Archives for January 2017

When you’re in the process of getting your small business off the ground, you might be tempted to cut costs. It’s true: starting a new business is expensive. The Small Business Administration (SBA) estimatesthat new business owners spend an average of $1,000-$5,000 for a home-based franchise. In 2009, the Kaufmann Foundation said the average start-up cost as much $30,000.

There’s a disparity in these findings, so let’s say that the average small business costs somewhere in the middle, say at $15,000 to start.

This may seem low-cost, but keep in mind that this is only to start the business, not to keep it going. Also know that most Americans have less than $1,000 in the savings account, so starting a business would be a huge financial undertaking. If the business should fail, the small business owner doesn’t have their personal finances to fall back on.

Location is everything when it comes to business – any business. If you have successfully started your business and survived your first year (or first couple of years) in the market, then you might be looking to expand your business by relocating to another location. Perhaps to a more populated part of the city?

Or maybe you want to transfer to a bigger place. Whatever the case, a new location meant several adjustments and a capital. If you’re currently looking to finance your relocation plan, you can apply for a small business loan. Now ask yourself these important questions:

• Will the new location contribute to the success of your business?
• What type of location will best fit the type of your business?
• How much rent can you afford? Or how much capital will you need?
• Is the location appropriate for what you plan to offer/do there?

Now let us tackle each question one by one.

Just like wealth inequality, different asset classes have tax inequality. That is to say, different asset classes are taxed at different rates depending on what they are and how long they are held. As investors, we want to maximize our returns. Limiting the amount of taxes we pay on our returns is one way of doing so.

 

That’s why tax efficient investing is so important. If you are not investing tax efficiently, you are basically giving away your hard earned money to the government. However, in order to understand tax efficient investing, we need to first learn how investment income is taxed.