3 questions lawyers can ask when in receipt of a bonus or profit distribution
Periodically, some lawyers will be fortunate enough to receive a bonus, or if a business owner, profit distribution, as additional amounts of money for themselves.
What is fascinating, is often people will have entirely allocated and ‘spent’ this money before it even arrives.
Here are three questions aimed at assisting you to avoid this situation by maximising the utility of such good fortune.
1) What percentage of my bonus (or dividend) will I use to improve my financial situation and what percentage will I spend?
Decide beforehand what component, even small, you will allocate to improve your financial situation.
You owe it to yourself to make your hard work count in actually building wealth. Imagine the impact of doing this on how soon your home loan is repaid over time. Imagine the impact of doing this on your investment portfolio in 1 year, 5 years and 10 years.
2) At this point in time, do I wish to invest in myself?
Be it a couple of insightful books that make you a better leader or people person, a subscription to audible.com, a course to master communication and EQ skills or further traditional study, investing in yourself can be valuable. Particularly if it makes you more employable or directly increases your income earning capacity.
3) For the funds I am going to save or invest, how will I put this to good use?
Most of us have competing financial objectives, so careful consideration of this is a great idea. It may be paying down mortgage debt or getting rid of that credit card balance and creating a cash buffer. It may be starting an investment portfolio or adding to your superannuation account. Or a combination of these.
Shawn Achor has described it well when he said ‘common sense is not common action’.
Many unfortunately have too little to show for their hard work. Prudent money management can get lost in the hustle and bustle of living a busy contemporary life.
At times it pays to seek trusted and considered advice, so that you can feel the comfort and peace of mind in knowing you are striking the right balance between living well now and being able to afford to live well in the future.
Please contact us if we can be of assistance.
About the author
Sam Gray is principal adviser and director of Incito Wealth. Sam runs Incito Wealth with passion and an innovative heart-centred and purpose-driven approach, with the highest intent of serving and inspiring people to better life outcomes. Sam is particularly keen to listen well and cares about your well-being, both financial and otherwise. Sam is author of Money Mastery: the wise sage and the money journey, available on Amazon.
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