7 Reasons Why It Pays to Own Your Own Business

With unemployment still high, more people are choosing to start their own businesses. Fortunately, thanks to innovations in technology, this is a lot easier than it used to be. Here are some of the benefits of owning your own business:

1. Low overhead

Working from a home office can save thousands of dollars in rent and commuting costs, which makes start-up expenses more affordable.

2. Tax advantages.

Using part of your home as your place of business means many of your household expenses may be deductible.

3. Supplement your existing income.

Since you’re working from home with low overhead, you can earn extra income without quitting your day job. By investing this extra cash in real estate, mutual funds, etc., you can move yourself closer to financial security.

4. Increased confidence.

Imagine how good you’ll feel about yourself after building a successful new business all by yourself!

5. More freedom.

You have the flexibility to set your own schedule and hours, so you can fit in child care, fitness and social activities more easily.

6. Less bureaucracy.

You have no boss or co-workers, and there are fewer interruptions so your productivity can be higher.

7. Career mobility.

Since you can move your business anywhere, you can accommodate a spouse’s transfer, live close to family or choose

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Good Debt vs. Bad Debt – What’s the Difference?

As you’ve seen in the news, more and more people are getting swallowed up by debt. One of the keys to financial independence is to get rid of bad debt and acquire good debt. Bad debt is debt that makes you poor. This is consumer debt, like credit card debt and car loans. Good debt is debt that actually works for you. The best example of good debt is a mortgage on a rental property that earns positive cash flow every month. Good debt is money that you borrow to purchase assets that put money in your pocket!

5 Steps to Eliminate Bad Debt and Acquire More Good Debt

Working from a home office can save thousands of dollars in rent and commuting costs, which makes start-up expenses more affordable.

1. Stop accumulating bad debt. Whatever you purchase via credit cards must be paid off in full at the end of each month. No exceptions.

2. Make a list of all your bad debt, including credit cards, car loans and any other consumer debts.

3. Refinance your mortgage to consolidate your high interest debts. Chances are you’ve built up enough equity in your home to pay off your high interest credit cards and consumer loans. Your mortgage advisor can help determine how much equity is available and how much you can save by increasing your mortgage balance to pay off bad debts at lower interest rates.

4. Explore the option of using additional equity in your home to increase cash flow. After you consolidate your bad debts, you may still have equity left over to invest in a secure cash flow producing asset. For example, the equity could be invested in a dividend fund, and the income could be reinvested or withdrawn every month.

5. Pay yourself first. Every time you get paid, deposit a percentage of that money in a savings account, and don’t take it out until you’re ready to invest it. Then, instead of paying creditors, you’ll be purchasing assets that create a positive cash flow every month!

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