😉🐶 Towards Achieving Financial Freedom...

🌅 Hello and welcome! 

In this week’s Financial Stuff:

• 🐶Puppy love?

• 🎯Achieving financial freedom.

• 🤔 Business vs Property.

👇 Let’s get started…

The Carden family is in a state of high excitement…

…because a beautiful red fox labrador puppy will be arriving in September!

If you’ve ever been through the puppy procuring process, you’ll know that it is an emotional rollercoaster 🎢.

And it got me thinking that emotions play a crucial role in all our decision-making processes, whether we're deciding to get a puppy or making an investment.

Both scenarios are fraught with emotional influences and behavioral biases that can lead to suboptimal choices. For example,

Confirmation Bias: When deciding to get a puppy, people often focus on positive stories and ignore potential challenges.

Investors exhibit similar behavior by seeking information that confirms their existing beliefs, leading to skewed decision-making.

Herd Mentality: The influence of others can heavily impact decisions. Just as people might get a puppy because their friends have one, investors might follow market trends or click bait articles, without thorough analysis, often resulting in poor investment choices.

Expectations vs. Reality: After the initial excitment has died down, new puppy owners often face a reality that is more challenging than anticipated.

Investors, too, may find that their investments do not immediately perform as expected, or market volatility can cause stress and anxiety, leading to disappointment and irrational decision making.

Recognizing these biases is the first step toward mitigating their impact, whether as a new puppy owner or as an investor!

I have done a LOT of research on labradors and I have also warned experienced friends that I will be seeking their help and support to train my new labrador puppy when she arrives.

The same applies to investing. It’s good to understand the basics about investing and the markets, together with the way emotions might affect your decision making.

And working with an experienced financial adviser can also help you make more informed, rational decisions, leading to better outcomes and less stress.😉 

🎯BUSINESS OWNERS STRATEGIES
Achieving Financial Freedom: a guide for UK business owners.

As a UK business owner or entrepreneur, securing financial freedom and independence from your business is a critical goal.

A recent report by Scottish Widows reveals that 38% of people are now on track for living standards in retirement below the minimum level set by the Pensions and Lifetime Savings Association (PLSA).

This is an increase from 35% in 2023, translating to an additional 1.2 million individuals at risk of facing poverty in retirement.

This trend underscores the importance of mindful retirement planning, especially for business owners who often face unique financial challenges.

Business owners often rely heavily on the ongoing profitability of their business for future income. But this can be unpredictable.

To mitigate this risk, it's essential to diversify and build financial security outside of your business.

Start making significant company pension contributions. Increase them regularly.

If another family member, a spouse or child, is employed by the business you can also make significant company pension contributions for them.

Don’t just use the company workplace pension. Choose the right pension plan for you, such as a Self-Invested Personal Pension (SIPP) or a Small Self-Administered Scheme (SSAS).

Ensure your pension fund invests in a diversified investment portfolio.

Regularly assess and rebalance it to maintain the best balance of risk and return.

Get help from an experienced financial adviser if it’s not your area of expertise or you don’t have time to give it proper attention.

Many business owners have substantial wealth tied up in their business.

Developing a well-defined exit strategy is vital for unlocking this value.

Whether through a gradual sale or passing the business to a family member, the timing and terms of this transition should align with your retirement goals.

This strategy helps ensure financial security and a smooth transition into retirement.

If you have maxed out on pension contributions and still have surplus profits, corporate investments can defer gains for corporation tax purposes.

Don’t leave cash languishing in a current account.

Achieving financial freedom as a business owner requires a combination of strategic planning, diversification, and thought-through management of both personal and business finances.

By implementing these strategies, you can secure a prosperous retirement and maintain financial independence from your business.

🤔 MARKET INSIGHTS
Business vs Property.

😎AND FINALLY
This week on Youtube

With the 31st July just around the corner - meaning tax to pay, in this week’s video, I’m talking about tax on dividends. And how to get around the problem that happens a lot where business owners forget to set aside the inevitable tax when they take dividends taken as remuneration.

That’s all for this week! Hope you enjoyed reading and if you have any questions at all, drop me a note.

Hilary 😎

P.S. GET SMARTER IN LESS THAN 5 MINUTES!
I upload a super short helpful financial video on YouTube every week -

you can check out my channel here!

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