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Personal Finance Considerations for Home Service Business Owners During COVID-19

Personal Finance Considerations for Home Service Business Owners During COVID-19

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Posted by Kevin Barlow

April 30, 2020

About our guest author

:

Kevin Barlow of

Miracle Mile Advisors

in the Los Angeles area has over 13 years of professional experience in financial services working with high net worth individuals and families on customized investment solutions.

He holds the Chartered Financial Analyst designation and is a member of the CFA Institute as well as the CFA Societies of San Francisco and Orange County. Kevin can be contacted directly at

kbarlow@miraclemileadivsors.com

.

Now is a great time to think about personal finances

Doing something is better than nothing. And starting today is better than starting tomorrow.

Here are a few reasons why now may be a great time to dig in and evaluate your financial situation:

  • You potentially have the extra time if business is slower than past years at this time

  • Tax deadline is approaching

  • Post-pandemic may change your business for the long-term so planning your personal future is more important than ever

Review the below four areas of personal finance that may be good to think about and consult a tax or financial advisor professional about.

1)  Financial planning for all 

  •  CARES act allows you to access money Retirement accounts with no penalty- but you will owe taxes

  • You have until July 15th, but filing taxes now can give you faster access to your refund

  • Interest rates have decreased, now is a good time to reach out to your business lenders and mortgage holders to renegotiate 

2) Ideas for first time investors 

  • Consider a Roth IRA if you qualify so your earnings grow tax free

  • Look for broad market exposure instead of company specific risk 

  • Stocks currently provide higher dividends than bank accounts, CDs or bonds

3)  How to optimize existing portfolios 

  • Focus on companies with strong balance sheets and income statements 

  • Selectively sell stocks that have losses to reduce your tax bill this year 

  • Better risk/reward characteristics in Large Cap US Stocks 

  • Don't time the market!  Make a lot of good decisions instead of trying to make one perfect decision

4) Estate taxes 

  • Consider selling or transferring part of your business to next generation of ownership at depressed values 

  • Consider charitable donations directly from your retirement account for greatest tax benefit 

Stay in "The Game"

Lastly, a quick reminder that short-term changes in the U.S. stock market are expected and are often sensationalized by the media.

The two charts below tell a story.

February 2020 through April 2020 S&P 500 Index

1871 through 2017 S&P Index

The first one shows the decrease in the S&P 500, a collection of large public companies, over the last several months.

And the second chart shows that this decrease will ultimately be just a blip and stocks and businesses have done well through out history, even through depressions and wartime.

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Legal disclaimer

Housecall Pro is offering the Coronavirus Evening Update for Home Service Businesses for informational purposes only and to foster thoughtful communication and discussion regarding the COVID-19 pandemic; Housecall Pro is not offering advisory services or otherwise advising or representing any members of the group invited to participate.  Housecall Pro is not offering legal, medical or other professional advice in the Coronavirus Evening Update and makes no representations or warranties regarding the content of the Coronavirus Evening Update.  Participants should obtain independent advice relating to their businesses and their particular circumstances.

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