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No one has ever said sales, and self employment was easy. If you’ve been in business for yourself for anytime at all you know that business can go up, and it can go down. One of the most difficult challenges to working a straight commission job is counting on a deal to close, and then it does not. Sandy Blake of Columbus, OH knows all to well about this challenge. (name changed to protect id)
Sandy has been a client of mine for 4 years now. She’s a hard working realtor, and takes a lot of pride in providing her clients with superior service, and a buying / selling experience. She like everyone else in the residential real-estate market, felt the contraction that the 2008 recession brought. After struggling through this, she decided to seek our services in how she could hedge against the loss of income in the event of another downturn.
For the most part the market in her area continued to bounce back, and in the last two years has really been good, that is until now. While the market in her area has, and is still growing her personal business took a hit due to unforeseen problems with a development deal she was working on.
For the last several months Sandy has been working on a deal that would really take her production this year to the next level. Because this opportunity was so attractive she has spent many hours, days, even a couple months on getting all the details nailed down. There was only one problem, the deal fail through. Due to circumstances outside of what she could control she lost the deal. What promised to be a very lucrative opportunity turned in to what could have been a nightmare. I say could’ve because fortunately she insured her business against such an event.
Because Sandy had struggled through the 2008 downturn, she had taken out a plan 4 years prior to guard against such an event. What could have been tragic was avoided, and has given her an income stream to pivot from a loss of commissions to other opportunities to get income back up.
I believe whatever business your in, whether real-estate, contracting, law, or other entrepreneurial sectors, you need to consider such a plan. If you’ve been in business at all, you know that slow times, and economic downturns will happen. The question is will a slow time be time struggle, or a time of strategy? So how would such a plan work?
A plan is set up and underwritten through an insurance company that offers a guaranteed return and protection on insurable events. Money that is both deposited, and withdrawn can be tax free in most cases. By structuring the plan in a qualified tax deductible fund money invested is deducted from the gross income. Money withdrawn as a benefit on insurable events are looked at as a benefit, and therefore are not subject to tax either. This gives a tremendous tax smart savings plan to many self employed clients.
If you would like to see more information on what a plan like this could do for you, feel free to contact me for a free prospectus