Where to Incorporate Your Business? Delaware vs. Florida

It’s the ultimate LLC showdown: Florida vs. Delaware. Both states have their advantages, but which one is the right choice for your business?

Traditionally, Delaware has been the more popular option when it comes to LLC formation. This is primarily due to its business-friendly laws and no sales tax. Nonetheless, thanks to low filing fees and no state income tax, Florida has proven itself to be a strong contender.

Here’s everything you’ll want to consider before deciding where to incorporate your remote business:

What do Florida and Delaware Have in Common for LLCs

When it comes to LLC formation, all states are not created equal. However, Florida and Delaware LLCs have more in common than you might think!

Both states offer similar benefits for remote businesses looking to incorporate in one of the two locations, including:

• No minimum capital requirements - Neither state requires you to deposit a minimum amount of capital; this means you can get your business up and running in its early stages easier. This not only makes entrepreneurship more attainable, but also serves to encourage growth at all stages of business development.

• Asset protection - 

1. Florida, there are laws in place that prevent judgement creditors from seizing any LLC ownership interests. These include business-related assets, financial accounts, and real estate, so you can rest assured knowing that your possessions like your home will remain safe.
2. Delaware LLCs also make it easy to keep your assets protected. Here, the only way creditors can pursue an LLC member’s ownership (i.e. assets) is through a charging order. A charging order involves a long and complicated process that requires a creditor to file a personal lawsuit against an individual LLC member, request that the court issue a charging order, and present the order to the LLC.

Now that you know what a Delaware and Florida LLC have in common, let’s delve into the differences.

Why Choose a Delaware LLC

Delaware is a desirable state to form an LLC in, and for good reason. Here’s what you can expect when you incorporate your remote business in Delaware:

An extra layer of privacy protection

When you form an LLC, your name and designated business address will be used for a variety of purposes. It’ll be on websites, packaging, client communications, paperwork… the list goes on. However, if you choose your LLC location with intention (read more for the perfect pairing), you can prevent this information from getting into the wrong hands.

The state of Delaware provides LLC owners with exceptional privacy protection. Since you aren’t required to list member names and addresses in your filings, you can essentially run your business anonymously, if you wish to do so. You’ll never have to worry about unsolicited mail, or worse, angry customers showing up at your house demanding refunds or worse stalking you.

Want to take it a step further? Pair your Delaware LLC with a Delaware virtual mailbox (which gets you a US-based commercial business address) to cover all of your bases and ensure your privacy won’t be compromised in any way.

Business-friendly climate

One of the most notable benefits of incorporating your LLC in Delaware is their business-friendly court system. Delaware is home to the Court of Chancery, a reputable, non-trial court that focuses on commercial litigation and real estate matters. Judges who are assigned to this court are experienced in corporate law and small business legal matters. This is a huge benefit for small businesses because it means that any outcomes are decided based on past case law, versus public opinion (which is often clouded by emotions and biases).

No Sales Tax for Your Delaware LLC

The state of Delaware does not require you to pay sales tax (example you won’t have sales tax when purchasing inventory for your ecommerce store), you’ll be able to save more money than had you decided to incorporate in a state that does.

While these benefits may sound appealing, don’t be so quick to discount a Florida LLC; they come with some pretty desirable advantages of their own!

Why Choose a Florida LLC

With a Florida LLC, you can enjoy different benefits and it’ll depend on what you find more valuable. Let’s cover the benefits.

No State Income Tax

Florida LLCs have seen increased demand in recent years because of one major reason: there is no state income tax. This can save your business a large chunk of money in the long run, so it’s a huge benefit for you.

Here’s an example: You own a t-shirt business and expect to sell $50,000 worth of products this calendar year. As a LLC in Florida, you would not be expected to pay taxes on this amount.

Need a Florida business address to take advantage of no state income tax? Grab a VPM Florida virtual mailbox that can be used for your LLC.

Lower filing fees

The state of Florida has lower filing and maintenance fees compared to Delaware ($390 total). For just $125, you can have your LLC up and running in a single afternoon. The other costs you’ll be responsible for are ones associated with filing your annual fees with obtaining a registered agent.

Looking to save more money? Skip paying registered agent fees when you sign up for a VPM virtual mailbox – you’ll get a free registered agent with select mailbox plans! 

Delaware vs. Florida LLCs: Which is Better?

Now that you’ve learned about the benefits of both Florida and Delaware LLCs, it’s time to make a decision for your remote business. Both options offer a wealth of advantages; both are superior in their own ways.

Ready to get your LLC formed in the state of your choosing? Here are all the steps you’ll need to take to get started. Best of luck!

4 Things You Should Know Before Forming an LLC

One of the most important decisions you’ll have to make for your remote business is choosing where to form your LLC. Got Nevada on your mind? You’re not alone. In 2020, over 283,333 small business owners called the state of Nevada home. That’s over 99.2% of Nevada businesses!

You might be excited to hear that Nevada has no corporate income tax. However, unless your LLC is taxed as a C-Corp, this won’t apply to you (which is the case for 99%+ of you reading this). These are the kinds of facts you need to know!

If you’re thinking about forming a Nevada LLC, here are four things you’ll want to consider before you get started.

1. Nevada Offers Your Business Strong Anonymity

Be aware that each state determines their rules and statutes regarding LLCs. Nevada is one of four states (Delaware, Nevada, New Mexico, and Wyoming) that allows you to run an anonymous LLC.

What is an Anonymous LLC

An anonymous LLC is a limited liability company that does not require owners to disclose personal information, such as your name and address.

However, despite the LLC owner maintaining anonymity, the names and addresses of all LLC managers must be disclosed within the Articles of Organization, as well as the annual List of Officers. Both of these documents are on public records that can be obtained by searching through the Nevada Secretary of State website.

An anonymous LLC can protect you and your business from hackers, stalkers, and unwanted mass marketers. But that’s far from being the only advantage!

If you decide to form an anonymous LLC in Nevada, you’ll enjoy the following benefits:

• All of the same perks you would receive with a “regular LLC” - the difference is that you can keep your name and address private as an owner.

• No state income tax (Nevada is one of the 7 states that does not have state income tax)

• Strong corporate veil that protects individuals from liability (you’ll read more on that in section #4)

• It’s important to note that forming an anonymous LLC is not a magic cure-all to all of your business privacy woes. It does not exclude your business from paying taxes, nor does it guarantee full anonymity from your bank, lawsuits, or the IRS.

Why Form an Anonymous LLC

Perhaps you work full-time and don’t want your personal name attached to your side business. Or, maybe you operate out of your home address or a local coworking space and don’t want solicitors (or worse… angry customers, creditors, vendors) calling/texting/showing up at your workspace unannounced. Whether you’re concerned about your safety or just want to maintain your privacy for good measure, there are a number of legitimate reasons to form an anonymous LLC. 

There are certain situations in which your name and address could still be made public. If you want to take your privacy one step further, signing up for a virtual mailbox can add an extra layer of anonymity to your LLC.

Make Sure Your Privacy is Protected 24/7 With a Virtual Mailbox

The best way to protect your privacy when forming your anonymous LLC is by obtaining a virtual mailbox, which provides you with a commercial business address to use for documentation. This way, you’ll never have to worry about your personal information being compromised in the event of a subpoena or lawsuit.

2. Nevada Allows You to Form a Series LLC

A series LLC is a unique type of limited liability company that offers business owners more flexibility than a single-member LLC. If you’re not familiar with the term, a series LLC consists of a “parent” LLC that contains multiple “series” established within the original. Each series operates as if it is a separate entity, meaning it can have its own business name, members, managers, assets, purpose, bank accounts, and records.

Pros of a Series LLC

The most notable benefits of a series LLC include:

Save money on filing fees – Your business will pay just one filing fee, regardless of how many series are operating under the parent LLC.

Protection for each individual series – If one series gets sued, the others won’t be held liable for any debts, obligations, or expenses.

More options – A series LLC offers flexibility when it comes to splitting management and financial decisions, since each series functions independently from one another.

Cons of a Series LLC

There is one major disadvantage that you may want to take into consideration when it comes to a series LLC. Paying state and federal taxes can be tricky, since there are no uniform rules or guidelines laid out. For this reason, you should seek professional tax services.

Why Form a Series LLC

One of the most common reasons business owners decide to form a series LLC is because of the liability protection it offers. It can also save you stress and money in the long run.

Picture this: you are a real estate investor who owns several individual properties. Instead of creating a new LLC for each of your assets, you decide to create a series LLC, with each property under a new series. In the event that one of your properties gets sued, your other series (i.e. properties) will not be liable, and the remainder of your assets will be shielded from any risks. 

You could also form a series LLC to separate subsidiaries within one singular business. For example, you could create a new series for each department, location, product, etc.

3. You’ll Need to Submit (and Pay For) Three Documents

When you form your Nevada LLC, you’ll be responsible for submitting three documents to the Secretary of State: your Articles of Organization ($75), Initial List of Managers or Managing Members ($150), and a State Business License ($200). The total filing fee for all three is $425.

The easiest (and fastest) way to submit these documents is online.

Articles of Organization- Think of your Articles of Organization as your business’s birth certificate. This document will contain basic information related to your LLC.

Initial List of Managers or Managing Members -The Initial List of Managers or Managing Members should contain the name(s) and address(es) of the managers or members of the LLC. You will be required to file this document annually, and it’s due by the last day of the month following your filing of your Articles of Organization.

State Business License -Every business operating out of the state of Nevada is required to obtain a state business license. These are issued by the Secretary of State and must be renewed annually. The easiest way to apply is online, but you can also download the appropriate forms and apply by mail.

Note: You might also need to acquire 1) a local license within the city/county in which you plan to operate and 2) a business permit if you plan to operate within a regulated industry. Application processes will vary depending on your jurisdiction.

4. Don’t Use a PO Box for Your Nevada LLC

There’s one step you’ll want to skip altogether when it comes to forming your Nevada LLC: signing up for a PO box. A PO box is not an acceptable physical address when it comes to forming your LLC. In fact, your paperwork will be rejected if you attempt to use one!

What should you do if you already have a PO box? Sign up for a virtual mailbox, which gets you a US-based business address. Once you’ve done this, you can request to close your PO box.

Ready to Get Your Nevada LLC Up and Running?

In conclusion, a Nevada LLC can offer your remote business a ton of benefits, including anonymity and asset protection. It’s also one of 14 states that allows you to form a series LLC. Perhaps you were thinking of getting a PO box to receive business mail while you run your business from home (or on-the-go), but now you know there’s a much better option available

Basic Business Plan Structures

Your business plan is vital to outline everything you will do and how you will do it.

The format for your business plan is important to consider. There tend to be four categories of business plans: strategic, traditional, lean startup, and feasibility. Choose your format according to what best suits your type of company. 

Strategic Business Plan Format

The strategic business plan format focuses more on higher-level goals rather than detailed methods. It plans how to achieve your goals and is a great asset for communicating the big picture to others. 

Traditional Business Plan Format

This is a comprehensive business plan, covering all the steps, which is good for detail-oriented people. This plan is very useful if you are thinking of asking for funding. 

Lean Startup Format

This format provides a visual picture of facts about your business in the form of charts that cover the main information about your company, including finances, customers, and structure. 

Feasibility Business Plan Format

This business plan seeks to answer whether the company can make a profit and who is going to buy what the company has to offer. 

No matter what type of company, all business plans should cover the following elements:

Executive summary - a quick outline of your company

Company description - details what your company does

Market analysis - where you will use your market research, including some graphs from your quantitative research

Organization and management - the structure of your business

Service or product - what you offer

Marketing and sales - your market and sales strategy

Funding request - how much money you require to conduct your business

Financial projections - detail the current state of finances and add financial projections

Appendix - this is optional to add anything referenced earlier in the plan such as permits, data, or research

Picking Your Business Address and Location

Picking your business address location is a strategic decision. The state, city, and neighborhood you choose to set up your business will determine taxes, permits, licenses, zoning laws, and state and federal regulations. 

Home Address

Using your home address as your business address will work for some types of industries. For example, if you are in a service industry, such as a hairdresser or personal trainer, it may not be feasible to conduct your business from home unless you have a separate space for the business. However, if you’re a freelancer or consultant, it may work well for you to use your home address. I did when I formed my LLC and then decided to add a co-working space to meet with clients and receive mail, packages and faxes. 

Another important aspect to consider about using your home address is that it won’t be able to protect your privacy. If you care about protecting your personal information, a home address is not the best business address option. 

PO Box

You can rent a PO box in 3 easy steps. Before signing up, there are 5 reasons for renting a PO box you might consider. It is an option if you’re concerned about your home address being made public. However, if you run an LLC, corporation, or partnership, a PO box is not accepted. 

Commercial Business Address

You can use a commercial business address to register your LLC or corporation. The requirement is a real street address, not a PO box. 

You can use these options for your commercial business address: 

Virtual Mailbox - This gives you a real business address to receive mail and packages. When you receive mail, it is scanned and sent to you digitally. You’ll get real-time notifications when it is processed in your online mailbox. Then, you log in and decide whether to forward, recycle, or trash the mail.

Coworking Spaces - These are shared spaces in an office building used by individuals or a team. They provide access to amenities such as meeting rooms, open collaboration spaces, work desks, and more space than your home, but without the corporate atmosphere of a traditional office.

Private Mailbox - These are rented mailboxes from a Postal Annex, UPS Store, PostNet, or located somewhere in a retail center. Your mailbox will be linked to that address, so it still provides you with a physical address.

Commercial Office - Commercial property can be land, property, or facilities that are either zoned for or used exclusively for business purposes.

Virtual Office/Business Centers - A virtual office gives businesses a physical address and office-related services without the overhead of a long-term building lease and administrative staff.

Think about your choices carefully before deciding. 

Overcoming First Time Entrepreneur Fear

Starting a business can feel a lot like diving off a bridge towards a small body of water, plummeting for a heart-stopping eternity, and hoping feverishly until the last second that your aim is true.

I mention this particular analogy because most never actually take that dive. What if I miss? Will I be successful? Due to that fear, you stay where you’re safe and lie to yourself that you didn’t really want to make the dive in the first place.

Fear is the destroyer of dreams, and if you let it control you, then you’ll never reach your full potential. If you intend to become an entrepreneur and take control of your personal and professional destiny, it is essential that you find a way to overcome the fear that strikes every first-time entrepreneur. Of course, that’s easier said than done. In this post, we’re going to look at four key tips for facing that fear and moving ahead.

Tip #1: Break Your Process Down into Manageable Steps

The first thing you need to know is that the diving analogy is fundamentally flawed. The reasons vary, but the biggest one is that you don’t veer uncontrollably from the first step to the final destination (whether it’s success or failure). Rather, you move horizontally.

You have a long way to go and a huge amount of work to do, but you can backtrack. You do not need to do it all in one fell swoop. Take your time, going from one step to another only when you’re ready.

By learning as much as you can about the entrepreneurial process and figuring out the intricacies of each unique challenge you’ll face along your journey, you can massively boost your confidence to take the dive.

There are countless resources that provide all the insight you need, packaged in various ways for ease of consumption. Here are three big categories:

Blog posts: The web is packed with exceptional blogs providing great insight into the entrepreneurial process. Take HubSpot, for example: its blog has an unmatched reputation for offering finely-honed guides on topics pertaining to business, entrepreneurship, financial management, training, and a myriad of other topics relevant to running a business. Simply search for the niche topic that interests you and you’re sure to find an article to point you in the right direction.

Video guides: If you’d rather watch videos than read articles, this is a great option. YouTube is flush with entrepreneurial guides from people who’ve been there and done that, and it can be extremely reassuring to hear them talk. Two areas that are particularly useful are motivation (overcoming your fears, setting goals, etc.) and sales (choosing products, targeting an audience, etc.).

Podcasts: Not a fan of reading articles or watching videos? Podcasts are great because you can listen to them and absorb valuable information while doing other things. One idea is to find podcasts from people who’ve been in your position before. How did they achieve their goals? What mistakes were made along the way? The more you hear about paths already traveled, the easier you’ll find it to navigate your own.

Tip #2: Set A Budget That You Can Afford To Lose

Feeling like you’re putting everything on the line is pretty daunting when you’re trying to start a business because it magnifies the pressure on you. You simply can’t afford for things not to work out. You have one shot ー miss it, and you’ll have no choice but to return to a life of conventional employment, minimal creativity, and never being your own boss. How is anyone supposed to perform well in those conditions? Even a seasoned professional would struggle.

Instead of going all-in, you should pointedly set a budget that you can afford to lose in its entirety. If your startup crashes immediately and you can’t recover any of the money you put in, you shouldn’t face any financial trouble. Ideally, you should still have some savings to support your next business venture.

Keep in mind that this isn’t just about regular operational costs: it’s also about your initial costs to some extent. What equipment do you need for your new business? What will make you maximally efficient? A new desk? A coffee machine? A couple of external displays for your laptop, and maybe even a hard drive docking station to neaten things up? 

Your loaction is a key considerations that go into the decision-making process: decide if you'll be working from home, frequently traveling, or in a co-working space and how that will affect the kind of equipment you need and the amount you'll have to spend.

Before you invest in something, then, think about whether you really need it for your business, and whether you can afford to leave it for a later date. In all likelihood, you can give it time.

Tip #3: Outsource Everything Except For Your Core Tasks

Part of the intimidation factor of entrepreneurship is simply the amount of work required for a startup. You need a brand, complete with a full set of thought-out brand guidelines. You have to build a high-quality website. You need rigorous financial management. You have to come up with a compelling value proposition to make you competitive. Your content marketing strategy needs to garner traffic and earn the trust of your target audience.

That’s a lot of work for one person, which is why the solopreneur life is exhausting. Don’t take that approach. However, don’t hire full-time staff yet either because that will only heap more pressure on you. Being responsible for the well-being of others will lead to major feelings of guilt if you can’t deliver success. So what should you do? 

*SPOILER ALERT* If you read the subheading, you already know the answer. You should outsource everything except for your core tasks.

Outsource your brand design. Outsource your financial management. Outsource your content marketing. Outsource your mail management. This will add to your expenses, yes, but it’s a worthwhile investment because it will give you more time to focus on the things you’re best positioned to handle.

Tip #4: Know That You Can Adapt As You Go

When you settle on your first business plan, there’s early value in viewing it as a fixed sequence of events. This can give you focus and clarity, helping you stay on track instead of being lured into working on things that don’t really matter and seeing your progress suffer as a result. But even the best plans need contingencies and alternatives — and your first business plan is highly unlikely to be anything special in the grand scheme of things.

It isn’t that you’re incompetent or lacking in talent: it’s simply that you don’t have the experience to know what will work in practice, not just in theory. Due to this, you have to remember that you don’t need to get things right the first time, and small-scale failure won’t require you to abandon your business entirely. Instead, you can adapt to the circumstances you encounter.

You might benefit from pivoting a central element to adopt a different approach, for instance. The more time you put into research, the more you’ll learn about what your target audience really wants, and you can reap the benefits through making updates. In short, the business you end up with won’t necessarily be the one you planned or anticipated, and that’s alright. Don’t worry about your ideal plan. Just get started and stay on your toes.

Let’s Recap

In this post, we’ve covered the following tips that will help you succeed:

• Work in manageable chunks. Something that initially seems intimidating (or even impossible) seems so much simpler when you break it up into smaller pieces.

• Keep money in reserve. If you protect your savings and only invest a small amount, you can take risks knowing that you can bounce back from failure.

• Focus on what you’re good at. Don’t drive yourself to frustration by trying to do everything yourself. Play to your strengths. This will increase your comfort.

• Remember that you’ll learn. You don’t need to know everything now. You don’t even need to know much. Just be ready to learn as you go.

There’s nothing bad or shameful about being afraid. It’s how you respond to that fear that will define your entrepreneurial career. Denying it or shying away from it will only make it worse. It’s only through accepting it and facing it that you can eventually overcome it.

Advantages and Pitfalls of Credit Counseling

Credit counseling services receive a lot of mixed reviews. 

There are many reputable services, but there are also credit counseling companies with horrible reputations. Credit counseling is now required before filing for bankruptcy. 

If you want help with your debt, you must be aware of the advantages and disadvantages of using a credit counseling company.

Positive Features of Credit Counseling 

• They tend to have more clout with creditors. Some creditors are more willing to negotiate pay-offs and payment plans with credit counselors. You might get a better deal and more breathing room with a credit counseling service. 

• It’s possible to consolidate your payments. Many firms will consolidate your payments into one payment each month. You’ll be making a payment to the counseling company. Understand that the credit counseling firm must then make all the individual payments for you.

•  It can be easier to get new credit. As part of your credit counseling, it’s common for new credit to be secured for you. They’ll go out and work to have your credit applications approved.

• An end to the harassment. When you’re put on a repayment plan, the debt collectors will leave you alone. Remember that you can do this yourself by simply making a request in writing.

A reputable and honest credit counseling service can be helpful. There are many potential advantages to utilizing the expert assistance they can provide. But there are also several possible negative consequences.
 

Pitfalls of Credit Counseling

• They might not actually pay your bills. There are many complaints every year of credit counseling companies taking your money and then failing to make the agreed-upon payments to your creditors.

• They often over-promise. Just like any other company vying for your dollars, sometimes the marketing is a little too good to be true. After the counseling company takes their cut, you might not be any better off.

• It can possibly make your credit worse. There is one tactic commonly employed that can have a negative impact on your credit score. The credit counselor may advise you to stop paying on your debt and instead put the payments into an account. Once a large enough lump sum has been accumulated, the counselor would then approach your creditors with offers to pay off the debt at a reduced amount.

During this process your credit will suffer due to the non-payment.

The account used to store the money is under the control of the counseling firm. Do you trust them? The potential pitfalls are serious. It’s very important to do the necessary legwork to locate a reputable credit counseling service.
 
Many consumers believe that a service with non-profit status must be reputable. Understand that being non-profit is primarily about not showing a profit at the end of the year. Paying bonuses and higher salaries can accomplish this feat.
 
Ideally, you’ll be able to find a counseling service in your state that you can visit in person. Checking with your state Attorney General is an effective way to see if any complaints or legal action have taken place. Doing an online search is also likely to turn up any negative reviews or complaints.
 
Inquire about the services offered and the fees. Ask how the employees are paid. Are they compensated more for signing you up for certain services? Get everything in writing. Verbal promises are likely to be conveniently forgotten.
 
Credit counseling can be beneficial or counterproductive to your goals of reducing and eliminating your debt. Find a reputable credit-counseling firm by doing the necessary research. Be sure your financial situation will move in a positive direction.

I put in the work and worked on my personal credit repair and my family's credit repair myself after we struggled financially during my eldest daughters cancer treatment. I didn't think I could do it myself but I had already experienced paying someone else to do it for me with no results a few years prior so I figured I would at least try and if it didn't work at least I didn't pay a scammer to do nothing for me. 

I used   my Econ's MyCreditSystem and I am really happy I did. I was so impressed with my results that I joined them as an independent agent. You can check out how that program works clicking on this link ---- myCredit System - myEcon

Money Mistakes We All Make

There’s nothing wrong with making a mistake — even when it comes to your finances. However, it becomes a problem if you keep making the same missteps over and over again. Learning from these common money mistakes can prevent headaches and position you for a solid financial future.

Spending more than you earn. 

Millions of Americans live above their means and struggle financially throughout their lives. Getting your budget under control isn’t only about creating a solid plan from which to launch your financial future. Having enough money left at the end of the month to add to savings or pay off your debts can lift a huge psychological weight.

Often, correcting overspending is as simple as cutting back on nonessential expenses such as dining out, shopping or other entertainment. If you can learn to trim down impulse purchases, you can likely free up some needed cash at the end of the month to put toward long-term financial goals. 

However, if you’re struggling to keep up with your budget and have already cut out all the extra spending you can, it may be time to look into more far-reaching solutions. For example, you might be able to renegotiate certain services such as cable and internet, or reach out to your lenders about altering the terms of your monthly debt payments.

Putting off financial planning.

The problem with the “I’ll get to it later” philosophy is that by the time you do get around to it, you may have missed some financial planning opportunities or made things more difficult for yourself. Putting off your financial chores only means that the to-do list grows ever longer, and when it comes to time-sensitive things like retirement planning or paying off debt, delaying the process could cost you more money in the long run.

To keep procrastination at bay, try breaking your finances into bite-size pieces that are more manageable. You don’t need to get your finances in order overnight, but ignoring your to-do list doesn’t make it go away. Try setting aside time once a week or even once a month to check in on your finances and accomplish important goals.

Failing to save for emergencies.

 

Almost 60 percent of Americans don’t have enough money in their savings account to pay for an unexpected $1,000 expense such as a sudden car repair or surprise medical bill. Millions of people are without a safety net, and even one accident could be devastating to their finances.

It’s generally recommended to have enough cash set aside to cover all of your family’s expenses for three to six months. A good rule of thumb is to save 10 percent of your net income. If that amount seems impossible in light of your monthly expenses, try starting with 5 percent and increase that amount by 1 percent each month until you’ve reached the 10 percent threshold.

Postponing retirement saving until later in life.

 

Many Millennial and Gen Z workers entered the job market more concerned with paying off their student loans than saving for retirement. Age 65 can seem like a long way off, especially to someone in their early 20s, but money saved early will grow into a much larger nest egg as the years pass.

 
For example, if you have an IRA with a 6 percent annual return, and you start contributing $2,000 per year into that account at age 25, you’ll have a total value of $328,095 at age 65 from your $80,000 investment (40 x $2.000). 

If you wait just five years and start your $2,000 annual contribution at age 30, you’ll end up with only $236,242 from an investment of $70,000 (35 x $2,000). If you have the income available, it’s never too early to start saving.

Taking a long time to pay off your high-interest debt.

 

It’s hard to save when you’re in considerable debt — especially if you’re losing money every month to high interest rates. If you’re juggling multiple debts that all need your attention, it’s difficult to know where to prioritize. But paying off debts with high interest rates is often a great strategy that can save you money in the long run.

• To start digging out, begin by paying off your debt with the highest interest rate, which will often be a credit card account. 

• If you have the cash on hand, pay off everything that isn’t tax-deductible. For example, say you have $5,000 stashed away that’s earning only 2 percent interest. That money would be put to far better use to pay off your credit card debts.

Always buying new cars without considering used options.

 

The minute you drive a new car off the lot, its value drops by as much as 25 percent. If you need a new set of wheels, consider a used car. Buying used means the depreciation has already come out of the previous owner’s pocket – not yours. 

• The loss of value in a car is far less from years three to six than from years one to three, which means you’ll get more of your money back when the time comes to sell the car.

Not buying enough insurance coverage.

 

Having the right insurance — including medical, automobile, homeowners, long-term care, life and disability — is key to good financial planning. While it can be difficult to figure out the kinds of insurance and the amount of coverage you may need, not having the right balance of insurance can be disastrous if you’re hit with an unexpected expense.

It’s a good idea to review your insurance coverage each year and determine which policies you may or may not need based on any major life events you’ve experienced. 

For example, if you’ve purchased a newer, more expensive car, it’s time to reevaluate your auto insurance. If you’ve recently gotten married or added a baby to your household, it may be time to take a look at your health insurance. 

If you’ve completed a major, value-adding home remodel, it’s probably a good idea to increase your homeowner’s insurance. It’s not enough to have just any old insurance coverage in place; you need to make sure the insurance you’ve bought will cover the full value of your growing assets.

Not monitoring your credit scores and credit reports.

 

Credit scores can affect you in many ways — from borrowing money, to buying a home and even renting an apartment — so it's important to see a credit score similar to what a potential lender may see. 

You can easily check your credit profile with each of the three nationwide credit bureaus, and then work with your lenders to correct any problems or errors that you discover. By law you are entitled to a free credit report from agency credit bureau once a year. You can get yours at freecreditreport.com

Lacking an investment strategy, or not sticking to one.

 

If you invest in stocks or mutual funds as part of your savings plan, it’s important to have a strategy for that money. Too many people let their emotions get in the way and end up buying or selling on impulse. 

Another common misstep is spending too much time and effort trying to time the market, hunting for the “big payoff” or chasing the investment of the month (or week or day). Instead, you need to decide on a strategy and stick to your plan.

Not having a will.

Suppose the worst were to happen and you die tomorrow. Would your loved ones be provided for? If you pass away without a will, a court will determine who gets what based your state’s laws.

However, when you prepare a will, you’re creating a legal document that clearly defines what you want to happen to your money and other assets after you’re gone. While no one likes to think about their own death, having a will in place not only makes your wishes known but also can reduce the stress of your surviving loved ones who are already facing a difficult time.

Chances are, you’ve made at least one of these mistakes throughout the process of managing your finances — and that’s okay. The key is to identify and understand financial missteps so that you can do your best to prevent them moving forward.

Know Your "Credit" Rights

Understanding the four major laws are your key weapons against unfair creditors and collectors. That way, if any of the credit bureaus or creditors start getting cute, you can set them straight fast. 

The good news is you don't have to go to law school to get a handle on these regulations! 

Here is a rundown of the four most important consumer credit protection laws and how to use them.

The Fair Credit Reporting Act

The Fair Credit Reporting Act is designed to help ensure that credit bureaus furnish correct and complete information to businesses to use when evaluating your application. 

Your rights under the Fair Credit Reporting Act:

• You have the right to receive a copy of your credit report. The copy of your report must contain all of the information in your file at the time of your request.

• You have the right to know the name of anyone who received your credit report in the last year for most purposes or in the last two years for employment purposes.

• Any company that denies your application must supply the name and address of the credit bureau they contacted, provided the denial was based on information given by the credit bureau.

• You have the right to a free copy of your credit report when your application is denied because of information supplied by the credit bureau. Your request must be made within 60 days of receiving your denial notice.

• If you contest the completeness or accuracy of information in your report, you should file a dispute with the credit bureau and with the company that furnished the information to the bureau. Both the credit bureau and the furnisher of information are legally obligated to investigate your dispute.

• You have a right to add a summary explanation to your credit report if your dispute is not resolved to your satisfaction.

Equal Credit Opportunity Act

When creditors evaluate a credit application, they cannot lawfully engage in discriminatory practices.

The Equal Credit Opportunity Act (ECOA) prohibits credit discrimination on the basis of sex, race, marital status, religion, national origin, age, or receipt of public assistance. Creditors may ask for this information (except religion) in certain situations, but may not use it to discriminate when deciding whether to grant you credit.

The ECOA protects consumers who deal with companies that regularly extend credit, including banks, small loan and finance companies, retail and department stores, credit card companies, and credit unions. Everyone who participates in the decision to grant credit, including real estate brokers who arrange financing, must follow this law. Businesses applying for credit also are protected by this law.

 Your rights under the Equal Credit Opportunity Act:

•  You cannot be denied credit based on your race, sex, marital status, religion, age, national origin, or receipt of public assistance.

• You have the right to have reliable public assistance considered in the same manner as other income.

• If you are denied credit, you have a legal right to know why.

The Fair Credit Billing Act

It is important to check credit billing and electronic fund transfer (EFT) account statements regularly. These documents may contain mistakes that could damage your credit status or reflect improper charges or transfers. If you find an error or discrepancy, notify the company and contest the error immediately.

The Fair Credit Billing Act (FCBA) and Electronic Fund Transfer Act (EFTA) establish procedures for resolving mistakes on credit billing and electronic fund transfer account statements, including:

• Charges or electronic fund transfers that you - or anyone you have authorized to use your account - have not made.

• Charges or electronic fund transfers that are incorrectly identified or show the wrong amount or date.

• Computation or similar errors.

• Failure to reflect payments, credits, or electronic fund transfers properly.

• Not mailing or delivering credit billing statements to your current address, as long as that address was received by the creditor in writing at least 20 days before the billing period ended.

• Charges or electronic fund transfers for which you request an explanation or documentation, due to a possible error.

The FCBA generally applies only to "open end" credit accounts - credit cards, revolving charge accounts (such as department store accounts), and overdraft checking accounts. It does not apply to loans or credit sales that are paid according to a fixed schedule until the entire amount is paid back, such as an automobile loan. 

The EFTA applies to electronic fund transfers, such as those involving automatic teller machines (ATMs), point-of-sale debit transactions, and other electronic banking transactions.

 The Fair Debt Collection Practices Act

You are responsible for your debts. If you fall behind in paying your creditors or an error is made on your account, you may be contacted by a "debt collector." A debt collector is any person, other than the creditor, who regularly collects debts owed to others. This includes lawyers who collect debts on a regular basis. You have the right to be treated fairly by debt collectors.

The Fair Debt Collection Practices Act (FDCPA) applies to personal, family, and household debts. This includes money owed for the purchase of a car, for medical care, or for charge accounts. The FDCPA prohibits debt collectors from engaging in unfair, deceptive, or abusive practices while collecting these debts.

Your rights under the Fair Debt Collection Practices Act:

•  Debt collectors may contact you only between 8 a.m. and 9 p.m.

• Debt collectors may not contact you at work if they know your employer disapproves.

• Debt collectors may not harass, oppress, or abuse you.

• Debt collectors may not lie when collecting debts, such as falsely implying that you have committed a crime.

• Debt collectors must identify themselves to you on the phone.

• Debt collectors must stop contacting you if you ask them to in writing.

Summary

These four laws (and others) were passed in order to protect you and your good name. Even if you technically owe the money, if the creditor doesn't play by the rules, you can use these laws to get them off your back. Take a little time to review how these laws work in your favor and let your creditor know that you know. If that doesn't get them to back off, you may want to use the assistance of experienced professionals that know exactly what to do in these situations.

How Does a Cash Flow Loan Work?

 

A cash flow loan, frequently offered by online lenders, provides small business owners with access to working capital, often by analyzing past revenues to predict future cash flow. 

In the loan application process, cash flow lenders are generally more concerned about strong cash flow in the future than they are the borrower’s business or personal credit scores. Where asset-based lending requires you to put up capital assets as collateral, here, you may pledge your future accounts receivables.

What is Asset-Based Business Lending?

If you find this discussion about assets confusing, here’s clarification. Loans typically fall into one of two categories:

1.  Secured
2.  Unsecured

Secured loans, also known as asset-based loans, require you to put up some kind of collateral (asset) against the loan. That could be real estate or equipment. Should you not be able to pay off your loan, the lender could seize the asset to help recover what you owe. 

Typically secured loans are for people who don’t have great credit or who don’t otherwise qualify for unsecured loans. But they can also be used to obtain better rates and terms on a loan.

Unsecured loans do not require collateral, though some may require a personal guarantee (PG) which allows the lender to attempt to collect from the borrower’s personal assets, not just the business, in event the loan is not repaid.

What You Need to Know About Cash Flow Loans

When it comes to financing options for your business, cash flow loans aren’t the cheapest. There are, however, some instances where they make sense, like if your credit is less than perfect, or you need a fast cash flow finance option. 

But you must understand and accept that you will likely pay a much higher rate for access to these funds. In some cases, it may be better to wait until you build your credit and can qualify for a better rate elsewhere. In other cases it can make the difference between growing your business and succeed or lose it all. 

Can You Get A Cash Flow Loan With Bad Credit?

One of the biggest benefits of cash flow loans is that you may very well qualify for one even if you have bad credit. 

Maybe you have credit card debt, or maybe your business is too new to have much credit history. Whatever the reason, you don’t want your credit situation to limit you from being able to access the capital you need to grow your business. 

In this case, a cash flow loan may be a way to get the funds you need. If you are considering a cash flow advance or business revenue loan I am affiliated as an Independent Agent with a company that facilitates these types of loans and more, the requirements to qualify are really easy to meet and the online preapproval process does a soft credit check so you don't have to worry about a hard credit inquiry on your credit report just to find out how much you qualify for. 

Your business can receive up to $25,000 TODAY (or 75% of monthly revenue) if you qualify AND apply before noon. Here is what you need: 

• Business Entity LLC or Corp. (No Sole Proprietorship.)
• Business Checking Account. (Checking Account must be in the Business Name NOT in a personal account used for business.)
• Minimum $5,000+ Monthly Sales for the last 3 months consecutively.
• Minimum 6 Monthe in Business
• Owner has a 450+ FICO Score or better.
• Minimal NSFs/Negative Days. (No more than 5 NSF or Negative Days in the last 3 months.)

PLEASE NOTE: Current loan consideration. If you have a current capital advance open the amount of debt you still owe will be taken into consideration and cause a reduction in the final approval amount but MORE FUNDS (2nd Position) may be available. 

If you have any questions or need help with the application process do not hesitate to call 973-861-5843 or email info@bizboom360.com  

WE HELP YOU 

• Discover - Identify Problems
• Evaluate - Development Strategy 
• Implement - Actionable Solutions

YOUR SUCCESS IS OUR SUCCESS!!

Understanding Credit Utilization

How much you owe is an important factor in determining your FICO® Scores, making up 30% of the total calculation. One of the elements that FICO considers in this factor is your credit utilization ratio.

Your credit utilization ratio provides insight into how you manage your credit card debt. While it's a good idea to avoid using too much of your available credit, it also doesn't help if you're not using any at all.

If you're trying to figure out how your credit cards impact your FICO® Scores, here's what you should know.
 

What Is the Credit Utilization Ratio and Why Is it Important?

Your credit utilization ratio is the percentage of the available credit that you're using on a given credit card account, as well as across all of your credit cards.
 
For example, let's say you have three credit cards:
 
Card A has a $5,000 credit limit and a $1,000 balance.
Card B has a $10,000 limit and a $4,000 balance.
Card C has a $1,000 limit and a $750 balance.

To get your utilization ratio for each card, divide the balance by the credit limit, and you'll get 20% for Card A, 40% for Card B and 75% for Card C.
 
To get your aggregate credit utilization ratio, you'll add up the three balances and credit limits, then run the same equation. This would give you a total utilization ratio of roughly 36%.
 
Your credit utilization ratio is important because it provides creditors with an insight into how you manage your finances. Credit cards are generally used for everyday spending, and if you regularly max out your credit cards or get close to it, it could indicate that you're having a hard time managing your money without the use of debt.
 
This could spell trouble if you take on a new credit account and don't have the funds to keep up with all of your financial obligations.
 
As such, the more of your available credit that you're using at a given time, the more at risk you are of defaulting on a payment, which results in a lower FICO® Score.
 

What Should My Target Credit Utilization Ratio Be?

Some financial experts recommend keeping your credit utilization ratio below 30%. However, the data doesn't support the implication that your credit score will dip once your utilization ratio crosses the 30% threshold.
 
Just like every other factor in your FICO® Score, the impact your credit utilization ratio will have on your score will vary based on a number of factors.
 
That said, generally the lower your ratio is, the better. Generally, keeping it below 10% (and consistently paying bills on time) can help you build and maintain a good FICO® Score.
 
That said, you want to be careful about having a utilization ratio of 0%. This is because it signifies that you're not using your credit cards at all, giving FICO less information about how you manage your money. While a 0% utilization ratio won't cause your FICO® Scores to drop significantly, it can prevent you from achieving maximum points for the amounts owed score ingredient.
 

How to Lower Your Credit Utilization Ratio

Your credit utilization ratio is determined by two things: your reported credit card balances and your available credit. Keeping the former low and the latter high is key to maintaining a low ratio. Here are some quick tips to accomplish that goal:
 
Avoid spending too much: Avoid using your credit cards too often, especially if you have trouble overspending or if you have cards with low credit limits. Even a balance of $200 on a card with a $300 limit (e.g. 66% utilization) could negatively impact your FICO® Scores.
 
Hold onto old credit cards: Closing a credit card takes away its available credit, which could increase your overall credit utilization ratio. As a result, it's best to avoid closing credit cards unless you're at risk of overspending and getting into credit card debt or there's an annual fee or security deposit, and you no longer use the card.
 
Make your payments strategically: Credit card companies typically report card balances to the credit reporting agencies based on your balance each month when your statement closes. Making a payment before that date could drop your utilization ratio enough to keep it at a satisfactory level. Alternatively, you could make multiple payments throughout the month to keep it low at all times.
 
Make paying off credit card debt a priority: If your credit utilization ratio is chronically high because you have a lot of credit card debt, make plans to pay down your balances as quickly as possible. Pay down your balances can not only benefit your FICO® Scores by lowering your utilization ratio, but it can also have a positive impact on your budget and overall financial health.
 

The Bottom Line

Your credit utilization ratio is an important factor in your FICO® Scores, so it's crucial that you know where you stand and take steps to maintain a low ratio every month.
 
Depending on your situation, this can take time, but the good news is that, as soon as you lower your ratio, your FICO® Scores will respond accordingly— you won't see lingering negative effects as you would with late payments and other negative items.
 
If you're not sure what your utilization ratio is, sign up for a credit monitoring service and keep track of where you stand. If you want to reduce your ratio, start taking steps now to reduce your credit card debt and maintain a low level going forward