Is this the right time to sell your Business?
With the economy languishing in Canada, many business owners are wondering if this is the year to consider selling their business. There are five specific reasons why it would make sense to sell sooner than later.
There are many factors that determine a best timing for selling a business — the financial condition of the company, valuation, growth cycle, profit history, and the current market. Usually the best time to obtain the highest price occurs when sales and earnings are good and trending upward with a history of good performance. This gives buyer’s confidence in projected future earnings.
Value is dynamic and proper timing makes a big difference in the prices paid for business acquisitions. External factors such as the economy, industry trends, stock market volatility, competition, investor confidence, interest rates, and geopolitical considerations are cycles of constant change that impact value.
Internal conditions within a company also change. Often in combination with external factors, sometimes independent of those factors.
So how should you determine if 2013 would be the right time for you to sell your business? The following are five factors for Canadian business owners to consider.
(1) First, get a business valuation to determine what your business is worth in the current market. This is an initial step in determining if a sale would meet your objectives. You do not need to pay for a valuation. An Accountant or an experienced mergers & acquisitions professional can work with you in determining value.
(2) Understand that the current status of the mid market business market place in provinces like Ontario for continued prosperity and growth in the Province. The same applies for Alberta. We are going to pop up on a lot of radar screens as a place to relocate or expand for businesses. Ontario gained more residents than any other Province as the recession deepened in 2008 and early 2009 as job seekers migrated to one of the nations strongest labor markets. The Toronto metro area enjoyed the highest population growth than any other city in 2013 and has the highest number in Canada.
(3) Buyers in every category are looking for alternatives to traditional investment avenues. They are looking for stability, better predictability and control. Business acquisitions offer all of these and can also offer a better return than traditional investment opportunities, most of Canada is a prime target because of future economic expectations and long-term outlook.
(4) The capital gains tax rate is presently at a historic low. Therefore, business owners considering a sale should sell by before the Budget of 2014. This is a time considered to have the Small Business Gains Exemption change dramatically. The current Capital Gains Exemption allows every bona a fide shareholder the first $750,000 as tax free.
(5) Most importantly, even in our current economy, buyers exceed sellers and we have a robust small business exit market for now. The time will come when the flood of baby- boomer business owners ready to sell will outweigh the ready buyers.
Fueling the market are the different categories of buyers looking to put their money to work by acquiring profitable businesses in areas with a good economic future:
Early baby-boomer corporate retirees
Management-level refugees who have suffered a downsize who typically have severance pay or pension allocations to invest, and are looking to go into business for themselves. The stock market, or putting money in the bank, do not look attractive to these corporate refugees at this time in their lives.
Foreign buyers seeing Canadian businesses as investment opportunities while the dollar is valued lower against their own currency
30-something up-and-comers aggressively buying and building.
Strategic Buyers, both public and privately-held companies, are actively acquiring smaller firms as part of their strategy for quick growth and innovation. (Merrill Datasite – Dec 2013)
Investment Buyers, such as private equity groups, “are going down-market” (Merrill Datasite – Dec 2013) and are seeking add-on acquisitions in the lower middle-market for their investment portfolios.
Blue collar workers who have been layed off are also looking to “buy a job.” These tend to be smaller technical service companies.
If internal conditions, both business and personal, are right, 2014 is the time to consider selling a privately-held enterprise. We realize that the decision to sell is neither purely tax-driven, nor even a purely financial consideration. Business sales are usually motivated by personal factors.
However, because it can take anywhere from 6-12 months on average to sell a private company, we suggest that business owners considering a sale prepare now so they can take advantage of this exceptional, impermanent window of opportunity.
With all categories of buyers in play, historic low interest rates with the government working to make credit more readily available, the capital gains tax rate the most favorable in 40 years, and the positive future outlook of the Canadian economy, it appears to be an excellent time for business owners in Canada to explore their opportunities for exit.
By: Mark Borkowski is president of Mercantile Mergers & Acquisitions Corporation. Mercantile is a mid market M&A brokerage firm. Contact Mark at email@example.com or www.mercantilemergersacquisitions.com
Is this the right time to sell your Business?
Get Brave and Get Tech
One of the main things holding people back from being smart investors in emerging tech stocks today is their searing memory of being crushed in the 2000 and 2008 bear markets. People feel that they may have been fooled once, and they may have been fooled twice, but they sure as heck won’t be fooled again.
And to a certain extent, who can blame them? Not me. It’s a horrible feeling to see the hard-earned money you have put into the shares of a technology company go up in smoke. And even worse when you see that the company’s executives and equity underwriters made out just fine, as they managed to cash out early and left public shareholders holding the bag.
Yet the reality is that the equity markets are still the best place for most people to invest and grow their money for retirement, their kids’ college education, or a home. You can’t just let the money you make as a doctor, salesman, teacher, attorney or civil servant pile up in the bank earning virtually no interest. And government bonds, safe as they are, also pay very little interest.
In late 2008 and early 2009, when people were just throwing the shares of valuable stocks on the ground, you could buy GE for $5 a share.
This may make you feel smug and safer, but the reality is that with inflation you are losing ground. And the bank is laughing at you, because even as it pays you half a percent on your passbook savings account, it turns around and lends that money out at 6 percent to 10 percent.
The reality is that alternatives are not just scarce, they’re almost non-existent. Residential real estate proved to be a terrible option in the 2007-2009 financial crisis, and there are still way too many apartments and duplexes in most U.S. cities today, driving down the value of owning a building.
That leaves the stock market as one of the few places to help your fortune grow, and that’s not a bad thing at all. Wall Street is not only not rigged against you, but with a little training and encouragement, you can learn how to lean against the majority at key moments to beat those guys at their own game.
You see it’s not just about betting on the right technologies and management teams, it’s doing so at the right time. And it’s also about increasing your bet size when scary events lead most investors to lose their heads and sell willy-nilly, making even the best stocks super-cheap, and putting the odds of winning the most heavily in your favor.
Trust me on this, I have seen it all since I started to invest in tech stocks not long after leaving graduate school in the early 1980s, right into the teeth of the Reagan recession. Unemployment was much worse than it is now, around 11 percent, companies were shutting down all over, inflation was running toward 15 percent, it was a mess.
And yet looking back, holy cow: What an opportunity that was at the tail end of a bear market. No one wanted to own stocks back then, but in reality we can see that there were bargains absolutely everywhere you looked.
— The great drug company Merck (MRK) was going for a split-adjusted 60 cents in the early 1980s. Twenty years later it was cresting $60, a 100x gain.
— General Electric (GE) was going for a split-adjusted 40 cents back then; twenty years later it was $42, more than a 100x gain.
— In 1986, you could buy Microsoft (MSFT) for a split-adjusted 7 cents. Twenty years later, it was $44, a 625x difference.
— In 1988, you could buy EMC (EMC) not long after its IPO for a split-adjusted 9 cents. Just 12 years later, it hit $103, an 1,145x difference.
To be sure, I am cherry-picking the very best companies that were the big winners, and there were many that looked almost as good as these but disappeared under the sands of time due to poor managements, poor strategies, overmatched products or just plain bad luck. But the truth is that picking just a few amazing winners, and having the guts and foresight to hang onto them through thick and thin, can compensate for a whole lot of lesser choices.
And it is really not that hard to spot those winners early in their lifespans because the success that becomes obvious to everyone when the companies mature is almost always equally evident when they are a lot younger. A great example right now is Workday (WDAY), which I recommended to readers a month after its IPO in December 2012.
It had everything going for it that I look for in an emerging growth stock: A unique set of products at the leading edge of a technology revolution, a quickly growing customer list, proven management, and incredible skepticism about its prospects from analysts. At every step along the way, analysts bad-mouthed Workday’s opportunity and mocked its valuation. Yet I recommended it over and over because you just do not see such companies come along very often, and especially not ones run by men who had done it all before, in this case as founders of PeopleSoft, which was one of the great stocks of the 1990s until it was bought by Oracle.
My persistence on this one has paid off, because now all of sudden Workday is being upgraded and celebrated — after the fact for most, of course — after it reported Wednesday that it beat expectations on revenues and earnings in the last quarter, and raised guidance.
I’m telling you this story because all of the skepticism about tech stocks that has built up for investors since the crashes of 2000 and 2008 has had the effect of making even the best companies in the industry kind of ridiculously cheap. And cheapness is its own reward. Cheapness is one of the best forms of risk control. If you can buy smartly and with conviction when everyone else is mournful, and worried, and still kicking themselves over mistakes of the past, then you can make out very well at any point in the cycle. It just happens to be truer today than ever because most of your competitors out there — other potential investors — still cannot bring themselves to the task.
I’ve learned that every bull and bear cycle has the same emotional fingerprint. People are always skeptical, afraid, pessimistic and aloof at the beginning of the cycle when stocks are cheap and should be bought, and they are always buoyant, excited and overly optimistic near the end of the cycle, when stocks are expensive and should be sold. You can track these cycles using all kinds of metrics, not just through anecdotes or hunches.
Without doubt the best time to invest in our generation was in late 2008 and early 2009, when people were just throwing the shares of valuable stocks on the ground, and you could buy General Electric for $5 a share. I had warned readers to get out of stocks in September 2007, two years before, and yet by the end of 2008 and start of 2009, I was pounding the table urging people to buy at what appeared to be prices that they would never see again.
Yet the strange thing is that I still largely feel that way today. No, of course stocks overall are not nearly as cheap as they were in 2009. But neither are most people so excited about stocks that they are throwing money at them willy-nilly, as they did in the late 1990s just as crazily as investors did in 1907 amid the steel consolidation craze, or in the late 1990s amid the dawn of the Internet era.
Partly due to the lingering effect of the pain suffered in 2001-2002 and 2007-2009, there remains a smoldering pessimism among investors that has resulted in an enduring cheapness to many technology stocks. And cheapness in the face of strong prospects, as I said, is its own reward.
And that cheapness is something that you can exploit today if you are willing to dream big again.
Do You Want These Advantages from Estate Planning?
What motivates you to get going?
Sometimes the weather gets us down and sometimes it’s our attitude. Sometimes you need a little help to get started.
My approach looks at advantages. I motivate people to focus on the advantages they want. You may find this works for you as well.
Charles B. needed help. He lost his wife and tennis partner of 39 years. He was, very understandably, sad. He was not motivated to tackle anything, let alone an update to his estate plan.
“It’s too depressing to think about.” Charles said.
“Well Charles,” I said, “Try something different. Let’s look at the advantages. Tell me what you want to do for your family and I’ll help you get started.”
Estate Planning Goals
Which advantages would you (and Charles) want to enjoy?
- Save money on taxes – less of your money is spent paying too much in taxes.
- Place the right person in charge – you need to trust someone to carry out your wishes. This ensures the jobs you need done are done right.
- Protect young people – make sure you set up a trust to help secure the future for young people.
- Reduce the costs of probate – without an up-to-date will your family may be forced into a court battle.
- Avoid family disagreements among family members – help minimize the risk of this happening by spelling out your wishes.
- Support your favourite charitable causes – continue to make a difference after you’re gone. Giving a gift to charity in your will can also help reduce taxes.
“Can I have more than one goal?” Charles asked.
“Certainly. You can choose a couple.” I said. “We can create an estate plan to meet your wishes and goals. A cornerstone to your estate plan is making your will. Without a will to reflect your goals, there’s bound to be disagreement.”
“My family gets along. I don’t think we need to worry about that.” Charles said.
“Perhaps not,” I said. “But you do need a will to specify your wishes. Your executor carries out your wishes. You need to choose your executor.”
I told Charles I have seen too many situations where children say:
- “My father wanted me to be in charge”;
- “I’m the oldest so it is my job and duty”; and
- “Dad told me what he wanted”.
So, why leave things to chance?
If you do not have a will, the government writes one for you. The government is not interested in minimizing your taxes. They have inflexible rules that do not respect your family’s special needs. These rules can add years to the process of probating your estate.
Years of your hard work, investing your assets and saving money can be squandered by that process. Beneficiaries may have to wait years after you’re gone to receive the full benefit of your estate.
An estate plan can reduce taxes, continue your charitable works and even protect your pets.
Your family can struggle after you are gone.
But they do not have to.
Give your family all the advantages you can with a professionally-prepared estate plan.
Edward Olkovich (BA, LLB, TEP, and C.S.) is an Ontario lawyer, nationally recognized author and estate expert (MrWills.com). He is a Toronto based Certified Specialist in Estates and Trusts. Edward has practiced law since 1978 and is the author of Executor Kung Fu: Master Any Estates in Three Easy Steps. © 2014
Managing The Cap
Cowboys owner Jerry Jones: “Free-agency busts hindered Super Bowl chances”
Jerry’s problem is just like yours. Previous commitments limit your ability to accomplish what you would like in the future.
The headline was atop a recent Sports Illustrated story. NFL teams, like the Dallas Cowboys, are subject to a salary cap. If a high salary player does not perform up to expectations their salary still counts and there is less money for other players that might contribute. It limits flexibility and the chance to improve. Poorly managed salary cap issues have doomed the success of more than one team.
The effect is exactly the same in your household. Everyone has a budget cap. If you exceed it, you will be punished. Maybe not immediately, but soon. You reduce your flexibility and your ability to control your future when your cap space is used up by previous commitments that no longer contribute value.
Things like credit card payments for clothes or vacations or furniture. There is also the extra amount you pay to lease a high-end car instead of something more modest. Same with bigger mortgage payments on a bigger house.
When you commit to make payments in the future, you have committed part of your budget cap and that amount is no longer available for anything else. If people made explicit statements about how that worked there would be fewer problems. Something like, “If I spend this extra $400 a month for this car that I like instead of the one that would serve well, I will need to give up golf club fees to make it work.”
The more likely response is to borrow more to make the payments or to save less. Either way you are paying for the present with future dollars. Someday the future will appear and there will be too little money to pay for things that matter.
It is the old story. You can only spend a given dollar once. If you commit future dollars to payments, they are spent today even though they may not come out of your bank account for a while.
Just like Jerry Jones, though, you cannot have control of your future if you commit to things that should not have been part of your life. Flexibility is an important asset. Do not give it up easily.
Don Shaughnessy is a retired partner in an international public accounting firm and is presently with The Protectors Group, a large personal insurance, employee benefits and investment agency in Peterborough Ontario.
IT’S WHO YOU KNOW!
The person who first said, “It’s not who you know, but what you know”, was obviously never forced to market an idea or look for an investor. This particular individual must have been fortunate in his dealings because in today’s market economy, using contacts as a resource is an indispensable practice of business.
People of importance always have a barrage of less prominent individuals circling around trying to benefit from their knowledge and networking ties. Your objective is to track the person with the most influential alliance to the center and make the exchange needed. One rarely receives a second chance, so the first opportunity to “do business” with the key player or even the network as a whole, will be closely scrutinized and dictate your ability to re-enter that network. Make the first encounter a positive experience that clearly shows what you have to offer.
As a professional, you can develop a substantial network of influential individuals in different areas of the markets you work in. The most effective network, which is always the underlying goal, is created when there exists the greatest span of contact from the fewest number of individuals. This requires the careful selection of those individuals who, for your particular needs, open the greatest number of doors to those areas that most affect your needs. In the end, the goal of this network is to further your needs and create opportunities that you could never have achieved.
For many years, there has been a negative connotation attributed to the use of networking as an unfair answer to a difficult situation.
Remember, no one will help you if you have nothing to offer them. Your abilities will be used in return for the use of someone else’s; it is a simple quid pro quo exchange. The advantage comes from your ability to locate those individuals who are able to influence your business in the future. This process is not as simple as it may seem because it requires a great deal of time, thinking and foresight.
Foresight is a result of one’s ability to be proactive. Recognizing the need for a greater network of associates after a crisis arises is of little use to your business. Networking is a constant process that demands time and effort prior to needing access to those individuals. Relationship of familiarity and trust that are of any value to difficult situations are of the type that takes months and sometimes years to develop
Maintaining a financial liaison within your personal network that links you to an even larger network of individuals is indispensable. In order for the establishment of such an inner-community to be accomplished one does not have the luxury of wasting precious hours with those that cannot help your situation now or in the future. There is little room for those who are superfluous.
Industrial alliances should be forged with those who create a value-added relationship with your own. There are many market niches that when combined create a more beneficial whole.
The location of value added individuals is dependent on having a good idea of what your particular needs may be at any given time. The most effective method of scanning for the people you want is to be active within the your industry, consistently looking at trade publications, and making a point of attending as many trade shows and conferences as possible.
Besides keeping you abreast of the newest technological advances, it soon becomes apparent who those individuals are who are most attuned to the pulse of the industry. These are the types of people crucial to any network. Networking is about expanding your personal and business reach.
Start the process today rather than tomorrow. The crucial step requires the identification of your needs, your businesses’ needs, and your particular industry needs. Once these needs are identified, proceed by making an effort to identify these individuals in their particular arenas. Identifying becomes only the first step in the process of befriending these key players and convincing them to become part of your network.
The process does not explicitly make someone a member of a network; however, the increase of familiarity and trust, one becomes a party by association. These associations grow exponentially and soon you have a strong foothold in other influential networks that continually increase the number of opportunities available to you and your business. Although time consuming, a solid network at work can pay massive dividends.
Opportunities are the key to success. This success, that everyone in business wishes to become a part of, requires an exposure to situations that no one single individual could discover working as one single individual. As the size and quality of your network grows, your ability to access the most critical prospects to your business grow at a rate exceeding your wildest expectations.
BY: Mark Borkowski is president of Toronto based Mercantile Mergers & Acquisitions Corporation, a mergers & acquisitions brokerage firm. He can be reached at www.mercantilemergersacquisitions.com or firstname.lastname@example.org
Argentina made headlines last month when its currency, the peso, crashed 15 percent in one fell swoop. The government had little choice but to devalue the currency after the Argentine Central Bank had sold off most of its dollar reserves — at the staggering rate of $1.1 billion per month — in a futile attempt to defend the peso in foreign exchange (FX) markets.
While this saga was in the news just last month, the story about what led to Argentina’s devaluation goes back much further.
Fiscal mismanagement, rampant money printing, and failed currency exchange controls by the Argentine government over many years culminated in this moment of truth, with no choice but to devalue the currency, after the global FX market forced their hand.
You could chock this up as just another emerging market crisis; a banana-republic too deeply in debt, with no other option but to devalue its currency overnight. But this also serves as a cautionary tale for developed economies whose own finances are beginning to resemble those banana-republics of yesteryear.
Sadly, this includes most of Europe, Japan and even the U.S. today. After all, our deficits and the long-term downtrend in the dollar are no less real than those experienced in some South American economies.
Economic freedom and prosperity go hand in hand. What’s more, economic freedom can lead you to some of the most promising and profitable global investments if you know what to look for.
Stock markets in countries boasting superior economic freedom scores should outperform U.S. stocks over the long run.
The Heritage Foundation, in partnership with The Wall Street Journal, publishes an annual Index of Economic Freedom, as it has been doing for the past twenty years. Routinely, the countries near the top of this list are fast-growing emerging markets with:
* LESS heavy-handed government intervention …
* MORE fiscal and monetary responsibility, and …
* Economies with more freedom to innovate and where investments can prosper.
It’s no surprise that the U.S., Europe, and Japan have been slipping lower in the rankings nearly every year. In the 2014 Index of Economic Freedom, the U.S. finished 12th and has the dubious distinction of being the only country to experience a loss of economic freedom in each of the last seven years!
At least we can take some comfort in knowing that we have company; many other developed nations are ranked even lower including: Germany (18th), Japan (25th) and France (70th).
The payoff for investors is this: Economies achieving high levels of economic freedom outperform others in dynamic economic growth and long-term prosperity, as the authors of this index correctly point out. Or, to quote directly from the 2014 Index of Economic Freedom (emphasis mine):
“Economies rated ‘free’ or ‘mostly free’ … enjoy incomes that are more than three times higher than average incomes in all other countries and more than 10 times higher than the incomes of ‘repressed’ economies.”
Cleary, there is a well-documented link here between economic freedom and prosperity for those willing to invest in free economies and markets globally.
As an added bonus, it is much easier today than ever before to invest globally with the simplicity of low-cost ETFs and the ease of U.S. listed ADRs, representing more prosperous international stock markets.
For example, at the very top of this year’s rankings are two fast-growing Asian economies, Hong Kong at #1, and Singapore at #2. In fact, Hong Kong has been top-rated in economic freedom for 20 straight years, thanks in large part to a small government, low taxes and a light regulatory burden.
As a result, Hong Kong achieves a high degree of “market openness,” according to the index, because it consistently gets high grades in fiscal, financial and investment freedom … three of the MOST important components to economic freedom and long-term prosperity.
* Financial Freedom is the all-important factor of responsible monetary and fiscal policies; where governments don’t exercise too much control over the financial sector and don’t abuse the financial printing press. Hong Kong ranks 1st … the U.S., 19th …
* Investment Freedom means open markets with little or no government interference in the free flow of capital. Government doesn’t exercise undue influence over (or control) particular sectors of the economy. Hong Kong ranks 2nd; the U.S. trails far behind in 46th place …
* Finally, Hong Kong ranks 17th in Fiscal Freedom, meaning restrained government spending and a lower tax burden imposed on businesses, individuals and investors … the U.S. ranks a dismal and distant 154th by comparison.
It makes perfect sense why stock markets in countries boasting superior economic freedom scores should also outperform U.S. stocks over the long run. In fact, Hong Kong, Singapore, South Korea, Sweden and others that get consistently high marks in financial, investment and fiscal freedom are also likely to have the best profit potential for investors.
Dying isn’t free (no good deed goes unpunished!)
I know this sounds a bit irreverent or flippant however it is meant to stimulate some hard thinking about the real costs of dying. Sure, there are lots of lists around, but I haven’t found 1 yet that covers everything I have seen in nearly 43-years in this industry. Is this list perfect? Absolutely not – but it will get you thinking about your own and your family’s situation. Remember, not all of these will apply to you – but some will – and the costs range widely.
* Probate Fees * Legal Fees * Copying and certifying fees * Paid searches for titles, etc. * Legal notifications to family * Legal notifications to creditors * Asset Transfer fees * Estate Accounting Fees * Terminal Tax Return Fees * Estate Tax Return Fees * Rights and Things Tax Return Fees * Ongoing Tax Return Fees if estate not settled within 12 months * Testamentary Trust Tax Return Fees *Preparing and filing tax election fees (estate and personal) * Executor and Trustee Fees (annually until Estate and all trusts closed) * Executor and Trustee disbursements – copying, telephone, faxing, certifications, mileage, parking, travel expenses * Valuation fees – real estate, listed personal property, personal property, real estate and other capital and/or depreciable property * Transfer costs for title transfer to Executor and/or Trustee and eventually to residual beneficiaries * Commissions paid for asset sales – real estate, estate sales, sale of listed personal assets, if necessary * Commissions paid to investment advisors for selling stocks and bonds not held in managed-money accounts *Income taxes payable – terminal tax return, estate tax return(s), Rights and Things tax return, Trust tax return(s) * Tax due on transfer of pensions and registered assets to other than spouse * Shrinkage of realisable asset value due to urgency of sale – tax paid on FMV not $ received – must replace lost $ * Account closing fees on nominee accounts and self-directed investment accounts
* Court fees – Probate and other as necessary if Will contested * Court costs if you die intestate * Banking Fees – estate bank accounts, trust bank accounts * Rental Fees – safety deposit box or other secure location *Funeral, memorial and related costs – cultural, faith-based, community or family expectations. Wake or similar * Costs of collecting promissory notes owed to deceased – loans to family members and businesses * Terminal care costs not covered by Government, group or personal plans * Legal costs to defend Will from challenges * Payment of all legally enforceable debts – including ones you guaranteed or co-signed * Perpetual pet care * Costs of care for children and other dependents (maybe your parents!) * Cost to close your social media accounts * Payment for ongoing business management until it is sold * Short-term emergency funds for survivors * Ongoing income for survivors including education costs * Cash Bequests * Murphy is alive and well – expect a visit along with family discord! * Your guess: ______________________________
I can promise a few things about this list: a) your estate will have at least one cost not included here; b) you will be very unpleasantly surprised at the total amount of money (and time) involved; c) your estate will be cash-poor – not enough cash in the bank to pay these costs which means that; d) the net value of your estate, without proper planning and a source of replacement tax-free cash, could even be bankrupt which means your family and heirs would get zero. Do you and your family need assistance?
Posted: February 26th, 2014 under Children, Debt, Estate Planning, Financial Planning, General, Investments, MONEY®, Mutual Funds, Pension, Taxes.
Tags: accounting, costs, debts, dying, fees, legal, taxes
Why Be Disciplined?
Yaman Saleh, founded a LinkedIn group called The Trader and while still small, I have found it to be among the more worthwhile. You should consider joining here.
Yaman is a polymath and has good instincts as a group manager. One of his good instincts is that he comments on articles I publish.
Recently I published one on knowing what you mean by profit, so you can focus more effectively. I used a farmer as an example of someone who described profit in ways not connected to money.
Yaman was kind enough to extend the thought into ways of being successful.
“The law of the farm” is a phrase Stephen Covey used. We can’t speedup or slowdown natural principles. We must adhere to them, or break ourselves against them.
The more I know about technology, the more I appreciate that principle. Seeking instant gratification, on any dimension, embeds a snowball effect.
The idea is that some things work at their own pace and they do it without regard to what you want. Farmers seem to know this and they also have non-money ways to think about profit. The two may be connected.
Success is a goal most people have, but some try to do it while working against the natural order of things. They fail. As Yaman points out, break themselves against the immutable facts.
You cannot make many things happen more quickly, cheaper or easier. Things have their own time scale and requirements. Financial planning is a methodology that is that way. Time and its engine, “compound interest” are crucial.
Catching up is much more difficult than starting sooner. Cramming doesn’t work. Like farming, you cannot make corn grow faster by yelling at it, wanting it more, or promising it some reward.
Trying to accomplish a 30 year plan in 5 years denies reality. If you try it, you will find that you take huge risks that you would never take in a more extended period. Penny stocks for instance. I need a 40x my money deal, so there must be one there somewhere. You will probably lose both the money and a significant share of the time remaining.
The thought is not a new one. For those old enough to remember Earl Nightingale, you will recognize the similarity.
“The only person who succeeds is the person who is progressively realizing a worthy ideal. It’s the person who says, “I’m going to become this and then progressively works toward that goal.”
Progressively is the key. Instant success is an illusion.
According to Earl, the “day” is the building block of success. What am I to do today to reach my thoughtful goal? What have a learned today that will cause me to adjust that goal or its method of achievement? What should I do tomorrow to more perfectly achieve my ultimate goal? What mistake did I make today and what did it teach me? Every day matters.
Seen this way, the long run is just the sum of thousands of short runs. Each one managed and studied.
It need not be a form of martyrdom. Earl addresses the day in another way.
“Learn to enjoy every minute of your life. Be happy now. Don’t wait for something outside of yourself to make you happy in the future.
Like the discussion on profit, discover what you value and seek more of it. Balance. You will do more of what you enjoy.
Eventually, and often too late, we discover that we could have done more or we could have done it differently.
“We are all self-made, but only the successful will admit it.”
“Hurry up” probably works in football because it confuses the defense. There is no advantage to confusing yourself, so using time effectively is crucial to success.
None of this is difficult or complex.
As John Snobelin said last year, “Success is merely the ability to follow simple rules.”
Don Shaughnessy is a retired partner in an international public accounting firm and is presently with The Protectors Group, a large personal insurance, employee benefits and investment agency in Peterborough Ontario.
Do You Want a Cheap Will?
What does it cost to protect your family with a professionally-prepared will?
Can you get an inexpensive will?
I’ll share a secret about lawyer’s fees for preparing wills.
The other day, I was explaining estate planning to an audience:
“Estate planning is what you do for the people you leave behind. If you love your family, you’ll find time to make an estate plan. Everyone needs a will and powers of attorney.”
At the end of my talk, a number of people had questions. Can you guess what question most people asked me? I’ll tell you in a moment.
Typical Estate Planning Questions
Here are some questions from a group of 50 people:
- What are my rights to a share in property as a common law spouse?
- Why do I have to pay taxes if I gift my summer home to my son?
- Who says I can’t treat my children unequally?
- What are the dangers of jointly-owned real estate?
- Who should I choose as my executor?
- How can I protect the value of my business if I die?
- Who should get my life insurance?
- Who should have my powers of attorney?
- What is the best way to deal with my end-of-life care?
The point is that estate planning is personal. Every answer to each of these questions depends on your situation. Your marital status alone makes a big difference in your will. Lawyers need to know if you are single, divorced, separated, in a second marriage or in a common law relationship.
But, the question I was most frequently asked was:
“How much will it cost to prepare a simple will?”
What is a Simple Will?
I replied with my own questions:
- How long do you think it takes to prepare a simple will?
- Is a twenty-page will simple if you don’t understand it?
- Is it supposed to be inexpensive because it is simple?
- Is it simple because it is easy to understand?
- How long will it take to answer all your questions?
- What about the questions the lawyer must ask you?
It is Not Easy Making Things Simple
It takes experience to know what must be included in a will.
I am a Certified Specialist in Estates and Trusts Law. I also advise executors who administer estates. This gives me a different perspective on drafting wills. I know what makes the executor’s job harder when a will is poorly drafted.
I am also involved in estate litigation over poorly drafted wills. Poorly drafted wills create problems and disagreements among family members. When it comes to dividing an estate pie, everyone gets their own lawyer. They fight to ensure they get their slice of the pie. If you try cutting your spouse out of your will, your family will learn what bad advice really costs.
Remember: wills are legal documents courts review, interpret and invalidate.
You may believe wills are standard documents and that every lawyer simply prints the same one off their computers. Some lawyers do that. Some lawyers actually tell clients to wait in their office while they prepare their wills. The fee for this can be a low couple of hundred dollars.
What’s Wrong with That?
You may be getting the same will everybody else gets – with no specific advice.
Your will is supposed to work for you and your personal circumstances. What good is a will if it does not meet your personal needs? It must be tailored to your circumstances. Otherwise, it can do harm.
It is the advice you receive before you make decisions that is important.
Wills are the cornerstone to an estate plan. But they are only part of an estate plan. Estate planning is more than having a will; you need to identify who holds title to your assets and your tax liabilities.
You need advice on choosing the right executor, beneficiaries and what you need to do to meet your family law obligations. Your marital status, rights and obligations under the law alone require special treatment.
Your lawyer needs to know about your assets, real estate, insurance, investments, or business. Your children’s needs can be complex if guardians and trusts are required. Tax planning is necessary even with a “simple” will.
To do all this, lawyers need to meet privately with you. You need to share confidential information.
Some lawyers charge inexpensive fees and make good wills. They may have no overhead. They can provide excellent services at a low cost. There are competent lawyers in every price range. Paying a high price for a will does not guarantee you get a highly qualified wills lawyer.
But how do you know?
Every will involves preparing an estate and tax plan. Would you go to the cheapest dentist in town? If you are looking for a cheap will, ask yourself:
“How do I know if there is anything missing in my simple will?”
Figuring this out can cost your beneficiaries tens of thousands of dollars in legal fees. It costs to fix a simple but poorly drafted will.
Would you ask your plumber to fix your electrical wiring? The answer is obvious. Making your will is an investment to prevent problems, not create them.
Hire a lawyer who spends their time making wills.
Edward Olkovich (BA, LLB, TEP, and C.S.) is an Ontario lawyer, nationally recognized author and estate expert. He is a Toronto based Certified Specialist in Estates and Trusts. Edward has practiced law since 1978 and is the author of Executor Kung Fu: Master Any Estates in Three Easy Steps. © 2014