7 Reasons to Pay Yourself FirstWritten by Diann Cannon
Last month I was referred to a young fellow who wants to open his own business. He was pleasant, energetic, knew his stuff too; all good qualities to have, especially if you're self-employed.We started out well enough. We talked about his long-range goals as well as his current circumstances, exploring how they might influence each other. When I learned that he had no real savings, I recommended that he begin putting away at least 10% of his income. Well, that's when things took a left turn. He became quite irritated and told me that there was absolutely no way he could do that; every penny he and his wife brought in was already allocated and they just couldn't afford to hold on to any of it. Everything he said thereafter just demonstrated all more that he really NEEDED to have some savings cushion: his wife's position was not secure; business she worked for may be folding, they had just had a baby. Despite my best efforts, he was not willing to consider putting his family's security on front burner. Instead, he decided not to hire me as his coach, because he said, "I wasn't 'right kind.'" Hmmmm. I've seen businesses come and go and those who cannot handle money at home typically take same habits into their business and before they know it, they become a failure statistic. So, regardless of how you are employed (employee vs. self-employed), saving money is smart for some obvious and some not-so-obvious reasons: Working becomes more FUN! If your entire paycheck is spent on basic survival needs, going to work every day can be very depressing. Saving a portion of your hard-earned dollars is empowering because decision is made not only by you, but also for your benefit. There is an excitement that comes from watching savings account grow. And when we see our dollars grow, we become more conscientious in our spending habits. Taking care of self brings about a sense of freedom. If you find yourself in a difficult situation where you feel your values are challenged, you are more likely to say so if you have been taking care of your self in other ways. Regardless of degree of difficulty, or who person across from you happens to be (like your boss?), you will be truer to yourself and more direct with others. The act of self-care and financial responsibility promotes personal freedom.
| | Credit Enhancements: Seven Tips For Enhancing Business Credit TransactionsWritten by George A. Parker
What are avenues available to businesses with weak credit profiles or to companies pursuing credit transactions that are perceived as too risky by credit providers? Many companies apply for credit at banks, finance companies or equipment leasing firms and are routinely rejected due to high degree of perceived credit risks. When approaching a credit provider, it is helpful to understand what can be done to reduce risk of a credit transaction in eyes of provider. Never accept a credit rejection without considering credit enhancements. Here are a few tips on credit enhancement to help guide you in approaching credit process:1. Credit enhancements are modifications to credit transactions that improve risk-reward relationship for credit providers. Enhancements can be real or merely perceived by receiving party. Also, they can be tangible things like real estate and equipment or they can be intangibles like future rights or options. 2. Use credit enhancements to strengthen credit transactions and to improve pricing or terms. They may be used to entice credit providers to approve credit transactions that would otherwise be unacceptable because of perceived risks. They can also encourage credit providers to make transaction approvals faster. 3. Credit enhancements usually fall within one of these general categories: improvement in credit terms favoring credit provider; additional collateral; guarantees, insurance or third party assurances; increased pricing, compensation or upside gain potential; or granting of specific rights or options. 4. Some specific enhancements include: granting a security interest in additional equipment, real estate, inventory, accounts receivable, intellectual property rights or other company assets; pledging cash; pledging securities; third party guarantees; surety bonds; letters of credit; pledging cash value of insurance; increase in transaction rate; additional fees or other transaction compensation; shortening term of certain transactions; granting first refusal rights on future transactions; permitting call options; obtaining re-marketing guarantees or agreements.
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