How To Set and Achieve Your Financial Goals?

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When an entrepreneur decides to start a business, different options are available to them to finance and execute his project. These are goodwill and key money. Often, these two notions are confused. Discover their differences in this article. The goodwill A goodwill can be defined as a set of tangible and intangible elements allowing a company to carry out its activity. In other words, the sign, the clientele, the premises, as well as all the equipment necessary for the activity of a company constitute a business. The leasehold rights are also part of it. It should be noted that the price of the purchase of a business is quite high because, in addition to acquiring the right to lease and the premises, there is also the acquisition of the clientele. It should be noted that a business can only exist under two conditions: it must have a clientele, and it must constitute commercial activity. Generally, a business is sold when a company wishes to be sold. Moreover, a business can be partially sold, i.e., only a part of the elements that constitute a business is sold. The seller must be registered in the Register of Commerce and Companies or in the Trade Register. The key money When selling a business premise, the buyer is obliged to pay a sum of money, in the form of additional rent or compensation, to the owner of the premises in addition to the rent already negotiated in the lease contract. This is the key money. It is a sum that attests to the right of entry into the premises. The key money is considered to be a rent supplement when its amount is accounted for in expenses. It is a sum that allows foreseeing the possible risks that the rental value of the area does not increase more rapidly than the rent. It is tax-deductible. The key money is considered as an indemnity when it is a counterpart to the commercial advantages provided by the former owner or when it is a depreciation of the premises. It is an intangible asset that cannot be amortized or deducted for tax purposes. Very rarely, key money can be considered in a mixed way, whether it is in both cases at the same time. The lessor can only demand the key money if the premises were unoccupied until then. Tax consequences For the business The transfer of a business involves tax obligations for both the transferor and the transferee. • For the transferor: he will have to tax the pre-tax profits to income tax or corporate tax, depending on the company, within 45 days. He must pay the VAT following the transfer of his business within 30 to 60 days. In addition, the transferor must pay the territorial economic contribution if the transfer took place during an accounting period. • For the transferee: he must pay registration fees to the tax department within one month of the transfer. He must also make a VAT declaration and payment to the tax authorities within 15 days. And he must pay the taxes not paid by the transferor. For the key money If it is an indemnity, the key money is not taxable to the lessor. And for the tenant, it is not deductible. However, if the key money represents a rent supplement, it is declared as property income for the lessor. It is, therefore, subject to VAT. But there is a possibility to spread it over a period of 4 years. The key money is deductible from the result on the basis of a percentage fixed on the duration for the tenant Sound off in the comments section and tell us if you want to read more about goodwill.

You may want to have many things or do many things. However, it is impossible to achieve all these things (at once). That’s why it’s helpful to set financial goals. By doing so, you will get a better idea about the most essential goals. This can be short-term (1 year) as well as a medium-term (2-5 years) and long-term (5+ years).

Financial goals can help you set priorities. These goals will help you make financial decisions in your daily life and use this money for the things that are important to you. This way, you will spend more time on your goals.

1) Write it Down

First, document your goals and group them by time frame: short-term goals (to be achieved within 5 years), medium-term goals (5-15 years from now), and long-term goals (more than 15 years into the future).

For example, if you have two children who you want to support to go to college, you can enter the two details separately. And don’t forget to include any debts you have to pay, such as mortgages or loans, in your list of financial priorities.

2) Prioritize Your Goals

Number your goals and prioritize them. This will depend partly on your personal priorities, but you also need to consider what makes sense from an economic perspective and what will provide the highest return on investment.

The following hierarchy makes sense in various situations:

  • Debt repayment and emergency funds
  • Retirement funds
  • Savings for college
  • Other short- and medium-term goals (as long as they are reasonable)

3) Act now

Ideally, you should act every day with momentum to get one step closer to achieving your goal. For example, if you want to get a new Rolls Royce, you can take a step forward by ordering a brochure or requesting a test drive. Keep trying to get closer to it because it is said that appetite comes with eating.

4) Don’t Make Your Goals Too Big and Don’t Lose Focus

You’re motivated, know what you want to save for, and are enthusiastic, so you often overestimate yourself. With your intentions formulated, you don’t think enough about how you will achieve them. You’re more likely to leave this for later. However, if your goal is too ambitious and too big, you will soon abandon it because it is unattainable and unrealistic.

Our advice is to keep your goals small. No one has ever completed a marathon in one go without training. So, what can you do today to reach your biggest long-term goals? Start by small steps until you finally achieve it.

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5) Secure a Healthy Savings Account

Self-actualization is the highest form of self-fulfillment, and you can’t get anywhere without determining your current financial situation. It is the central starting point for your journey to achieving your financial goals.

Savings alone will not get anyone very far, but savings can do wonders if invested wisely.

6) Consult a Financial Advisor

Investing doesn’t come naturally to you, so it’s wise to consult a financial advisor. Talk to them about your financial and savings goals, and ask them to advise you on the best investment to help you achieve your goals.

7) Monitor Your Progress and Results

Your goals and action plans should not be written down and then put in a drawer or buried in a pile of papers. They need to be reviewed regularly to avoid getting caught up in old habits and the myriad emergencies in life. Review how things are going at the end of the day, the end of the week, and the end of the month.

How did you achiever your financial goals? Share your tips with us in the comments below!

1 thought on “How To Set and Achieve Your Financial Goals?”

  1. Pingback: Goodwill And Key Money: Two Different Concepts - Moneyadviceblog

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