How to Use Your Business to Reduce Your Tax Pain

tax-help-picture

Have you ever wondered what other creative business owners are doing differently to defer taxes and save for retirement? No, I’m not talking about a 401(k), SIMPLE IRA, or a SEP. I’m talking about a plan that affords you the opportunity to take advantage of large tax and retirement limits that aren’t typically available in traditional retirement plans.

If you haven’t heard already, you need to know about the cash balance plan, a defined benefit retirement plan designed for accelerated tax-deferred savings. For instance, in 2016, a 40-year-old employee could defer as much as $80,736 into a cash balance plan on top of their $18,000 deferral to a 401(k) plan. In essence, it allows this employee to pack away $98,736 in 2016 when a traditional defined contribution plan would have only allowed for a $53,000 contribution. The older the employee, the higher the maximum contribution. At age 50, an employee could contribute as much as $155,908 to a cash balance and 401(k) plan combined compared to the $59,000 traditional defined contribution limit. Wow!

So how do you know if it’s right for you and your company? Here are 4 basic things to consider:

  1. Your owners or key executives want to defer more than $53,000 a year into their retirement accounts,
  2. Your business has demonstrated steady profits,
  3. You are willing to contribute three to four percent to employees, and
  4. Your owners are age 40 or older.

There is also a solo cash balance version for small, closely-held businesses.

My name is Valerie Leonard and I’m your not-so-typical financial advisor who works with people just like you every day to help find creative business solutions that others often miss. If you want to learn more about whether the cash balance plan could help reduce your tax pain and save for retirement, let’s chat. You’ll want to know all the facts before going down this road, but I’d love to show you how powerful this strategy can be when designed and optimized correctly.

Hire Millennial Superstars – 10 Interview Questions

interview3When I work with business owners regardless of their industry, one of the issues that seems to cause deep frustration is hiring good employees. With the face of the workforce changing so drastically, hiring and retaining quality people is not simple.   You have to take into account the background of this newer generation and really explore what kind of person is sitting in front of you with their resume in-hand.   The average Millennial (person born between 1980 and 2001) does not stay at one job more than 23 months.   That rate of turnover is unproductive and costly to business owners.

interview1I have 10 interview questions that I suggest using when you are trying to recruit new employees. These questions should help you in identifying Millennial Superstars that will not only work hard for you but also stay around.

 1. If you were starting a company tomorrow, what would be its top three values?
Every good relationship starts with trust and aligned values. Insight into a person’s priorities — as well as honesty and integrity – usually emerge in the candidate’s answers.

2. Tell me about a time you were passed up for an award or promotion you felt you deserved.  Millennials can get frustrated if they don’t achieve quickly. Seeing how they respond to this question will give you an idea of their commitment and resiliency. Knowing up front that a person was shattered that he or she didn’t get a promotion in their first year of work at their last job gives you the opportunity to assess whether they will fit into your company’s culture.

3. Would you rather be an inventor or a leader?  There is no right or wrong answer to this question. It will simply help tell you where their passions lie and if they like to build things or build people. Depending on what the job is, you can determine the fit.

4. Who inspires you and why?  The job candidate’s answer often gives the interviewer a peek into who the interviewee models him or herself after. The response can also highlight the sorts of behavioral patterns the interviewee respects.  A response of Miley Cyrus compared to one of Princess Diana gives you a world of insight.

5. How do you like to receive feedback?  Millennials are a group that desires frequent positive feedback. Balancing this against your internal culture will be important. While baby boomers generally only desire a yearly performance review and Gen Xers like to hear feedback at least quarterly, the next generation needs much more constant and real-time praise and/or critique.

6.  Which book are you currently reading?  Passionate people tend to read books or listen to audio books to improve their skills. Whether the books are specific to a skill such as sales and marketing or they’re reading a book focused on self-development doesn’t matter, they are all good signs. If they’re reading a fiction book and haven’t read an educational book for a while, that’s may be a red flag. Superstars are always looking to better themselves, and the smartest people I know are always learning and absorbing new information.

interview27. Tell me about a time when things felt helpless but you knew you would pull through. Millennials are an optimistic group, and you want to be sure you are bringing that into your organization. Hire people with optimism and you will find they reach for big goals and try to change the future for the better. This question should be a deal breaker if they do not convey a positive attitude.

8. Give me an example of a situation when you worked in a diverse group with different opinions.  Millennials are the most inclusive generation, and it would be a flag if they did not have good examples of inclusive behavior and collaboration. I consider this to one of the best traits about our next generation. I am happy that my kids are growing up in such diversity.

9. Tell me about the volunteer or charity work you do.  The new generation is famously passionate about giving back, whether through missionary work, the Peace Corps, military service, or local charities. Giving and selflessness are hallmarks of great leaders. Having no answer here may indicate someone who is not very well-rounded.

10. “What do you think this job requires?”  While a Millennial may have a fantastic work ethic, and work harder than older employees, he doesn’t necessarily approach a job willing to do whatever it takes to get it done. The new age worker wants to know specifically what he is expected to do. He’ll also want to know when he can expect a promotion or a raise. The candidate’s idea of what it will take to do the job may be very different from what you know it requires. How many hours is the candidate prepared to work? Is he willing to take the time to learn new skills that the job will require? Be sure to give the candidate an idea of how long he would probably have to be at the job in order to get a promotion or a raise based on what it took the people who previously held the job to advance.

Sources:
http://www.inc.com/david-van-rooy/9-interview-questions-you-should-always-ask-millennials.html

https://www.entrepreneur.com/article/248524

https://www.mediabistro.com/recruit-hire/interview-candidates/4-questions-managers-must-ask-millennials-during-a-job-interview/

https://www.entrepreneur.com/article/241524

5 Tips for Winning at New Year’s Resolutions

winning at new years resolutionsJust yesterday when chatting about turning the page to 2016 a friend said to me, “I can’t believe it’s been a whole year since I didn’t become a better person!”

Ok, here’s the thing.  We all have something we really want.  We think about it often, it’s in the back of our minds every single day in some way or another and it’s very personal to us.  Getting fit and healthy perhaps?  A new business endeavor?  Organizing your life?  Spending less and saving more?  Enjoying more time with friends and family?  Simply put, one of two things have happened – we’ve either made a conscience choice not to pursue our goal or we’ve likely failed before at trying to achieve it.

If you’re contemplating a New Year’s Resolution for 2016, you should know that scientific research tells us you have a 92% chance of failure*.  So what are the winning 8% doing successfully?  They’re throwing glitter at the new year and kicking adversity in the face!  Here’s how:

  1. They Want It! Sometimes we just think we want something, a stark difference than truly wanting it. Other times we think we should do something because of outside influences but we don’t actually want to do it. Start by asking yourself, am I making this resolution just because…or do I want it so badly I will sacrifice whatever it takes to make it happen?
  2. They have their priorities straight. When looking at your life, you need a list of your top five priorities. Write them down right now. Seriously. Write them down. If your resolution doesn’t fit into the top five, you’re going to have a tough time achieving it. Consider focusing on another goal that is perfectly aligned with one of your priorities.
  3. They are confident their goal WILL be achieved. Research indicates that the winning 8% have a higher degree of confidence than those who eventually fail. You should consider your confidence level. If you are not at least 70% convinced you’ll make it happen, it’s not worth your commitment or energy.
  4. They don’t tell anyone about it. Numerous scientific studies dating back to the 1920s support the idea that you should keep your resolutions to yourself.   Seems backwards from what we’re taught, huh? And it’s not just about self-accountability. Think about the feeling and emotions that would come from telling your friends your goal has been achieved. It’s a euphoric idea, isn’t it? Science tells us that when we share a big goal with our friends, your mind is tricked into thinking it’s already been reached.   When your goals are acknowledged by others, it feels real to your brain – like social substitution for that euphoric state. Moral of the story, don’t Facebook your resolutions this year!
  5. They embrace the power of positive thinking. We all have a choice to tell ourselves we will succeed or tell ourselves we won’t. As one of the most victorious Biblical characters, David said, “For as he thinks within himself, so he is,” Proverbs 23:7. When establishing a new habit your first step should be to create an ongoing practice of constructive thoughts. A pattern of negativity will simply squash your big plans.

I’d love to share more ideas with you on living a life on the north side of average!  Subscribe and share today!  Happy New Year to you!

*John Norcross, University of Scranton, 1985

Who’s the Ying to Your Yang?

Balance is everything
Balance is everything

In business and in life, balance is one of the hardest things to achieve.  We are being pulled in different directions at any second of the day.  Whether it’s keeping up with e-mails, marketing ourselves, handling customer phone calls, keeping the books up-to-date, prospecting, managing employees, tracking and analyzing results, ensuring quality control of our products or services, planning for future growth, managing risk, and the list goes on and on and on, it’s easy to feel overwhelmed!  Maybe you feel that way right now?!?

If you’ve been blessed with a great spouse, you understand how having someone to balance you can be the secret to holding it all together.  If not, you get that failure is not an option because who else would pick up the pieces if you drop the ball?  Owning a company isn’t really that different if you think about it.  Going solo can mean tremendous pressure.  Having the right partner, however, can be the key to incredible success!

Take my financial advisory practice for instance – my business partner, Trent, balances me in every area I need it.  Not only do Trent and I share in the workload, we also get to bounce ideas off of each other.  If we have an issue, we can rely on each other to work through it.  If we have an idea, we serve as each other’s filter and can easily play devil’s advocate to ensure an idea actually makes sense.  When we are ready to run, it’s more like a relay than a sprint with a cheerleader always on the sidelines.  In a world where you can’t be everything to everyone, we are free to specialize and come together to provide a deeper and more well-rounded level of expertise and service.

Partnerships do take work, but they can be extremely effective in balancing your business, your life, or your projects.  Stick around and we’ll explore some more tips on how Trent and I have achieved an incredible partnership, and I’ll also share how my husband, Rob, and I work together in his window treatment business in the same way.  But I’m curious…what questions do you have about partnerships that you’d like us to explore first?