Your business assets are essential to the functionality and future of your business and therefore as an employer you should do everything possible to protect them against unexpected circumstances.

This article will guide you through what exactly constitutes an asset, why you should protect your assets and most importantly, how you can protect your assets.

What is an asset and why you need to protect your assets?

An asset has a physical form that is tangible such as money and other valuables belonging to the company including inventory, supplies, equipment, land and buildings. While insurance does provide an amount of security it fails to shield your assets from all threats and eventualities.

Insurance policies are limited in what they do and do not cover and how much they will pay if something happens. With the downturn in the economy and the current economic climate, insurance cannot protect against economic hardships. However, insurance is not designed to protect you or your business from a downturn in the economy and if you are unable to pay your bills, it could lead to the repossession of your business assets by the creditor.

Owning and operating a small business comes with great responsibility and accountability. Even if you operate with the utmost care and provide an unrivalled service, a client may perceive your actions as wrong and ultimately bring you and your business to its knees. Knowing what risks your business may face and how to minimize the threat from loss will give you the chance to run your business successfully and guarantee its future.

How to protect your assets

• Liability Insurance

Liability insurance protects your business against the possibility of a lawsuit or asset damages and will normally cover the damages from the lawsuit and legal fees. Depending on your business needs, a number of different liability insurance can be purchased such as, general liability insurance, professional liability insurance and product liability insurance.

One form of liability insurance you will need to have by law is employers’ liability insurance. As it is a legal requirement, it is vital that you have the correct cover as if not, you could be prosecuted. Look at AXA employers’ liability insurance to find out more information and what it protects you against.

• Limited Liability Corporation

One method to ensuring the protection of your personal assets is by creating a Limited Liability Corporation (LLC). An LLC is the formation of a corporate structure whereby the members of the company cannot be held personally liable for the company’s debts or liabilities and therefore protecting your assets and your future.

• Landlord Insurance

Unforeseen circumstances such as fire, floods or a lawsuit can destroy or significantly affect you and your business and reputation. Insurance is designed to compensate you from loss from an occurrence such as a fire or a lawsuit.

AXA landlord insurance is just one of the ways you can protect your building as it provides protection for your building against flooding, burst pipes, broken windows or fire damage and will protect you from being victim to major losses.

Protecting your business assets is essential to both your own personal future and the future of your company. Although you cannot prepare yourself for unanticipated circumstances, by ensuring you have correctly protected your assets, you will limit the damage caused to your business.

Make sure to find the right cover for you and your business and protect yourself against any eventuality no matter how unlikely you think it is to occur.

Not all debts are the same. While some debts actually help develop your asset base and can make you wealthy over time

Replacing bad debt with good debt can take many years of concentrated effort. It is much easier to make correct debt decisions from the outset.

Debt habits form and early age

We learn spending and saving habits from our parents. If we have come from a family that did not believe in investment, a family that was always struggling with debt, always short on money, it makes it far more difficult for us to make wise financial decisions in our early 20s. Everyone needs to have a role model when it comes to money management.

Too many young Australians borrow to pay for holidays, jewellery, weddings and the like. We regularly witness the fallout of unwise debt decisions made in their early 20’s still haunting people in their late 30s.

Our banking system encourages people to live beyond their means. We are offered credit to enjoy things today and pay for them later. Borrowing for a wedding leaves you with a great photo album and a video, and a crippling debt problem to grapple with for years to come. Unfortunately some wedding loans have a longer life-span than do the marriages they financed.

Budget before spending

Any successful investor knows the importance of budgeting. Unless you come from a very wealthy family where access to funding is pretty much unlimited, choices need to be made and money needs to be assigned to “essentials” and the “nice-to-have”.

A budget is a financial plan of how you intend to spend the money that you earn. If you are left short after you have assigned money to your expenditure categories, you clearly need to either find ways to increase your income or reduce your expenses.

It is indeed that simple. If you would like to buy a house by the time that you are 30, a deposit will not magically appear in your account when you turn 29. If you do not put a budget together that allows for you to put some money away towards a deposit every year, it will not happen.

Budgeting helps to make sure that the money that you need to pay for rent, utilities, food and entertainment is set aside and available. Budgeting helps highlight if you are running out of money and assists one to plan for upcoming larger expenses such as a holiday or a wedding.

Effective use of credit cards

Credit cards are a great money management tool. They offer borrowers access to free money for up to 50 days. That means anything you buy on credit, will cost you no interest if you pay the card off in full every month.  Anyone who does not pay out their credit cards in full at end of the month is either living beyond their means today or did so some time in the recent past.

If you use credit cards but pay them out at the end of the month in full, then you are demonstrating that you are in control of your money.

If your credit card balance is not being paid out but is in fact increasing, then you are the kind of credit card customer that card providers love. They can count on you contributing lots of money to their bottom line.

The rules with credit cards are simple, if you can not pay it off by end of month, do not buy it!

Borrow to invest

An investment is any asset purchase that you expect to grow in value over time. Most people think of shares or real estate as an investment. However an investment can also be a piece of art or antiques.

The rule with borrowing to invest is clearly the increase in asset value plus any income that the asset is expected to generate over time should exceed the costs associated with its finance.

There is nothing wrong with investment debt. Because this is the debt that helps you grow your asset base and your wealth.

However even with investment debt one needs to be very prudent.

Borrowing with a small deposit can leave you trapped in your current mortgage, unable to refinance to a different lender for a better deal. This is the situation currently facing many Aussie homeowners who bought their homes on 5% deposit during 2008 and 2009. Most of these properties are today worth less than the mortgage debt secured against them.

Those unlucky enough to lose their job while living in a house with negative equity can quickly see their debt problems multiply. If you need to sell the house because you can no longer afford to cover your mortgage payments, there is very likely to be a significant shortfall.

We speak to people who have gone from being homeowners to having no home and being in debt to the bank to the tune of $30,000 after their property was sold. This can be a very hard debt to repay and can push families into bankruptcy.

 Debt Problems?

If you have hit hard times and are finding it difficult to keep up with debt obligations, speak to your credit providers and seek special hardship consideration to help you catch up and recover. Credit providers have a legal obligation to do what they can to assist borrowers experiencing financial hardship.

Looking for assistance from debt consolidation professionals to help you get out of a difficult situation? Please give us a call on 1300 Debt Solutions or visit our website at www.debtsolutions.com.au
photo credit: Images_of_Money via photopin cc

Developing good savings habits with money will lead to a better budget, more savings and greater investments for your future.

This video appeared at Humble Investors and was presented by Darren Wright

The advice in this short video is simple but very effective – Enjoy
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It is crucial to ensure your assets are in order, at all times.

There’s no way of knowing when a terminal illness may strike, so it’s worth ensuring that your assets are organised and protected at all times. I mean, why would you? You are young and healthy- getting sick is the least thing on your mind right now.

However, as with anything in life, nothing is guaranteed and you can bet your bottom dollar that something will happen when you least expect it.

So what should you do? Here, the experts at www.cheselden.co.uk have put together a helpful guide:

Get a will

The first step is to make sure that your will is up to date. Without a valid will, your estate will automatically pass to your spouse if you’re married, or to your children if you have them; or to the closed living relative. If there is no will and no-one had a legal claim to your estate, your assets will revert to the state.

Having a will means that you can specify who you would like to inherit your assets, and also allows you to divide your assets between multiple persons. This can be especially useful in avoiding Inheritance Tax, which may apply to estates with a value of greater than £325,000.

So if you don’t want your assets to automatically pass to someone, you need to get it down in writing.

Record everything you own

Your estate consists of the value of your assets, minus the cost of your debts. If you die, the beneficiaries of your will cannot receive anything until a Probate has been issued, confirming the net value of your estate.

Probate settlement can sometimes take years, especially when the deceased has failed to keep accurate records. You can help to avoid this by making sure your records are in good order right now. Make a list of everything you own, including property, savings and investments.

Make a similar list of all outstanding debts; this will give you an idea of what you might leave behind, so that your estate might be settled quickly. Gather and file all paperwork relating to these items and store them in a secure location.

Try to make it as easy as possible for someone else to get their hands on the relevant information. If it is locked by a password or key, ensure that a trustworthy loved-one has access.

After all, you wouldn’t want to pass with the knowledge that your loved-ones are going to have to fight tooth and nail for several years, simply because you failed to record your estate accurately?

Don’t forget your pension

Remember that your pension is also an asset. You can nominate a beneficiary to receive your tax-free lump sum, if it has not already been claimed.

Additionally, it is important to know how to cover your care home fees, so that your assets are protected.

The article was written by Cheselden, the UK’s leading continuing care review specialists.  They are the only company with a panel of clinical experts dedicated to continuing care claims, so if you believe that a loved-one has wrongly paid care home fees, you can claim it back- even if they are now deceased. 

image - Twobee Freedigitalphotos.net

When you need a new car, you need a new car. Your old car may not wait around long enough for you to save up thousands of dollars to replace it. So, what are your other options?

Many people opt for a car loan to finance the purchase of a new car. A car loan allows you to borrow the money to purchase the car, and then pay off the purchase in installments over a certain period of time.

When you are choosing a car loan, you will need to decide how long you want the loan to last for. This will normally be determined by what you can afford to pay back each month. Loan terms range from 1-5 years, although some can last longer.

It’s worth bearing in mind that although a loan over a longer time period will mean lower monthly repayments, you really don’t want to be stuck paying off your car loan long after the car itself is dead.

In order to work out the most affordable car loan option, it can be a good idea to use a car loan calculator. A car loan calculator can allow you to compare car loans so you can work out how much each loan will cost you overall.

It can also help you to work out how much you can afford to repay each month, and how long you will need to pay off the loan.

While taking out a car loan will mean you have to pay interest, the interest you pay can be kept to a minimum. One of the main things that will affect the amount you pay in interest will be your credit score.

When you apply for a car loan, the lender will look at your credit file to evaluate how much of a risk you are. If you have bad credit or no credit, then you will be seen as a higher risk.

This is one of the main reasons to check your credit file before you apply for a loan. You can apply for a copy of your credit file online for free from a credit reporting agency such as Dun & Bradstreet or Veda Advantage. If you notice any errors on your credit file, ask to have them corrected.

When you are looking for car loans, shop around and compare the market to find the best option. Read the small print and find out what the lender charges in loan fees. Use the information from the car loan calculator to choose the best loan option for your budget.

Applying for a car loan is usually a quick process, and you can often receive a reply within minutes. Which means you could be on the road in your new car within days, not years!

This is a post from Car Loan World - Australia

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