If you run your own business, chances are your personal finances are often bottom of your lengthy to-do list. In fact, we’re willing to bet that particular entry has been shunted down your list of priorities on more than one occasion.
And yet, even when organising your finances does make it to the top of your list, being successful in your career doesn’t automatically mean you’ll know how to best manage your personal wealth and financial needs – because running a business and managing personal finances are two different worlds.
At Ascenta Wealth, we’ve spoken to hundreds of senior execs, business owners, and entrepreneurs who are brilliant at what they do. However, when it comes to pensions, retirement planning, or cross-border tax, they’d rather have expert guidance.
Read on for five top reasons to team up and work with a financial planner.
1. Draw a line between business and personal finances
When you’re busy running a business, there’s little time to consider or manage your personal finances.
You may know you’re making a profit, but when it comes to spending it can be easy to blur the lines between what belongs to the business and what belongs to you.
If this is a problem area for you, one of the first things a financial planner will do is to establish clear systems, creating clean delineations for your business and personal finances.
If you’ve been muddling your way through, this single manoeuvre could bring an enormous sense of relief.
2. Put your money to work
In our line of work, we come across many business owners who have vast sums of cash sitting in the bank earning very little interest.
Maybe you can relate. Indeed, you may be accruing more and more money every month.
It’s not unusual for entrepreneurs to enjoy a sense of achievement and relaxation from having a healthy cash cushion, especially if the figure reliably increases each month.
However, if you have no immediate plans to spend the cash, you may be better off investing the excess cash and put it to work.
We can help you understand all your options, looking at both medium- and long-term investment opportunities that align with your goals.
We’ll ensure you retain enough cash on hand to cover planned spending and emergencies, investing surplus cash to ensure it’s not left to languish in low interest accounts any longer than necessary.
3. Implement appropriate tax planning and advise on cross-border issues
Tax planning is a natural part of what a good financial planner can do for you.
At Ascenta Wealth, many of our clients are internationally mobile families from the UK, Australia, India, and elsewhere in the world. As such, we take a global approach to financial planning, and are well positioned to advise on cross-border tax issues.
With knowledge of immediate and future tax implications – both in Singapore and your home country – we can help you understand where you could make savings, and organise your finances to avoid you having to pay too much tax.
4. Put a contingency plan in place ready for unexpected events
Planning for unexpected events is a vital part of what a great financial planner will do for you.
This could include:
- Lifestyle and debt maintenance, to provide some protection in if you’re unable to work for an extended period of time
- Provision for your family in case you die unexpectedly or are diagnosed with a serious illness
- Arrangements for business continuity and protection for your business partners, in the event of death or serious ill-health.
We’ll also cover the protection needs of your business. For instance, key person insurance can support business continuity in the event that you or another vital member of staff should suddenly be unable to work due to ill health.
5. Help you plan ahead for the long term and your eventual retirement
Hopefully, you’ll have found time to arrange a pension, and already be making regular contributions towards your retirement fund.
Your long-term plan may be to sell your business and fund your retirement with the proceeds. Alternatively, you may be building it up before letting someone else run things once you’re ready to step back.
On paper, this may seem like a sound strategy, but extracting money from a business isn’t always straightforward.
Whatever your long-term plan, choosing the right financial planner early can provide valuable time to devise a bespoke strategy, helping to ensure you’re able to enjoy life now, and in retirement.
While making regular pension contributions is a sensible move, as a business owner, there are alternative options you may wish to consider.
For example, if you have any cash tied up in your company, you could pay excess sums in to your pension or an investment portfolio. Doing so could maximise tax efficiencies, and potentially generate greater returns over a longer period.
We’ll also review your existing pensions and investments, to ensure they map onto your personal risk profile and long-term goals. And make sure funds are invested to maximise potential growth over your prescribed time horizon.
Your Ascenta Wealth financial planner will form a strong working partnership with you
Taking on all of the above, and more, we’ll arm you with all the information, support, and practical advice you need to help you make the best possible decisions.
While you focus on what you do best, we’ll help make sure your finances are aligned with the life you want to achieve now and in the future.
