In our last post, we
\ndiscussed the idea of using different investments to help buy-out a partner’s
\ninterest in your business and\/or accumulating capital as an additional source
\nof income when you sell or transfer your business to another party. A
\nlegitimate question to ask is why bother to invest my hard earned money when
\nthe full value of my wealth is completely tied in my business. Our team frequently encounters that
\ndilemma. Let me offer a few points that are worth due consideration.<\/p>\n
First, it’s always good to
\nhave an additional source of revenue. If
\nfor no other reason this money can be used for an unforeseen emergency. Nevertheless, putting emergencies aside, let’s
\nsay you do not receive a lump sum down payment for the value of your business. There is a very good chance that a buyer may
\nnot be able to come up with what you need.
\nFurthermore, if the buyer were to come up with a down payment would his
\noffer be large enough to tie you over until installment payments begin? This is why it’s important to recommend investments
\nas an additional source of retirement income.<\/p>\n
As an inside, we
\nenthusiastically recommend every retirement plan have three legs to stand
\non. First would obviously be Social
\nSecurity. The second would be a basic
\nannuity Pension Plan. In the case of a
\nbusiness owner it would be the value of his business. Last would be an investment account.<\/p>\n
Now to return to our basic
\nquestion (from previous article) do you use an IRA or another form of a qualified
\nvehicle or do you do a non IRA, non-qualified type of investment. While each case is different, generally we
\nrecommend using a NON-Qualified investment.
\nWhile it’s attractive to have a nice tax deduction, remember that when
\nyou withdraw monies, the entire amount is fully taxable. You must also factor in a possible 10%
\npenalty for early withdrawal if your redemption occurs prior to the age of 59
\nand \u00bd. This is why it’s important to
\nwork with a financial planner along with your accountant. <\/p>\n","protected":false},"excerpt":{"rendered":"
In our last post, we discussed the idea of using different investments to help buy-out a partner’s interest in your business and\/or accumulating capital as an additional source of income when you sell or transfer your business to another party. …<\/p>\n","protected":false},"author":133,"featured_media":0,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[1],"tags":[],"class_list":["post-16315","post","type-post","status-publish","format-standard","hentry","category-uncategorized"],"yoast_head":"\r\n