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Andrew J. Errato, CPA/ABV, CVA, MST
David Y. Bailey, CPA
Dominic Scarano, Jr., CPA
Michael E. Bailey, CPA, MST
Michael J. Schaefer, CPA (Retired)
Alan P. Bailey CPA, (Retired)
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| THE BSE LETTER: March 2008 |
A SUMMARY OF CUTTING EDGE INFORMATION FOR YOUR BUSINESS AND YOUR LIFE The BSE LETTER is a concise summary of some of the most important and recent information concerning all aspects of your business and the world in which we live. It is prepared exclusively by the accounting firm of Bailey Schaefer & Errato, LLC (BSE). We hope you will find these summaries useful. For further information on any of these topics, please contact any of the BSE Partners: Andrew J. Errato, David Y. Bailey, Dominic Scarano, Jr. or Michael E. Bailey. All can be reached at (203) 481-1120, or through our website: www.bsecpa.com. Look not mournfully into the past, it comes not back again. Wisely improve the present, it is thine. Go forth to meet the shadowy future without fear and with a manly heart. Henry Wadsworth Longfellow
THE FACTS OF LIFE . . . As soon as your kids know what money is, it’s time to start teaching them about it. Of course, it’s best to provide them with useful financial knowledge appropriate for each age level as they grow up. Here are a few ideas:
Age 6. Start a Piggy Bank. Habits developed early are likely to last a lifetime...and saving money is a very good habit to have. An allowance can start at this point, if the main point is to save part of it each week. Use a see-through piggy bank or a simple tally to demonstrate how the money accumulates over time, especially if you instruct them to save 10% of everything.
Age 10. At this age, kids can understand the idea of money being stashed in a bank and gaining interest over time, since by now they are learning multiplication in school. This will also introduce the concept of dealing with financial institutions.
Age 13. Now, your children know how money is limited and their needs and wants have no limits at all. It’s time to introduce budgeting. A great time to start is during annual back-to-school shopping. Make a list of all the items your child wants, prioritize them, and then create a budget. Let them decide which purchases to make within the amount you have allowed. If they don’t choose well, it’s the best and safest time to make mistakes, and learn lessons that will literally pay off later.
Age 16. Many young people begin working at this age. It’s best to offer to match dollar-for-dollar any money your child saves for long-term goals like college, a home, or even retirement.
Age 17. Credit cards are a reality. It’s best to start early and safely. Get them a credit card with a very low limit perhaps $250. Make sure you have access to the bills or an online version of the charges and payments. Don’t let bills go unpaid. More lessons can be learned about budgeting, but credit is hard to repair.
The main idea is to bring sound financial practices and principles into daily living in the same manner as you would every other important aspect of your child’s life.
THE MISSING LINK . . . If you’ve lost a loved one and you think there may be an insurance policy, but cannot locate it, there are steps you can take. Unfortunately, there is no database where these records are kept, but the Insurance Information Institute (III) recommends taking some important steps:
Search through all their financial records and bank statements, keeping an eye out for premium payments. Also, contact information for insurance agents or institutions, along with accountants and attorneys, may lead to all important documents.
Contact current and former employers. Ask them about any group life policies that may exist. If you find one, review its application. It should contain an attached list of any other life insurance policies owned at the time the policy was completed.
Check your loved one’s mail for at least one year after their death. You will either find premium notices or, if the policy is paid, dividend notices or annual status reports on the policy.
Still nothing? Hire a private search firm if you still suspect there are unfound policies. For instance, the MIB Group is an insurance trade association offering a Policy Locator Service for a fee. However, only 1 in 4 inquiries with them produce a successful result.
Your last resort is to check with your State’s unclaimed property office to see if policy proceeds have been turned over by life insurance companies who are aware of a policy holder’s death, but unable to locate the beneficiary.
Of course, it’s best to know and have all this information on any family member whose death may necessitate your involvement with the settlement of their affairs. For more information, call BSE at (203) 481-1120. WORDS MATTER . . . Speaking effectively to an audience is one of the most valuable and necessary skills to develop throughout your career. You can demonstrate your businesses benefits along with sharing important information with influential colleagues – all the while proving your worth and giving you an edge on your competition. Here are a few important points to remember:
Practice. Toastmasters International puts practice into practice, allowing members to try out their speaking skills in front of others and providing a forum for valuable feedback and constructive criticism.
Study. Watch other excellent speakers you admire and observe what they are doing to make themselves so impressive and influential.
Remember. Your vocabulary and sentence structure is not what it is when you are writing or reading. Keep your speech simple, clear and conversational.
Listen. Before you are introduced, listen to the introduction. You may be able to respond directly to what is said. Be ready to get up there quickly. Nothing is worse than waling up to the podium in silence.
Say one thing. That’s it. Decide the one clear idea or message you want to get across and stick to it. Everything else you say should back up that one, singular idea. Stories, statistics, evidence, anecdotes – all should be a foundation to this one message.
Make it personal. Don’t use phrases like All of you. Each audience member is listening as an individual, not as a group. So speak as though you are talking to one person.
Make it relevant. Use stories that are relevant to your audiences' frame of reference and life experience.
Make it real. Say the speech aloud several times. Real mistakes show themselves when you start speaking. The goal here is to get comfortable with what you say so that it will be more conversational and relaxed when you deliver.
Make it current. Get online the morning of your presentation and look for the most current information pertaining to your topic. Chances are, you’ll be the first to offer this Late Breaking news. This will boost your validity as an expert.
Connect with your audience. Make eye contact and connect with people directly. This will allow you to better judge what is working and what isn’t.
Don’t flood them with facts and figures. You’ll put them to sleep with statistics, but it’s okay to leave printed materials with all the evidence at the end of your talk.
If you must, use PowerPoint. But, only if you have to. Just don’t put too much information on the screen and don’t read the language word for word – unless you want to put your audience to sleep.
Finish strong and clear. Summarize your major point quickly with lots of personal emphasis on statements using “you.”
A BAD ECONOMY IS NOT THE WORST THING THAT CAN HAPPEN . . . As the key person within your organization, you should have a plan for the absolute worst case scenario – your death. If you’re proud of the business you’ve built, you certainly don’t want anything to happen to it if something happens to you. Your age doesn’t matter. As a business owner you should accept your mortality as the reality it is.
First, create a Plan of Succession. The plan should answer important questions like: Who will own the business - or your share of the business - upon your death? Will the new owners (perhaps family members) play an active role in running the business? Who will run the day-to-day operations? Should the business continue at all, or if it should be sold? Of course, you’ll have to coordinate your plan with any co-owners and shareholders. There are countless estate and tax implications on these decisions. Settling your estate won’t be easy for anyone, if there are questions about the ownership and value of your company.
Second, implement the plan. Get Key Person life insurance to cover any and all circumstances whether you are the sole owner or have co-owners. You, your co-owners, and the company itself should carry insurance on every key person involved. Place rock-solid provisions in your will clearly spelling out your wishes and instructions pertaining to the continuation of your business. Let everyone involved (family, business advisors, etc.) know what your plan is. If everyone knows your wishes and the reasoning you used in making your decisions, it will make for a smoother transition later. You’ll never hear the fighting that goes on after you’re gone, but you can prevent it from happening now. Finally, get a life insurance policy that will cover any and all estate taxes or other costs from settling your estate or transitioning your business. Those close to you will have enough to deal with. This one policy can make a difficult time much easier. For much more information or to get started today, call BSE at (203) 481-1120.
Little minds are tamed and subdued by misfortune, but great minds rise above them. Washington Irving
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