Managing your wealth while you’re running your business is a tricky task. You’ll undoubtedly want to make the most of your income, but you also don’t want to take your eye off the ball with your business, either. However, there are effective ways that you can manage your personal finances while running your businesses that will take you very little time. Here, we run through three effective ways to manage your wealth while you’re running your business.
#3 Keep Business and Personal Separate
It’s hard to know how to best manage your wealth if you don’t know exactly how much you have. So, split it as best as you possibly can. Not only is this a good idea for your own wealth management purposes, but it’s also a good idea for tax purposes, too. As it will give you a much better chance of paying the correct tax bill first time.
It will also leave you less liable should the worst happen and your business fails. This is perhaps unthinkable for you, but the reality was that, in 2014, 9 out of 10 start-ups lasted less than 2 years. If your business is not separated from your personal assets, then you could be held liable for its debt if it fails, so you could lose your family home or savings to cover this. As a result, you should consider making your business a limited company to lower your liability, rather than existing as a sole trader. Registering is easy. You can do it here, it only costs £12 and will be done in a couple of days.
#2 Consider Diversification
Secondly, if all of your wealth is tied into or directly related to your business, then it could be worth considering diversifying your wealth by investing in other areas. This could include (but is not limited to):
- Other companies (either as an investment or an outright buyout)
- Trading forex
By diversifying your wealth, you lower your reliance on one aspect of it. So if any market turns against you, you’re not over-exposed.
#1 Invest Wisely
If you’re not quite au fait with wealth management techniques, then the best course of action can sometimes be accepting this and seeking professional help. Wealth management companies such as WHIreland PLC can help you manage your portfolio. Then you can use experts to guide you every step of the way based on your own plans, goals and risk management levels.
To conclude, running a business and managing your wealth can be incredibly tricky, so consider the above tips carefully and decide which is best for you.