As a business owner, it’s easy to get caught up in the finances of your business, and forget about what you take home. When we do consider it, we tend to think about our own money as a store of value that only benefits ourselves. In the short term, that may be true. Your money may be spent primarily on your own enjoyment, on your needs and wants, and on your future security. But if you live long enough, you start to realize that “you can’t take it with you”. For this reason, it’s never too early to think about who’s going to get your money and estate when you die. Thinking this way turns your business into a way to help your family and loved ones for generations to come.
A will is easy enough to draft, but this document by no means guarantees that you will have something to pass on when you pass on. If it’s important for you to leave something of value to the next generation, even if that generation isn’t even born yet, there are some well-worn paths to follow for success.
Learn just as much about personal finance as you do about business finance. It’s hard to motivate yourself to positive action if you don’t understand the best path forward. Humans need to know “why” before they will work hard toward a new goal. By reading the best-respected top finance blogs, you’ll get a constant smattering of bite-sized articles about common personal finance mistakes and methods. Armed with this knowledge, you’ll begin to see your own finances in a new light. This new knowledge base is the foundation upon which all future change is built.
Start to eliminate debt and save. Debt elimination and saving are two sides of the same coin. When you pay down your debt, you may be “losing” the money, but you are also saving yourself the tremendous fees associated with outstanding debt. When you finally manage to pay off your debt, you’ll be able to start saving in earnest, because you won’t be losing money through monthly payments and annual interest. When you are able to save a large amount of money, this is when you start to feel the first wisps of financial freedom breezing through your life. Keep it up and you’ll only create more opportunities for yourself and your benefactees down the road.
Begin to invest in your future. The only way to reliably turn a little bit of money into a lot more money is through investment. We can invest in many things: homes, modern investment options as described in this up-to-date Betterment investing review, individual stocks and bonds, education, and more. Properly speaking, investments are made into assets, which are possessions which bring money into your life. Through the accumulation of assets, you’ll find that you not only need to work less hard to incur the same profit, you’ll be creating a lush portfolio to one day be distributed among your children, a charity, or anyone else you care to share it with.
If you learn to make good decisions in these three financial categories, you’ll find that you have more money than you’re used to, and less financial worry to boot. In the long run, these habits will help you accrue a significant estate, one worth giving to your progeny with pride and job. It’s not easy to build an estate, but it’s worth it for the next generation, and an especially important consideration for business owners.