What Are These Articles About? These articles will discuss some of the contemporary institutions that relate to personal income and financial planning and discuss advantages and disadvantages of each and how this information could be formulated into a variety of financial plans tailored to each individual's unique characteristics, talents, and life situations. What are Some Specific Institutions?
Corporations- Corporations became more useful in the early 1800's when a more intense Industrial Revolution began. They were ideal for raising large amounts of
money and giving a central direction to an industrial project. Over the years they have changed from supporting their employees for life to providing wages and/or salary for a season of an employee's life as well as medical and retirement benefits. Sometimes additional benefits are offered such as Employee Stock Ownership Program, performance awards, etc.
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Advantages of corporations include having the resources to support employees with linear income and medical and retirement benefits. These organizations tend to be very helpful at the early stages of our financial journey. However, the disadvantages are that we cannot depend on corporations to take
care of employees for life any more. We must develop our own financial plan. Other disadvantages are that in large organizations like corporations many people are "just numbers on a spreadsheet." This means that if there are business changes like loss of customers, change of ownership, mergers or acquisitions you could lose your job without much or any notice. "Part-Time Jobs"- PT are any work that produces linear income to support what you are lacking in your FT job and/or what you need to reach your financial goals. There are many businesses and nonprofit organizations that are looking for part-time help. Certain types of organizations tend to lend themselves better to part-time work unless you are seeking management
positions like nonprofits, for example, or retail businesses.
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The advantages of a PT job is immediate cash. As previously mentioned, since corporations no longer take care of their employees for life, it's each of our
responsibility to set financial goals and plan. Some FT jobs do not pay enough to reach our financial goals. ¡3
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One disadvantage that could occur is interference with FT jobs. It's important at the beginning to plan the PT job's hours and responsibilities around your FT job's schedule and responsibilities so a conflict of time or energy does not occur or occurs infrequently. Another disadvantage could occur during tax time. If you end up in a different tax bracket because of income, the time and energy put into the PT job and income earned may not be worth it. You just need to weigh the use and need for immediate cash against the final amount you pay in taxes.
Linear-Income Small Businesses- LinearIncome Small Businesses are usually soleproprietorship, partnerships, Limited Liability Corps (LLC) that someone forms based on a learned skill that translates into a service provided or products or a product
they can sell for profit.
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The advantages are you can set your own hours and have "tax write off's" in relation to overhead and expenses at least in some countries. The disadvantages are that it's linear income (you don't get payed if you don't work), you usually have immediate expenses to pay to start and maintain the business, you need to deal with all kinds of customers, you may need to multitask unless you hire help or keep it small, and you need to be aware of Federal, State, and Local laws as pertain to your business.
Residual-Income Businesses- ResidualIncome businesses are businesses that
make money even after you work. In other words, you do the work once and cash flow continues to come in years after you have stopped working.
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The advantages are it's residual income and many of these type of businesses have fantastic communities you can become part of to gain encouragement, suggestions, and support as you grow your business. This is why I'm part of Six Figure Mentors. Disadvantages include sometimes it may be more challenging to get off the ground than a conventional business. It also usually requires some initial investment and some type of overhead costs.
Investment Institutions- Investment institutions are any organizations that help investors financially grow money they invest in various vehicles such as stock, bonds, mutual funds, commodities, gold, etc.
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The advantages are residual income can be created if the investment goes your way and retirement planning can also include many of these investments. The disadvantages include there is a
necessary initial amount of cash that needs to be invested and time is required for education in investing unless you hire and investor or investors to do your homework for you. In Summation The basic institutions we all deal with when creating our financial path are corporations, "part-time jobs," linear income small businesses, residual income small businesses, and investment institutions. Part 2 will discuss how to chose which combination of institutions work for your own financial journey. For more information on a residual business
and how to build the life you would love to live, check out this link: http://connect.thesixfigurementors.com/sp/ free-trial-long-vid/sales-pages?id=skmartin