven players and they generate a lot of attention and are the most valuable team in baseball. Are they the most successful? That depends on your definition of success.

The other end of the spectrum is the Oakland A’s, of “Moneyball” notoriety. The Oakland A’s follow a different approach out of necessity. They look for undervalued players that have certain characteristics that are key to winning games. The Oakland A’s are successful in their own way. Mainly they make a profit and generally they have a winning team, even if they have not won the World Series in many years.

Then there are the St. Louis Cardinals, who are my favorite team. The Cardinals have employed what appears to be a hybrid of these two ways to build a team. Actually they have transitioned from a variety of the Yankees approach of signing players from other teams to a team that develops talent from within the organization. They are now shying away from paying enormous salaries to older proven players over many years. The Cardinals have great attendance at their games, they are regularly in contention for the World Series and have won several recently.  They also have a faithful, devoted, fan base and they have shown they can adapt and evolve.

Questions To Ask Yourself

From the examples above you can see there is more than one way to build a business and achieve success. So what about your business? Ask yourself some questions:

• In what way do you want your business to be successful?
• Does your plan allow you to achieve your lifestyle goals?
• Is your plan consistent with your strengths, your market, and your financial resources?

There are many things to consider when starting a business. Please realize that you do not have to and probably should not copy someone else. By all means realize that being the biggest in terms of generating revenue is not the only way. Keep your eye on your objective. Is it to be famous or to have the most money in your pocket at the end of the day or both? The biggest is seldom the most successful in terms of profit and money in your pocket.

So when you start planning your business these are a few things to consider.  Your friendly CPA Superhero has worked with many people that have started businesses and some have succeeded and some have failed.  In addition your CPA Superhero has built and is currently building another business.  Benefit from these observations and plan a way to the market that you will enjoy and that will produce profits and empower you to achieve your desired success for the business and your lifestyle.

Jeff Haywood, CPA
CPA Tax Superhero
972-439-1955
jeff.jhtaxes@gmail.com

This article was written by Jeff Haywood, CPA.
Jeff is a licensed CPA in Texas
He has prepared income tax returns for the public for over 10 years.
He also has an MBA in Finance from Loyola University in Chicago and he has 24 years experience in Corporate Finance and Business Analysis.

Tweet

I prepare the following types of tax returns:

Personal
Business
Estate/Gift
Trusts
Federal and State Returns

I especially value discussions about you, your business, your dreams and goals.

Click Here to Follow Jeff Haywood, CPA on Twitter
Also, Click Here to Follow My Twitter Account: Taxesforxpats

In addition here are links to a few of my articles about income taxes for expatriates:

Income Tax Returns for Expatriates
US Income Tax Help for Expatriates
Foreign Earned Income Exclusion
Are You Required to Report Foreign Bank and Financial Accounts?

Click Here to Follow My Twitter Account: Taxesforxpats

For a full list of prior posts see the CPA Tax Blog.

Standard Disclaimer:

As always keep in mind that the content provided on this site is general in nature and may or may not apply to your particular case. It is best to check with a tax professional about your circumstances and what is best for you personally. Also, IRS regulations and tax laws are constantly changing and the information on this site is not constantly updated. Again please check with me about your particular circumstances and what will be best in your situation at the given time and law.

Comments:

If you have a comment to share about this post or for me, please email me at jeff.jhtaxes@gmail.com.

Challenges/Obstacles to Starting a Business

An entrepreneur faces many challenges/obstacles when starting a new business. Many of these challenges take place in your mind. In this post we will look at unmet expectations and your response. The bigger challenge really is dealing with your emotions and not so much the unmet expectations. In the new venture my wife and I undertook, my wife had the expectation, set by someone else, that she needed to have full detailed inventory list before she began. As a CPA Superhero Bean Counter I fully understand the need for an inventory. However, success is contingent on STARTING and sometimes you have to say 1-2-3 go even without a full inventory list. When unmet expectations keep you from starting to sell your product and generating revenue that is a bigger problem than not having an inventory. (excuse me…what did the bean counter just say?)

Do You Need to be Perfect?

The other expectation my wife had was having a perfect display for her product. Expecting perfection is always an emotional killer/obstacle at the start of a business. Expecting to get to perfection eventually is the way to go. The thing is, the sooner you get started and sell product…and learn the better. Yes, you want to plan and prepare but you also have to START to make money.

Jason Motte

Being a baseball fan I liken this to the players and the coaches decisions. When a coach has a relief pitcher that has only one pitch, a fastball, and he is working on a slider the coach does not wait to put him in a game as long as he throws that fastball over 90 mph and with some control and with a little movement on it. What happens with the one pitch pitcher? He has to get into a game to learn how to pitch with his one pitch and learn from mistakes quickly. Typically a coach has several of these not fully developed relief pitchers and he puts them in games and sees who learns, adapts, and succeeds quickly without getting emotionally crippled. It was not the end of the world when Jason Motte struggled for the St. Louis Cardinals nor when others with more potential failed. But then Jason Motte figured out how to win with one pitch and he gained confidence while others could not handle occasionally failing.  So you see you do not need to be perfect.  You just need to get out there and START and learn and develop into a successful businessman.

Guess what. Not only do even the best baseball players fail, but businessmen fail also. How many restauranteurs fail trying to make the best food and at low prices. Meanwhile McDonald’s and Domino’s succeeded with inferior food at higher prices. They learned how to succeed with what they had and they went for it even though it was not perfect.

My wife learned to start without an inventory and without a perfect display and to charge more than she was comfortable with. What happened? She started selling jewelry and generated some cash. She had many shows with a variety of success and a couple of flops but all in all in the end she sold more then she expected to. In addition, she learned what sells well and quickly and what does not. Now she is equipped with experience and knowledge to do a better job of buying inventory that will move. But none of that would have been possible had she not STARTED.

By the way we now have an inventory list of everything that remains and its cost.  It is not perfect but it is close enough and we can move ahead.

You and Lebron James

You can get your business started, just do not expect to be perfect and say 1-2-3 Go.  Like Lebron James you will not make all of your shots but you will be a winner.

To talk to an experienced CPA about starting a business and the challenges that go with it, contact me using the information below.  See my other posts about success and business entities and taxes for further help.

Jeff Haywood, CPA
CPA Tax Superhero
972-439-1955
jeff.jhtaxes@gmail.com

This article was written by Jeff Haywood, CPA.
Jeff is a licensed CPA in Texas
He has prepared income tax returns for the public for over 10 years.
He also has an MBA in Finance from Loyola University in Chicago and he has 24 years experience in Corporate Finance and Business Analysis.

Tweet

I prepare the following types of tax returns:

Personal
Business
Estate/Gift
Trusts
Federal and State Returns

I especially value discussions about you, your business, your dreams and goals.

Click Here to Follow Jeff Haywood, CPA on Twitter
Also, Click Here to Follow My Twitter Account: Taxesforxpats

In addition here are links to a few of my articles about income taxes for expatriates:

Income Tax Returns for Expatriates
US Income Tax Help for Expatriates
Foreign Earned Income Exclusion
Are You Required to Report Foreign Bank and Financial Accounts?

Click Here to Follow My Twitter Account: Taxesforxpats

For a full list of prior posts see the CPA Tax Blog.

Standard Disclaimer:

As always keep in mind that the content provided on this site is general in nature and may or may not apply to your particular case. It is best to check with a tax professional about your circumstances and what is best for you personally. Also, IRS regulations and tax laws are constantly changing and the information on this site is not constantly updated. Again please check with me about your particular circumstances and what will be best in your situation at the given time and law.

Comments:

If you have a comment to share about this post or for me, please email me at jeff.jhtaxes@gmail.com.

Step One:

The Introduction

How do you turn those networking contacts into clients or valuable resources? Here are a two steps to make that happen. First, after meeting someone at a networking function or elsewhere immediately contact them and let them know how pleased you are to have had the opportunity to meet them.  Also make sure they have your contact information and start on a meaningful relationship by asking them if they would like to meet for a cup of coffee to explore networking opportunities.  You may need to spell out for them that you are interested in finding out more about them, what they do well, who they know and what they do well and you are willing to share the same about yourself.

A side note: It does not have to be over coffee.  I often do these meetings with people in other countries via the phone/Skype.

Step Two:

The Meeting

What is the point of this? What are you networking for? Do you need business, ideas, resources, other? What opportunities can the person you met bring to you and your business and how can you help them? When you meet with them find out what they are good at and what they need and what their friends are good at and what they need. That is the definition of networking. It is turning one contact into potentially an unlimited number of useful contacts.

When you meet should you ask them for their business? Maybe but probably not. Remember this is networking. You are developing a network of people that know, trust and value each other. That really takes time to develop. So invest in yourself and others by really networking. I like to set goals such as number of new contacts made and number of one on one meetings.  I need to add to those goals the number of follow up contacts as well.

The results have been good but not perfect. While a percentage of people will have a one on one meeting some times it does not yield much. A percentage are “live ones” that get what networking is and will work it. They talk about themselves and who they know. From showing interest in them, whether they are a potential client or not, and actually trying to help them yields dividends. They may not become a client but they likely know someone who would be a good match for your business. Real success in networking is when people start contacting you for referrals for something they or a friend need. Typically I will get an email from someone asking if I know a good attorney or plumbing guy. One of my newest clients met someone that I had met and they referred the new client to me to do help them with their business and do their income tax returns. It is a small world right? Not really, but you can make your world smaller and draw people and business to you by really networking.

Become a Connector:

Who are you?  To create a network you have to become “the guy” that makes it happen.

Often you will benefit by sharing with others what it means and how you develop a network.  Many people have the mind-set that just exchanging business cards will magically make it happen.  Others think it means trading, I refer people to you and you refer people to me.  Actually, for you to really be a source that helps people you refer people who you think are a good fit.  I am not a good fit for everyone that needs accounting and tax work.  That is why you need to get to know each other and what you do well.  This even works with your competitors.  What you are after is knowledge of people and what they do well so you can connect people who need help with those who are a good fit for them.  For further help with this concept read “The Go-Giver”. In “The Go-Giver” you will learn that 50-50 is a losing proposition.  Don’t look for a referral in return for one you give.  Be “the guy” that helps people with their needs and help people understand what a real network is and how it works.

What will result from really working a network? You will end up with a group of people who help others and look out for each others interests. Of course for that to happen you have be “that guy” for others.  Just connect and help others and you will benefit by becoming known as “that guy”, the CONNECTOR.  It works.

If you would like to network with me feel free to use my information below to contact me.

Jeff Haywood, CPA
CPA Tax Superhero
972-439-1955
jeff.jhtaxes@gmail.com

This article was written by Jeff Haywood, CPA.
Jeff is a licensed CPA in Texas
He has prepared income tax returns for the public for over 10 years.
He also has an MBA in Finance from Loyola University in Chicago and he has 24 years experience in Corporate Finance and Business Analysis.

Tweet

I prepare the following types of tax returns:

Personal
Business
Estate/Gift
Trusts
Federal and State Returns

I especially value discussions about you, your business, your dreams and goals.

Click Here to Follow Jeff Haywood, CPA on Twitter
Also, Click Here to Follow My Twitter Account: Taxesforxpats

In addition here are links to a few of my articles about income taxes for expatriates:

Income Tax Returns for Expatriates
US Income Tax Help for Expatriates
Foreign Earned Income Exclusion
Are You Required to Report Foreign Bank and Financial Accounts?

Click Here to Follow My Twitter Account: Taxesforxpats

For a full list of prior posts see the CPA Tax Blog.

Standard Disclaimer:

As always keep in mind that the content provided on this site is general in nature and may or may not apply to your particular case. It is best to check with a tax professional about your circumstances and what is best for you personally. Also, IRS regulations and tax laws are constantly changing and the information on this site is not constantly updated. Again please check with me about your particular circumstances and what will be best in your situation at the given time and law.

Comments:

If you have a comment to share about this post or for me, please email me at jeff.jhtaxes@gmail.com.

Secret

Here is a secret to creating a customer that wants to do business with you and will come back for more of what you provide.  Don’t try to sell them your product or service right away.  Right away find out what is on their mind and how you can assist them.  Then assist them using what you KNOW.

For example the “Mall Guy” that tries to get you to stop to look at what they have or listen to what they have to say.  Irritating right?  How about someone that offers to help you find what you are looking for?  Yes, that works if they KNOW where it can be found.  So “Mall Guy” and the rest of us need to first try to help people with what is on their mind.  The result will be pleasant surprise that you actually cared and were helpful. 

Two Keys

First, find out what is on someone’s mind by getting them to talk about themselves.  Next, use what you KNOW to help them find what they are looking for.  The key here is what you KNOW right now.  If you have no clue where it is then suggest someone else who might help but DO NOT insist on helping them find it if you do not KNOW where it is.  You can offer to help them find it but they may not value that.  Personally I can often find items in a store faster than an employee that does not KNOW where it is.  So OFFER but don’t just say blindly follow me who is also blind.  Got it?  Also, become knowledgeable about not only your product or service but also others and their products and services (This will be a subject addressed in a following post).

Getting someone else to talk is powerful and kind.  It does give the other person control but it is a control you want them to have.  Think about “Mall Guy”…after asking if he can help a person find something and then directing them to another store, which he knows exactly where it is, then some people will stop and ask “what do you do”.  This will happen because he provided a valuable service.  People want to do business with people that are truly helpful.  So be “that guy” and people will want to do business with you and will come back to you. 

When was the last time you referred someone to a competitor because it was best for that person.  Try doing what really adds value for people and they will love you for it and you will benefit from from being “that guy”.  By the way, read the Go-Giver, which is an inspiration for this post.

Jeff Haywood, CPA
CPA Tax Superhero
972-439-1955
jeff.jhtaxes@gmail.com

This article was written by Jeff Haywood, CPA.
Jeff is a licensed CPA in Texas
He has prepared income tax returns for the public for over 10 years.
He also has an MBA in Finance from Loyola University in Chicago and he has 24 years experience in Corporate Finance and Business Analysis.

Tweet

I prepare the following types of tax returns:

Personal
Business
Estate/Gift
Trusts
Federal and State Returns

I especially value discussions about you, your business, your dreams and goals.

Click Here to Follow Jeff Haywood, CPA on Twitter
Also, Click Here to Follow My Twitter Account: Taxesforxpats

In addition here are links to a few of my articles about income taxes for expatriates:

Income Tax Returns for Expatriates
US Income Tax Help for Expatriates
Foreign Earned Income Exclusion
Are You Required to Report Foreign Bank and Financial Accounts?

Click Here to Follow My Twitter Account: Taxesforxpats

For a full list of prior posts see the CPA Tax Blog.

Standard Disclaimer:

As always keep in mind that the content provided on this site is general in nature and may or may not apply to your particular case. It is best to check with a tax professional about your circumstances and what is best for you personally. Also, IRS regulations and tax laws are constantly changing and the information on this site is not constantly updated. Again please check with me about your particular circumstances and what will be best in your situation at the given time and law.

Comments:

If you have a comment to share about this post or for me, please email me at jeff.jhtaxes@gmail.com.

An S Corporation is a favorite of CPA’s because of the tax benefits they can bring to their clients but an S Corporation is not for everyone/business.  Now keep in mind I am writing this from a tax and not a legal standpoint since you cannot form an S Corporation solely for tax purposes.  Typically taxpayers who have their own business can save some and sometimes large sums of money in the way of taxes by forming an S Corporation if they have sizable profits.  Also, realize there are responsibilities that come with forming an S Corporation in addition to potential tax savings.

Many form S Corporations to reduce the amount of employment taxes they pay each year and also to a measure of personal protection from the liabilities of their business.  The employment taxes for a sole proprietorship show up on your personal income tax return as Self-Employment Taxes and they are the equivalent of social security and medicare taxes withheld from an employees paycheck plus the employers share since you are both the employee and the employer.  Depending on current tax law you could be looking at approximately 15% in employment taxes on your profits.  Forming the S Corporation enables you to potentially reduce some of these taxes.

How does this work?  The IRS requires S Corporations to pay their active shareholders a reasonable salary for their services performed for the corporation.   Below is part of the IRS wording on this subject.

“S corporations must pay reasonable compensation to a shareholder-employee in return for services that the employee provides to the corporation before non-wage distributions may be made to the shareholder-employee. The amount of reasonable compensation will never exceed the amount received by the shareholder either directly or indirectly.”

So this opens a door, albeit not a well defined door, for a shareholder of an S Corporation to take some of the companies profit in the form of salary for himself and some in the form of a shareholder draw that is basically his share of the business profits which may not be subject to employment taxes.   For more information on this subject including factors to consider to determine a reasonable salary see this IRS post on “S Corporation Compensation and Medical Insurance Issues”.

http://www.irs.gov/Businesses/Small-Businesses-&-Self-Employed/S-Corporation-Compensation-and-Medical-Insurance-Issues

Self-Employment Taxes are where an S Corporation can save you some money.  But realize that forming an S Corporation adds a level of complexity to your business and your life.  To form an S Corporation will cost you some money and you also encounter regular reporting and required maintenance for the S Corporation.  Depending on how the S Corporation is setup you may be required to file annual minutes or other maintenance/procedural requirements.  In addition you become an employer and need to pay the shareholders salaries and conform with payroll requirements and reporting.  This often involves reporting who your employees are to the state in which you operate and filing payroll tax and unemployment tax returns on both the federal and state level.  In addition you are required for a Federal Income Tax Return for the S Corporation and likely a state return as well.

As you can see by this brief (not all inclusive) overview forming an S Corporation is not a simple matter and not one that should be undertaken without conversations with your CPA and attorney.  You especially want to be careful of forming an S Corporation for a business that has not generated any profits yet as you may add expenses and complications without seeing any benefit.  So before you start a business call me to discuss your situation.  If you already have a profitable business you may be paying too much in taxes so you should contact me using my contact information below to see if an S Corporation will benefit your business.

Jeff Haywood, CPA
CPA Tax Superhero
972-439-1955
jeff.jhtaxes@gmail.com

This article was written by Jeff Haywood, CPA.
Jeff is a licensed CPA in Texas
He has prepared income tax returns for the public for over 10 years.
He also has an MBA in Finance from Loyola University in Chicago and he has 24 years experience in Corporate Finance and Business Analysis.

Tweet

I prepare the following types of tax returns:

Personal
Business
Estate/Gift
Trusts
Federal and State Returns

I especially value discussions about you, your business, your dreams and goals.

Click Here to Follow Jeff Haywood, CPA on Twitter
Also, Click Here to Follow My Twitter Account: Taxesforxpats

In addition here are links to a few of my articles about income taxes for expatriates:

Income Tax Returns for Expatriates
US Income Tax Help for Expatriates
Foreign Earned Income Exclusion
Are You Required to Report Foreign Bank and Financial Accounts?

Click Here to Follow My Twitter Account: Taxesforxpats

For a full list of prior posts see the CPA Tax Blog.

Standard Disclaimer:

As always keep in mind that the content provided on this site is general in nature and may or may not apply to your particular case. It is best to check with a tax professional about your circumstances and what is best for you personally. Also, IRS regulations and tax laws are constantly changing and the information on this site is not constantly updated. Again please check with me about your particular circumstances and what will be best in your situation at the given time and law.

Comments:

If you have a comment to share about this post or for me, please email me at jeff.jhtaxes@gmail.com.

Is success defined by money?  It is just paper and metal.  Right.  The scriptures say money is for a protection and it is needed but apparently it does not bring happiness.  Just look at the lives of the richest most successful people?  Broken marriages, relationships, rehab for addictions and sometimes attempted suicide or overdoses.   For many money and wealth is the measurement that defines success.  How about you?  What defines success for you?

I still remember my uncle coming home from work around 1 PM and going to the beach, out on his motorcycle, or to take some pictures (his true passion).  What was up with that?  My uncle worked only a few days a week and even then not full days.  He pointed out to me that he worked himself into a position that he could make his own schedule and work as much or as little as he wanted.  So he had found a niche that worked for him and his lifestyle and I began to question the accepted definitions of success.

So what are you striving for.  I know it is more than pieces of paper and metal.  From time to time we do well to ask ourselves why I am doing this and what is it giving me and others.  Evaluate, plan, execute, reevaluate, adjust and move toward real success.

Do you want a CPA that does not accept conventional thinking?  Then contact me using the information below.

Jeff Haywood, CPA
CPA Tax Superhero
972-439-1955
jeff.jhtaxes@gmail.com

This article was written by Jeff Haywood, CPA.
Jeff is a licensed CPA in Texas
He has prepared income tax returns for the public for over 10 years.
He also has an MBA in Finance from Loyola University in Chicago and he has 24 years experience in Corporate Finance and Business Analysis.

I prepare the following types of tax returns:

Personal
Business
Estate/Gift
Trusts
Federal and State Returns

I especially value discussions about you, your business, your dreams and goals.

Click Here to Follow Jeff Haywood, CPA on Twitter
Also, Click Here to Follow My Twitter Account: Taxesforxpats

In addition here are links to a few of my articles about income taxes for expatriates:

Income Tax Returns for Expatriates
US Income Tax Help for Expatriates
Foreign Earned Income Exclusion
Are You Required to Report Foreign Bank and Financial Accounts?

Click Here to Follow My Twitter Account: Taxesforxpats

For a full list of prior posts see the CPA Tax Blog.

Standard Disclaimer:

As always keep in mind that the content provided on this site is general in nature and may or may not apply to your particular case. It is best to check with a tax professional about your circumstances and what is best for you personally. Also, IRS regulations and tax laws are constantly changing and the information on this site is not constantly updated. Again please check with me about your particular circumstances and what will be best in your situation at the given time and law.

Comments:

If you have a comment to share about this post or for me, please email me at jeff.jhtaxes@gmail.com.

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You can “save” yourself to death.  How can that happen and how can you avoid it and achieve success?

Difference Between Saving and Investing

Saving is good right?  Most of the time the answer is yes but not always.  Make sure you understand the difference between saving and investing.  It is easy to confuse the two and something to always be mindful of.  Saving is getting a product for less money than you could elsewhere.  Saving can often be not purchasing something.  This is where confusion can set in.  We could view not purchasing something as saving but we could be harming our financial position by doing so.  How?  If we choose not to spend money on something that will help us earn more money.  A purchase of something that may help earn more money can be an investment.  An investment can be a product or a service but it could help us generate more income.  It is easy to look at a potential investment and decide I will save money by not purchasing it.  In doing so we could be limiting our opportunities to generate income and cash flow.  Do not view investments in terms of saving money.  Instead look at what the investment could do for you and decide if it is a good investment.

Analyzing an Investment

To analyze an investment you need to consider such things as what is the risk involved and what is the potential payout.   Also, you need to consider if it fits with your plan and who you are and working to become.  So for example would you pay someone $1,000 for a service that could lead to your business earning an additional $200 per month net of costs?  The answer should be maybe.  Your decision will depend on if you have the cash now or if you would need to borrow the money.  It will also depend on if it is consistent with your plan.  Other opportunities will also compete for your investing dollars.

Investment Example: Sharpening the Sword

Do you get that?  In your plan you should budget money that you can spend on consumables and have a separate budget or plan for investments.  I do not recommend particular investments, but I recommend investing.  Please realize that paying for and taking a course that will improve your knowledge and ability to serve your market is an investment in yourself.  Many refer to this as “sharpening the sword”, your ability to earn money.  If you view this as a cost that you can avoid and thus “save” money eventually your “sword” gets dull and you will be unable to “do battle” or earn money.  So simply realize what the difference is between spending and investing and have a plan for both.  If you are not in a position to invest today have a plan to get there as soon as possible.  In today’s world you could say you can not afford not to invest.  The Reality is we must grow or die.  The scene of this world is changing so quickly we can not stay stagnant, we must all keep up or get and stay ahead.

Conquer Your Fear

If fear keeps you from investing read “How to Stop Worrying and Start Living” by Dale Carnegie.

The reality today is nothing is a sure thing.  So some investments will fail to produce the desired results but that does not make you a failure.  Successful people like successful athletes fail often but they overall are successful.  Be successful in overcoming fear and invest especially in yourself and your business.  Focus on the opportunity at hand and not the recent failure.  The best baseball hitters fail to hit 70% of the time.  When they make an out they see their odds of getting a hit next time are better.  They do not take the last out they made into the batters box with them.  They take the knowledge they gained from that last at bat and use it to their advantage.  So we need to work at how we view things.  Don’t view not investing as saving money.  Take charge of your life and charge forward to a successful today.

I specialize in helping business owners and investors prepare tax returns but I also help my clients by acting as a sounding board and bringing this type of thinking into conversation.  So if you want a CPA who does more than prepare tax returns, one that will help you achieve success, then contact me today  using the contact information below to make an appointment to discuss your situation.

Jeff Haywood, CPA
972-439-1955
jeff.jhtaxes@gmail.com

This article was written by Jeff Haywood, CPA.
Jeff is a licensed CPA in both Texas and Illinois.
He has prepared income tax returns for the public for over 10 years.
He also has an MBA in Finance from Loyola University in Chicago and he has 24 years experience in Corporate Finance and Business Analysis.

I prepare the following types of tax returns:

Personal
Business
Estates
Trusts
Federal and State Returns

I especially enjoy discussions about you, your business, your dreams and goals.

Click Here to Follow Jeff Haywood, CPA on Twitter
Also, Click Here to Follow My Twitter Account: Taxesforxpats

In addition here are links to a few of my articles about income taxes for expatriates:

Income Tax Returns for Expatriates
US Income Tax Help for Expatriates
Foreign Earned Income Exclusion
Are You Required to Report Foreign Bank and Financial Accounts?

Click Here to Follow My Twitter Account: Taxesforxpats

For a full list of prior posts see the CPA Tax Blog.

Standard Disclaimer:

As always keep in mind that the content provided on this site is general in nature and may or may not apply to your particular case. It is best to check with a tax professional about your circumstances and what is best for you personally. Also, IRS regulations and tax laws are constantly changing and the information on this site is not constantly updated. Again please check with me about your particular circumstances and what will be best in your situation at the given time and law.

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