In past articles I wrote
that a good rule of thumb was to save 10% of your net income. I know that many will say that’s insurmountable. So why not start with small steps? I’d recommend taking one area and one
important investment within that one area.
Let’s start with perhaps the most important agreement for any Business
Succession Plan, The Buy-Sell Agreement.
As a quick refresher, a
Buy-Sell agreement creates a liquid cash market for when you retire, become
disabled or for retirement. The Buy-Sell
works if you are a Sole Proprietor, have a partnership or even a corporation. One normally uses Life Insurance as the
investment vehicle. This investment is recommended
as it creates a liquid estate if you die while owning your business. Some plans also accumulate tax-free cash to
help provide income for retirement.
Now what happens if the
investment is too high? Well you can
begin a plan that has a lower amount of Life Insurance. Then after you can gradually add to it as you build your business. You could pay it on a
monthly basis. Another alternative would
be to purchase a Term Plan that you can later convert to a cash accumulation
plan.
Whatever your circumstances, there is always a
plan waiting for you to act on. A most
important factor is that you begin to protect your family, your business, and
most importantly you do something for yourself.