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How Insurance Can Calm the Entrepreneur by @LundeenAbrams

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by Suzanne Lundeen Abrams | Featured Contributor

Lundeen Abrams Advisors

Lundeen Abrams Advisors

“The best-laid plans of mice and men often go awry.” -Robert Burns

I often feel running a business is like riding a roller coaster. Ups. Downs. Exhilaration. Fear. Doom. Elation. Can you relate to this at all?

I find this chart hilarious and oh so true for my personal business trajectory. Some days things just don’t go the way you hoped they would and you just have to keep your head up and push through knowing it will get better.

As a financial planner and insurance expert, I have special knowledge in preparing for the unexpected and it’s given me a leg up as I’ve set up safety nets for myself, my family, and my clients. Therefore, I have confidence that no matter what happens, my business, my clients and my family are protected in times of crisis. Do you want to have this type of confidence too? Let me share some ways you can prepare your business for the unexpected by using insurance.

How Insurance Can Calm the Entrepreneur

Simply put, insurance is a way to hedge risk by using leverage. One of the biggest risks business owners face is the loss of their own ability to work. If you or other key people in the business can’t show up due to death or disability, for example, does the ship go down? How do you calculate your own personal value? You are priceless and irreplaceable and no amount of cold hard cash can remove the emotional tragedy of losing you. Your family, clients, and employees count on you. You can’t guarantee you’ll always be there but you can plan ahead and set up a financial safety net and a succession plan to make things go as smooth as possible, with or without you.

There are various ways to use life insurance in your business to help you protect and prepare for unexpected circumstances. The plan you put in place will be unique to your own business.

3 Common Uses for Life Insurance in Business:

  1. A Personal Life Insurance Policy helps your family pay off any business debt and get the cash they need to replace your income. It buys them time to handle decisions about the business succession. If you pass away, who’s going to run the business? Who’s going to take over all the responsibilities?
  2. A Buy-Sell Agreement (also called a buyout) is a contract that business owners use to protect or continue the business in case of unforeseen circumstances such as death, divorce or if a partner wants to exit the business. It’s like a pre-nuptial for your business. The terms are agreed upon in advance so it’s a fair deal for all parties. Emotions in the heat of the moment can make the deal seem unfair so it’s best to have terms decided in advance when heads are cool and calm. Life insurance provides the cash needed to buy out the partner(s) at the agreed-upon price.
  3. Key-Person Insurance pays the owner or owners of the business a specific amount if a key employee were to suddenly die. Replacing a key employee takes time and can cost a business valuable clients during the transition. The death benefit paid to the business-owner at the time of a key person’s death helps to cover financial losses incurred in the business. The policy’s cash value may also be available as a loan or withdrawal during the life of the policy.

Buying life insurance policies for yourself, key employees and business partners is an important component of succession planning. Proper planning assures continuity for customers, creditors and employees. Make it a priority to review your business succession plan with a trusted advisor so you have total confidence that even if things don’t go as planned, everyone who counts on you and your business will thrive despite grieving what is absolutely priceless and irreplaceable: YOU.

The highs and lows of running a business can test the strength of even the most seasoned entrepreneur. It’s important to solidify your business succession plan and fund it with insurance so all your sweat equity doesn’t go to waste if you’re no longer there to steer the ship.

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Securities offered through Securities America, Inc., a Registered Broker/Dealer, Member FINRA/SIPC,

Suzanne Abrams, Registered Representative. Advisory services offered through United Advisors, LLC,

a SEC Registered Investment Advisory Firm, Suzanne Abrams, Investment Advisor Representative.

United Advisors, LLC, Lundeen Abrams Advisors and Securities America are unaffiliated.

 

*The opinions and forecasts expressed in this piece are those of the author and may not actually come to pass.  This information is subject to change at any time, based on market and other conditions and should not be construed as a recommendation of any specific security or investment plan.  Past performance does not guarantee future results.

All material contained herein is for informational purposes only. This is not a solicitation to offer investment advice or services in any state where to do so would be unlawful. Past results are no guarantee of future results and no representation is made that a client will or is likely to achieve results that are similar to those shown. Please refer to disclosure document for additional information and risks.

 

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How to Set Financial Goals Like a Boss by @LundeenAbrams

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by Suzanne Lundeen Abrams | Featured Contributor

A recent Prudential white paper on Women and Retirement[1] cites a study that found the average retirement account balances of women were 1/3 lower than those of men. That is a data set of 401k-type plans but as female entrepreneurs, we are responsible for setting up our own retirement plans.

So many questions arise when these facts sink in: Do you have a retirement plan set up for your business? If you do have a retirement plan, are you contributing to it? Let’s face it, many of us are not where we should be with money and investing. We can and must do better than this!

As a financial planner, I give people advice and, of course, we’re all in different places and stages with our money but there is one simple way to shift to a better place and it’s applicable to everyone. No matter how your financial life is now, setting goals will push you to a better place in the future.

Six Steps to Financial Goal-setting Like a Boss

  1. Dreaming, Supersized: In the words of the fierce female founder, Cindy Gallop, setting out to make tons of money in business is a good place to start… but don’t stop there!
  2. Clear Goals: Break it down and clarify your money goals and what you must do to accomplish them. Only 1/3 of women have a clear set of retirement goals so be sure to think beyond the next ten years. 
  3. Time Travel: Think of yourself as an 80-year-old. Get this: According to Sarah Newcomb, a behavioral economist at the investment research firm, Morningstar, the most important economic factor of financial health (regardless of income or gender demographic) is how far ahead in time someone is thinking. In her studies, she found that the people who were thinking 10 years ahead or more, had significantly more saved up for retirement than those who weren’t thinking as far ahead. Studies have also shown that through visualizing ourselves as an older person, (or actually seeing age-enhanced images of ourselves) we will save more. How interesting that women typically respond with a natural desire to care for others—except when that older, wiser, more wrinkled person is us!
  4. Please Yourself: This is not about pleasing others. It’s all about you. What do you want? Danielle LaPorte’s Desire Mapping has been a helpful compass for me in designing my goals. After all, the satisfaction we seek comes from the way we feel once we’ve hit the target. How do you want to feel? What do you need to do to get that feeling? Take lots of time to reflect on this because it’s really the most important part. A goal comes down to desire. Sexy, right?
  5. Write. It. Down.: Studies have shown that people who set goals and actually write them down are three times more successful than people who keep them in their head. Visualizing your goal happening is effective. You need to have faith and believe you will achieve it. Be sure to keep track of your progress and celebrate mile-markers along the way.
  6. Find Your Tribe: Asking for help is important. Having good partners is everything. Getting the right person in the right seat is smart on paper but if you’ve ever had to remove someone via firing or divorce, for example, you’ve likely found it challenging to execute this critical measure in real life. In her book, Lean In, Sheryl Sandberg emphasized her husband was key to her successful track in business. We all need support to reach our goals. Do you have any trusted advisors to help you chart your course? Who are the people who will hold you accountable for the goals you set? Your spouse? Your best friend? Your financial advisor? Know who’s in your court and if there are seats to be filled within your entourage, network to find the collaborative partners who will keep you on your mission, encourage and support you.

The future is bright for female entrepreneurs because we’re on top of our game when it comes to the key ingredient to financial success: #GOALS. Now be sure to incorporate your business retirement plan in your goalsetting. Your future-self will thank you!

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Securities offered through Securities America, Inc., a Registered Broker/Dealer, Member FINRA/SIPC,

Suzanne Abrams, Registered Representative. Advisory services offered through United Advisors, LLC,

a SEC Registered Investment Advisory Firm, Suzanne Abrams, Investment Advisor Representative.

United Advisors, LLC, Lundeen Abrams Advisors and Securities America are unaffiliated.

 

*The opinions and forecasts expressed in this piece are those of the author and may not actually come to pass.  This information is subject to change at any time, based on market and other conditions and should not be construed as a recommendation of any specific security or investment plan.  Past performance does not guarantee future results.

All material contained herein is for informational purposes only. This is not a solicitation to offer investment advice or services in any state where to do so would be unlawful. Past results are no guarantee of future results and no representation is made that a client will or is likely to achieve results that are similar to those shown. Please refer to disclosure document for additional information and risks.

 

[1] Prudential Retirement analysis reflecting defined contribution plan balances of Prudential record-kept plans as of December 31, 2015.

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Financial Planning As Self-Care by @LundeenAbrams

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by Suzanne Lundeen Abrams | Featured Contributor

I suggest women reverse the golden rule and treat themselves as well as they treat others.” -Gloria Steinem

Entrepreneurs give everything to their business: Customers come first! This way of thinking comes easy to an entrepreneur. In everyday life, women often prioritize the needs of others and in so doing, postpone or neglect critical self-care. Taking care of ourselves as women, is important but that doesn’t mean it comes naturally.

As women business owners, we need to schedule it in or it doesn’t happen, right?

Scheduling “Me Time”

When we think of self-care we tend to think of stress relief: bubble baths, mani-pedi’s or gab-fests with our girlfriends. Personally, I love a little retail therapy, although paying the bills a couple weeks later can create a vicious cycle. Many of our go-to self-care approaches cost money.

Does thinking about finances stress you out? I think we all carry some anxiety about money which can backfire when what we need is a little self-care to undo all the other stress of giving and caring for others first.

Life is expensive and it gets more complicated when you’re running a business and the number of people counting on you increases – employees, customers, family members, etc.

Taking time out of life to decompress is important. Did you ever consider the fact that financial planning can be a great stress reliever, too? When you take time to plan for the future and get your ducks in a row, financially, you’re actually taking care of your future-self.

So schedule time to sit with yourself and think about your financial life. Reflect on where you are now and imagine how you’d like things to be in 5, 10, or even 20 years down the road. We need to carve out time in our busy lives to think about what we’re actually trying to accomplish.

Bring a pen and paper because someone has to keep notes for the meeting.

Honing Your Financial Physique

Establishing specific goals allows you to focus on what is most important and helps you avoid distractions that can sidetrack your good intentions. Every time we spend money we should ask ourselves, does this align with my financial goals or is it diminishing my capacity to fund my goal?

We live in a world where instant gratification is not only common, it is expected! Resisting impulsive consumerism takes self-discipline and focus. Budgeting is difficult. It means saying no to things we may want now so we can have more of what we really want later.

The discipline needed for physical health and wellness is similar to financial fitness and I believe women deserve a ton more support in the financial realm. Here in the U.S., it seems the size of our booty is far more important than the shape of our financial lives. Women are bombarded with messages that teach us from an early age that our physical beauty is our most valuable asset.

Financial Fitness as Self-Care

Financial Fitness as Self-Care (custom illustration by Jayde Perkin)

We may, indeed, be total knockouts – but even Helen of Troy’s beauty could not rival one of our most powerful tools as women: our wealth.

You may not feel wealthy but let me assure you, your wallet or purse – be it Coach or Mossimo – goes everywhere you go and how you use it matters.

In the U.S., women hold nearly 40% of the nation’s investable assets: $11.2 trillion.

Globally, women hold 27% of the world’s wealth: $20 trillion.

We have some weight to throw around, right?! Well, hold up…

Women face unique financial challenges which makes managing our money effectively that much more important.  

Top 5 Factors that Hold Women Back Financially

Many of these factors seem largely out of our personal control because they’re deeply embedded in our culture so we can either make lemonade with the lemons we’ve been served or work on changing the culture. It’s not all sour lemons, though.

Living longer sounds like a very good thing to me! 

Live Long and Prosper

The Gloria Steinem quote above that inspired me to write this post is from Jean Chatzky’s recent #HerMoney podcast. Jean asks Gloria about her plan to live to 100 (or 110) and Gloria’s quip back to Jean was priceless, “I have to, just to meet my current deadlines.” Spoken like a total GirlBoss. When we set our minds to achieving something, nothing can stop us.

Whether you live until 80, 90, or 110, the cost of living and care you’ll likely need will be inflating from now until then. Stashing away more money now and investing for the future of your dreams is simply good self-care.

Reverse the golden rule in your financial life and commit to treating your future-self the way you’d really like to be treated.

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Securities offered through Securities America, Inc., a Registered Broker/Dealer, Member FINRA/SIPC,
Suzanne Abrams, Registered Representative. Advisory services offered through United Advisors, LLC,
a SEC Registered Investment Advisory Firm, Suzanne Abrams, Investment Advisor Representative.
United Advisors, LLC, Lundeen Abrams Advisors and Securities America are unaffiliated.
*The opinions and forecasts expressed in this piece are those of the author and may not actually come to pass.  This information is subject to change at any time, based on market and other conditions and should not be construed as a recommendation of any specific security or investment plan.  Past performance does not guarantee future results.
All material contained herein is for informational purposes only. This is not a solicitation to offer investment advice or services in any state where to do so would be unlawful. Past results are no guarantee of future results and no representation is made that a client will or is likely to achieve results that are similar to those shown. Please refer to disclosure document for additional information and risks.

 

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