The year 2020 has defined a different level of spooky on a personal and professional level for all of us. Change is the only constant in the world, so what lessons have we learned that should prevent us from making spooky financial mistakes in our businesses? Here are 5 pitfalls you should avoid for your small business:
Remaining financially illiterate
Yes, that is a choice. The internet and the library are full of endless options for us to educate ourselves. Any new concept in confusing until you take it upon yourself to learn and master it. If you don’t know the difference between an IRA and 401K…you know how to search the internet…you are entirely responsible for not educating yourself.
Paying too much for real estate
Owning a home isn’t what is important…what?! Yes, we said it. Buying at the right time, in the right location and considering how long you will stay there are a huge factor in your purchase. There is a reason a lender is willing to give you a 30-year fixed interest loan…you won’t stay there for 30 years friends. Always operate with the understanding that you need to be able to generate multiple income streams and use your own money wisely.
Waiting too long to save for retirement
You know what is spooky? Living longer and not having enough income to survive that long. What? Yes, that is a stark reality for many. One in three Americans has less than $5,000 in retirement savings A Northwestern Mutual study found that one in three Americans has less than $5,000 saved up for retirement, and 21% of Americans have no retirement savings at all. Whatever the reason behind their lack of savings, the result is the same. When they do begin saving, these individuals will have to set aside larger portions of their income each month to have enough for retirement because their savings will have less time to compound before they need to begin drawing upon them. Alternatively, these workers may need to stay in the workforce a little longer than they planned.
So, what can you do to prevent this pitfall? Meet with a financial advisor and map out your retirement. We promise, this isn’t just for the rich elite, it is for everyone and an essential tool for retirement.
Going it alone
We have all heard the saying that, “teamwork makes the dream work.” As small business owners, it is abundantly clear that without a good team in place, we would be stranded alone on a haunted highway.
As a go getter, we always tend to multi-task and not delegate. Setting yourself up for burnout is not scalable. You want freedom, you want to scale your business then you cannot do it alone. Hire, delegate and claim your freedom while scaling your business. No haunted highways for you!
Accepting societal permission
Brace yourself, this is the big bad wolf portion of this article. Let me tell you about Erik. Erik comes from a broken home; he did not graduate high school but later in life found a passion for coffee. Erik is saving and planning to leave his 9-5 to open a new coffee shop.
Erik tells his friends about his plan.
Friend 1: Dude, that is amazing that you have come this far given your life and how tough it was. Your 9-5 has health benefits and it so close to your house, what is the coffee shop fails?
Friend 2: Wow Erik. I am proud of you for even trying this when most of us just do our 9-5 and go home. You saved up how much? Why not invest it in a CD account....way less risky if you ask me.
BIG BAD WOLF MOMENT: Erik is being told that he is incredible, brave and smart. That despite the odds being stacked against him, he has done well in life.
ERIK JUST GOT SOCIETAL PERMISSION TO STAY STAGNANT.
Do not fall into this pitfall. Your circumstances do not dictate anything about where you should be in life or business. You only need to trust yourself and give yourself permission to conquer.
We hope our 5 Spooky Financial Pitfalls for Small Business were helpful to you. If so, please share with your friends and colleagues. Click below to claim the FREE gift we created for you for surviving this scary reality check.