All that’s Crypto, Ain't Gold | Cryptocurrencies

 As members of the human race, we're always looking for signs, particularly from markets. Are equities likely to rise or fall? What’s going to happen with interest rates? What about the value of the Euro? 

When it comes to cryptocurrencies, the same questions nag at us: Bitcoin, for example, just hit an all-time high. So, what does this mean, if anything? Seeing as there are more than 800 cryptocurrencies out there, we need some guidance.

One view is that Bitcoin prices reflect general anxiety and uncertainty over the U.S. and global economic situations. While corporate earnings and stock prices remain strong, are Bitcoin investors seeing something the rest of us aren't?

There are plenty of reasons to thread carefully on cryptocurrencies, as there are numerous concerns on how the currency trades. According to a recent piece by Bloomberg:

“Even as investors are lured by their price gains and volatility, the biggest institutions are reluctant to get in, raising further concerns about liquidity.

On June 21, Ether crashed to 10 cents from $317.81 in trading on Coinbase. The cause was a single $12.5 million trade—one of the biggest ever—that triggered further selling. It all happened in just 45 milliseconds, after which computer algorithms started buying, driving prices back up to $300 within 10 seconds. Some digital coin exchanges have collapsed or customer funds have disappeared. All of which is scaring away the very investors the exchanges need to succeed.”

Here are five questions to ask when investing in cryptocurrencies:

- What is the price based on? Do you understand the code behind pricing the currency? Few do. That's always been a stumbling block for me. I think the investing public needs much more background on how the currencies are valued and the blockchain technology behind them.

- What benchmarks can it be compared to? With stock prices, we have lots of benchmarks such as the Dow 30 and S&P 500 Index going back decades. That shows us relative levels. Bitcoin only has a short history, so we have few tools to show comparative values.

- Why do you want to invest in Bitcoin? While I can see the innovative logic in wanting to get away from traditional paper currencies, keep in mind that while actively traded, there's almost no regulation of cryptocurrencies. That may change soon, but even then, no one knows what effect this regulation will have on the asset class.

Cryptocurrencies could be manipulated in many ways. And they may or may not be a good way to save for your rainy day. Since regulation is forthcoming, that's one of the reasons I would wait before I invest.

- Cryptocurrencies may not be a hedge. As this is a relatively new asset class, and we have no benchmark, then how do we apply traditional investment theories? Traditionally, precious metals like gold have been a hedge against inflation and the decline of the dollar. When the cost of living goes up, so does the price of gold. But with inflation low and the dollar relatively strong, Bitcoin may not be an effective hedge. It may be more of an anxiety index.

- Do you know the downside of Bitcoin? Like any other traded entity, it goes up and down in price—a lot. A few years ago, it shed over 90% of its value. If you want stability, this most certainly not the kind of thing you want in your portfolio.

The bottom line is that if you want to invest in a cryptocurrency, don't load up on it. While it will take some time to understand how it performs over time, it's best to be cautious!

Role Of Financial Accounting In Decision Making Process

 

While it might sound exhausting or obscure, Financial Accounting or Bookkeeping playing a key role that permits organizations to monitor all their monetary exchanges. It is the cycle where organizations record and report the bits of financial information that go all through their business activities that permit both organization managers and outside investors and analysts to comprehend the organization's wellbeing and settle on informed choices.

Guidelines and Best Practices

 

There are a series of bookkeeping rules that organizations should stick to in their Financial Accounting. Most traded on open market organizations in the United States follow the proper accounting rules (GAAP), a typical arrangement of principles and best practices that bookkeepers follow when they do the math and complete monetary statements.

Organizations outside the U.S. for the most part adhere to other worldwide principles that change by area and nation. In any case, paying little mind to which set of guidelines is followed. there are three fundamental zones where Financial Accounting assists with dynamic:

 

1.      It gives investors a benchmark of examination for—and the correlation between—the financial health of securities-issuing enterprises.

 

2.      It assists creditors to assess with evaluating the dissolvability, liquidity, and financial soundness of organizations.

 

3.      Alongside its cousin, managerial accounting, it assists organizations with settling on choices about how to dispense scant assets.

 

Investing Decisions

 

Fundamental Analysis relies vigorously upon the Accounting data that is recorded on an organization's fiscal reports, including the balance sheets , income statements, and cash flow statements. Every one of the budget summaries for traded on open market organizations are made and answered by the monetary accounting norms set out by the Financial Accounting Standard Board (FASB) and submitted to the Securities and Exchange Commission.

 

Investors and investigators utilize the data from financial statements to settle on choices about the valuation and reliability of an organization, permitting them to set value targets and decide whether a stock's cost is genuinely esteemed or not. Without the data gave by financial accounting, investors would have less understanding about the chronicled, current, and forthcoming monetary strength of stock and bond backers. The prerequisites set out by the FASB make consistency in the circumstance and style of monetary records, which implies speculators are less inclined to be liable to bookkeeping data that has been separated dependent on an association's current condition.

 

 

 

 

Loaning Decisions

 

Financial Accounting by Accountants in Ireland is likewise a key for loan bosses, from banks to bondholders. Since financial statements outline each one of its resources just as the short-and long haul obligation, banks improve the feeling of an organization's creditworthiness. 

 

Various normal accounting ratios lenders depend on, for example, the debt-to-equity ratio (D/E) and times interest earned ratio are gotten totally from an organization's budget reports. In any event, for exclusive organizations that don't follow the necessities of the FASB, no loaning foundation expects the risk of enormous business credit without basic data gave by monetary bookkeeping procedures.

 

At last, a loan specialist truly needs to realize exactly how much danger is included when lending company money, which can be dictated by auditing the organization's financial accounting. When this degree of danger is resolved, the bank will likewise have the option to plot precisely the amount to loan and at what interest rates through the cycle of Underwriting the loan.

 

Corporate Governance

 

Reliable Accounting like Accountancy services in Ireland serves a reasonable capacity for outside investors and moneylenders as well as for the inside functions of the organizations themselves. 

 

The most evident advantage for organizations to allude to their financial accounting is to meet the lawful and administrative commitments delineated for (public) firms. Organizations should be straightforward and straightforward about their monetary exercises and the data reported should be precise and routinely refreshed.

Beyond the administrative and consistence obstacles financial accounting also assists organizations with streamlining their everyday tasks and distinguish the sorts of undertakings that could give development openings later on. financial accounting assists managers with making spending plans, comprehend public insight, track proficiency, investigate product performance, and grow short-and long term techniques, among a few different choices helped by accounting figures.

 

The Bottom Line

 

financial accounting is a route for organizations to monitor their activities, yet in addition to giving a depiction of their monetary wellbeing. By giving information through an assortment of explanations including the financial statements and balance sheets, an organization can give investors and moneylenders more influence in their dynamic.

 

KEY TAKEAWAYS

 

Financial Accounting includes recording, summing up, and reporting the surge of exchanges and financial action coming about because of business tasks throughout some period.

Administered by a standard arrangement of practices, Financial Accounting's final result is a bunch of true organization budget reports including the balance sheet and income statement.

 

These budget reports are then utilized by organization directors, Contractors, financial specialists, analysts, banks, and different partners to settle on educated choices.

 

How to do your own End of Year Review as a Contractor

 

How to do your own End of Year Review as a Contractor

As an employee an inevitable part of the working year is the end of year review. The purpose of a year-end review is for you to reflect on your achievements, learnings and take some time to recognise what went right and wrong as you plan & set goals for the coming year.

As a self-employed contractor taking time to conduct a self-assessment is often overlooked, however we are here to tell you to pen in time now to grab a coffee & look back through your year as well as forward to where your career & personal path is headed in 2021.

Taking time to do a self-assessment means you will be entering 2021 in a ‘woke’, rather than autopilot headspace, with control of where you are steering your future based on where you have come from.  

Importantly it gives you the chance to see if the destination you are headed towards is out of kilter versus your long term goals, or maybe it’s perfectly on track!

Here is how to assess your year & start to plan for the next:

-  Thinking about the last 12 months what goals did you set out coming into 2020 and what were your 3-5 biggest achievements in that period. Reflect on these and try to understand how you can bring the learnings and skills from these achievements into 2021. Maybe you took on a new project in your role, maybe you mentored a new staff member or changed industry – what do your biggest achievements tell you about what success means to you and how can you build that into your 2021 goals?

-  How is your contracting role fitting in with your personal goals – maybe that is work life balance, income, job satisfaction, time management etc. What has this year contracting taught you about how it fits into your values & personal goals? Is there anything that needs to change in 2021 or that you would like to build into your goals for the year based on the wider ecosystem of your contracting role and your life?

-  Identify one time when your working contribution contributed to success for a company or project you have worked on. We can often forget significant contributions we have made to company success (as we rush onto the next task) that are highly valuable in negotiating contract renewals or adding to our CV for future role applications. Note your successes when they happen with some top line details and then at the end of the year pick your most notable & impressive ones!

-  Think of some challenges you faced this year (2020 certainly gave us a few of them!) and how you overcame them – this shows both your personal & professional self your ability to bounce back without the all too often modesty we afford to overcoming struggles. It demonstrates your resilience and determination even in difficult times. So often we plough through the year and forget the mountains we have overcome that can give us confidence the next time we face a hurdle and recount how we handled the last! Step back, reflect and pat yourself on the back!

-  Think about any skills/ topics/opportunities that came up this year within your contracting role in the last 12 months that you didn’t feel 100% confident in to pursue. What would like to improve and build on in the coming year?

-  Thinking about the future plan & what will help you to get there – is there a course that might help you, a mentor you could chat with, research you need to do- what is your first stepping stone to your 2021 goals? This one takes time to think through …is there something you want to work towards- a promotion, a company, a move to a new country or a totally new start in a new role – what is the first thing you can do to get started – now is the time to plan & set your 2021 vision!

We spend so much time ‘busy’ in the day to day that taking the time to review can seem impossible to fit in but, in reality it’s crucial, and it’s massively valuable especially when self-employed to stay on track and focused.

Taking the time to assess your journey so far means you have time to check you are on the right road, maybe even on the right map as you steer into your future and a brand new year!

As an independently employed contractor setting aside some effort to direct a self-evaluation is frequently ignored, anyway we at icon accounting, our Accountants in Ireland are here to advise you for Accountancy Services for Contractors to pen in time presently to get an espresso and think back during your time just as forward to where your vocation and individual way is going in 2021. https://www.iconaccounting.ie/blog/how-to-do-your-own-end-of-year-review-as-a-contractor

8 Ways to Set Yourself up for Success as an Independent Professional

The world may be a very different place to where we began in 2020, however, there are some things that remain the same, regardless of any external forces.

Unfortunately for many, Covid-19 has forced us to revaluate plans, find new employment opportunities and align themselves to what is being called ‘the new normal’.

One consistent factor of any economic downturn is the success of start-ups that rise like a phoenix from the ashes.

WhatsApp, Groupon, Slack, and Uber all share a similar story, they were formed during financial downturns, where funding was near impossible and optimism levels were deflated. Even more impressive than that, their founders all shared the common belief that it was possible for a recession to serve as a launchpad for global success.

The below outlines 8 steps to overcome before making the leap into self-sufficiency.

Talk to your Significant Other/Family

A career change can have a major impact on your partner, if you are the main breadwinner, you are putting the family’s income at risk.

If you are not the sole breadwinner, do not underestimate how your transition will impact you and your partner whether it be through finances or upsetting the smaller things such as a routine of household jobs.

Communicating your desires and goals will help to analyse the pros and cons of the transition, but without support from your partner or family, it will be a stressful decision and transition.

Identify your future Client

If you aim for everything, you hit nothing. The same principle applies when you are starting as an independent professional.

You should be able to answer the below questions about the people you will solve problems for:

- What industry are they in?

- What is their income level?

- Why do they want these problems solved?

- How will you make their lives better?

- Who so they currently look to for help on these problems?

Expertise SELLS but Confidence TELLS

Confidence signals expertise and expertise is what you will be selling when you quit your job to take on your own clients.

Confidence is not always easy to build and maintain in the wild, probably has something to do with the fact that your livelihood is dependent on getting prospects to say yes.

Don’t’ wait until you quit to start feeling and acting like an expert, use your job to start feeling like an expert using some of the tactics below:

- Speak up in team meetings

- Hold meetings and teach others

- Pitch internal improvements that your department could do better

- Email your department to recommend blogs/articles/podcasts and books

Do Favours

When you leave, you want to leave in such a way that your old employers still respect and value you. If you are going to do the same work, just as an independent professional, you really want your old employer to think well of you, they could become a source of referrals for ever and beyond.

Here is where to start:

- Take responsibilities away from your boss, if your expertise or skills can cover a problem hanging over them.

- Make your co-workers look good – they could be clients one day!

- Pitch new ideas to executive decision makers.

- Do a favour for third party organisations, this will help to build up the network of contacts that you will require to succeed.

- Sometimes a favour can be double edged, it may be doing someone else a favour, but it is also something you can use as an example in a portfolio of previous work

Winner Mentality

The last thing you want to do is start a new venture with ‘zero wins’ under your belt. In order to close a prospect, you need to be able to demonstrate that you can solve the problems the prospect is struggling to solve.

Here is how you can build your pitch:

- Make a list of projects that you know performed well

- Make a list of projects where you exceeded expectations

- Collate the final results of these projects

- Sort them into a Portfolio of Wins

Take on more projects and repeat

Start on the Side

Even with an impressive portfolio, a range of contacts and impressive skills, it will take some time to get to a point where you are making serious money or have fully replaced the old salary.

The amount of time you must get over the hill is dependent on your other sources of income.

Keeping your job until you have built up the side business that is an adequate source of income not only takes away the pressure of ‘must succeed, cannot fail’ and instead gives you a chance to grow your confidence whilst having a guaranteed income to fall back on.

Here is how to get your second source of income off the ground:

- Make a simple and basic website – Fiverr, Wix and many other platforms available to outsource or learn as you build

- Talk about your expertise on social media – share articles, answer questions and always remain active on LinkedIn

- Ask your friends for questions, then blog the answers

- Make a list of prospects and pitch them until they buy from you

Observe the Market

Find out what kind of jobs go to the independent professionals in your industry. The more you understand what roles may come up, the more you can position yourself correctly in terms of expertise and also price.

Research competitors and ask colleagues who their favourite suppliers are, patterns will emerge leaving a clear and concise path destined for success.

Plan your First 3 Months

Jumping ship without a solid plan is a race to the bottom and more frustrating than anything else, you are letting yourself down.

You may succeed without a plan, but you will be one of the very few that successfully gamble on the mercy of luck and fortune. In this scenario, you will be forced to go wherever the wind takes you and that may not be a very exciting destination.

You do not have to write an overly formal business plan, but you should at the very minimum complete the below checklist:

- Speak to a preferred provider regarding set-up, compliance and responsibilities as an independent professional. They may even be able to provide some calculations or even break-even points.

- Have work lined up, real billable work.

- Have a plan to get more work – a list of 50+ prospects and an engagement plan.

- A schedule

- Time management will become more important than ever before, make a schedule and stick to it.

Starting something new can be both daunting and exciting and 90% of the time, the emotion felt matches the preparation invested.

Nobody thinks they are going to fail when they first start but by strategically planning ahead of time, you can set yourself up for success when you make the leap.

If you are considering a career change whether it be through the spectrum of an independent professional or a start-up SME, reach out to us. We are always happy to help – info@iconaccounting.ie

Breaking into a Bank doesn't require a Drill or Sledgehammer Anymore

 “A Ukrainian computer “genius” masterminded a plot to steal more than €1 billion by hacking into banks and ordering cash machines to spew out notes.  Named only as Denis K, the man who was arrested on March 6th, is said to have devised malware used by a gang to attack financial institutions in more than 40 countries”

The Covid-19 era has given criminals ample opportunity to ply their trade, here are a sample of some common scams.

The criminals behind these bogus schemes view everyone as potentially easy prey and everyone should be on guard.

- Phishing

Potential fake emails or websites looking to steal personal information. Criminal Investigation has seen a tremendous increase in phishing schemes utilising emails, letters, texts, and links. These phishing schemes are using keywords such as “coronavirus,” “COVID-19” and “Stimulus” in various ways.

These schemes are blasted to large numbers of people to get personal identifying information or financial account information, including account numbers and passwords. Most of these new schemes are actively playing on the fear and unknown of the virus and the stimulus payments.

Do not click on links claiming to be from the Revenue and be very wary of emails and websites as they may be nothing more than scams to steal personal information. As a reminder, the IRS will never initiate contact with taxpayers via email about a tax bill, refund or Economic Impact Payments.

- Fake Charities

Criminals frequently exploit natural disasters and other situations such as the current COVID-19 pandemic by setting up fake charities to steal from well-intentioned people trying to help in times of need. Fake charity scams generally rise during disaster times like these.

Fraudulent schemes normally start with unsolicited contact by telephone, text, social media, e-mail, or in-person using a variety of tactics. Bogus websites use names similar to legitimate charities to trick people to send money or provide personal financial information.

Be particularly wary of charities with names like nationally known organizations.

- Threatening Impersonator Phone Calls

Revenue Official impersonation scams come in many forms such as receiving threatening phone calls from a criminal claiming to be with Revenue where the scammer attempts to instil fear and urgency in the potential victim. These types of phone scams or “vishing” (voice phishing) pose a major threat. Scam phone calls, including those threatening arrest if the victim doesn't pay a bogus tax bill.

The fact is, Revenue will never threaten a taxpayer or surprise him or her with a demand for immediate payment. Nor will it threaten, ask for financial information over the phone, or call about an unexpected refund or Economic Impact Payment. Taxpayers should contact the real Revenue or consult a tax and accounting professional if they are worried there is a tax problem.

- Social Media Scams

Social media enables anyone to share information with anyone else on the Internet. Scammers use that information as ammunition for a wide variety of scams. As such, taxpayers need to protect themselves against social media scams, which frequently use events like COVID-19 to try tricking people. These methods of trickery include emails where scammers impersonate someone's family, friends, or co-workers.

Social media scams have also led to tax-related identity theft. The basic element of social media scams is convincing a potential victim that he or she is dealing with a person close to them that they trust via email, text or social media messaging.

Using personal information, a scammer may email a potential victim and include a link to something of interest to the recipient which contains malware intended to commit more crimes. Scammers also infiltrate their victim's emails and cell phones to go after their friends and family with fake emails that appear to be real and text messages soliciting, for example, small donations to fake charities that are appealing to the victims.

- Senior Citizen Fraud

Seniors are more likely to be targeted and victimized by scammers than other segments of society and fraud. Financial abuse of seniors is a problem among personal and professional relationships but seems to be less of a problem when the service provider knows that a trusted friend or family member is keeping an eye out and taking an interest in the senior's affairs.

- Invoice Redirect Fraud

A finance team employee received an email from one of their creditors notifying them of a new account number for payment.

Invoice redirection fraud occurs when a business receives a fraudulent email claiming to be from an existing supplier, advising of new bank details for payment. They might not necessarily request a specific payment at the time of the notification, but the next legitimate payment will be made to the fraudsters account.

Fraudsters will even go as far as to changing the telephone number of the invoice, so to verify any change, please speak with a known team member of the supplier.

- Ransomware

Ransomware is malware targeting human and technical weaknesses to infect a potential victim's computer, network, or server and is a rapidly growing cybercrime. It doesn't just affect individuals either. Recently, Garmin was the victim of a ransomware attack and asked to pay $10 million in “ransom” to restore its systems.

Malware is a form of invasive software that is often frequently inadvertently downloaded by the user. Once downloaded, it tracks keystrokes and other computer activity. Once infected, ransomware looks for and locks critical or sensitive data with its encryption. In some cases, entire computer networks can be adversely impacted.

Victims generally aren't aware of the attack until they try to access their data, or they receive a ransom request in the form of a pop-up window. These criminals don't want to be traced so they frequently use anonymous messaging platforms and demand payment in virtual currency such as Bitcoin.

Cybercriminals might use a phishing email to trick a potential victim into opening a link or attachment containing the ransomware. These may include email solicitations to support a fake COVID-19 charity. Cybercriminals also look for system vulnerabilities where human error is not needed to deliver their malware.

Take Action

Speed is the Key element in dealing with any scam, if you think you have been a victim of fraud, contact your bank, IT provider and then the Garda National Cyber Crime Bureau (GNCCB).

 

https://www.wired.co.uk/article/carbanak-gang-malware-arrest-cybercrime-bank-robbery-statistics

Accountancy services in Dublin - With over a decade of experience, we work hand in hand with Recruitment Agencies throughout Ireland and the UK to provide a seamless experience for Limited Company Contractors. Our mission is to provide the best Accountancy services in dublin, Ireland & most efficient contractor support through a professional and friendly service.

Lockdown Upskilling - Tax Relief on Training Courses

 Take advantage of tax relief for training course as a day-to-day business expense. 

Allowable Training Courses

Tax relief claimed on training courses which are required for a specific contract. 

All training courses must be carried out within the timeframe of the contract and demonstrated as a direct requirement for the contract.

Should you wish to undertake a training course and can show that it is relevant for your contract you will be able to claim tax relief at up to 52% through your limited company.

Supporting Information Required:  

Receipts must be made out in name of the Limited Company & completed the pre-approval form submitted.

In the event of a Revenue enquiry you must be able to show how the course was a relevant business expense for your limited company. 

Non-Allowable Training

Long term educational courses including Diploma/ Degree/Masters.

Courses which exceed the duration of an assigned contract.

Personal Educational or Training courses that are related to your line of work.

Other Courses 

Certain education courses may be claimed through your personal tax return as a tax credit at 20%

Should you requrie more information please don't hesitate to get in touch by email at info@iconaccounting.ie or call 01 8077106.

Accountancy services in Ireland - With over a decade of experience, we work hand in hand with Recruitment Agencies throughout Ireland and the UK to provide a seamless experience for Limited Company Contractors. Our mission is to provide the best Accountancy services in dublin, Ireland & most efficient contractor support through a professional and friendly service. 

Why Contractors Earn More - Icon Accounting

For over a decade, independent professionals have played a hugely important role in driving economic performance. 

Highly skilled independent professionals earn more than twice the earnings of equivalent employees according to Andrew Burke, Dean of Trinity Business School.

In the comprehensive study completed by Andrew Burke, he examines the role of an independent professional and the growth of the project-based economy.

Below, I examine why contractors earn more than the traditional PAYE worker.

Higher Rate of Pay

As an independent professional, you are typically only paid for the days and hours that you physically work, your daily rate of pay is reflected as a result of this to account for holidays and bank holidays.

It is worth noting that contractors are paid in lieu of the value they bring to an organisation, they are not overpaid. Independent professionals require very little overheads if any, often require no training and always hit the ground running.

Contractor’s bet on themselves, and there is a certain element of risk to navigate through.

We always advise that if you are contemplating making a switch in your career to contracting, calculate your target rate of pay as an independent professional first - include a premium of 20% on top of your current salary, in line with the industry standard.

You can use our Online Calculator to calculate your recommended rate of pay, or get in touch directly – we’ll be happy to do the calculations on your behalf, we’ll even provide sample payslips.

Tax Efficiency

You are not limited to paying Class S PRSI contributions if you decide to go contracting, however, those that do set-up under a Director Umbrella solution or a PLC, benefit from a reduced PRSI contribution of 4%. This is a substantial saving when compared to the PAYE solution which includes contributions to Class A PRSI (11.05%).

There are numerous other avenues that you should be taking advantage of if you are contracting long term, including but not limited to, making contributions to an executive pension.

As a Director of an Umbrella company or your own PLC, you can claim full tax relief on these pension contributions, making it an extremely efficient way of retaining more of that higher rate of pay!

Expenses

Contractors have the ability to claim business expenses. There is tax relief applied to these allowable expenses which gives the independent professional another opportunity to maximise their income.

The most common expenses include general equipment that may be required for your role, relocation expenses, training and up-skilling costs and mobile and internet costs. You can check our YouTube channel for more details around claiming expenses.

If you are a client of Icon Accounting, your dedicated Account Manager will proactively ensure that you are expensing any business costs that are allowable.

The Role of a Contractor

The rise of the independent professionals in Ireland has been evident since the last economic downturn in 2008. The primary reason for the rise in popularity is the mitigation of risk for the hiring company while accessing a specific skill set that is required. Contractors are experts in their field, constantly evolving and learning new skills but as mentioned previously, require little if any training or management and are focused on completed a project from the day they first engage.

According to Andrew Burke, contractors play a pivotal role in economic growth and create more employment opportunities within an organisation.

As a result of the uncertainty looming in the global economy, more and more businesses from more industries than ever before are now examining the advantages and options of hiring independent professionals, which means demand for independent professionals is set to surge.

When times get tough economically, contractors excel, picking up new skills and knowledge along the way as organisations adjust and adapt to their environment.

Shoudl you have any questions on what it takes to start contracting, consider reading our blog piece for First Time Contractors or get in touch directly – info@iconaccounting.ie or 01-8077106. 

Icon accounting is one of the top Accountancy firms in Ireland & Accountants in Ireland visit now!

Is your Greatest Asset Protected?

Imagine if your daily rate was only €49.28 per day. If there’s one thing to make us all admit that anything really can happen, it’s the events of the past 2 months.

So, what if the most dreaded ‘What if’ happened to you? That you were simply unable to provide for yourself and your family simply because you are too sick or incapable of being able to work? It’s time to think of your income as an asset. We’re in the habit of insuring most of our assets – house, car, jewellery. Even our phones! Yet we neglect what amounts to our greatest asset, our income.

We don’t usually think of our current income and our future earnings as an asset. However, if you take a moment to think about it, the money you earn pays for almost everything you have… mortgage, car loan, bills, children’s education, insurance and so on. Without it, you are faced with a pretty worrying picture. Nobody wants to think about what life would be like should disability or illness strike.

This issue is even more stark for Independent Professional Contractors. It’s a zero sum game that you are either at work and being paid or unable to work and relying on savings to make up the shortfall. But what happens when the savings run out? What if it is a long-term illness/disability?

It’s probably why 41% of Independent Contractors recently polled by Aviva confirmed that they already had such a plan in place.

Imagine a scenario where you are leaving the Dr’s office after having been given an awful diagnosis. Your 1st thought will obviously be for your health. But very quickly survival mode kicks in and you will begin to imagine the financial consequences and how you will manage to attempt to get better with no income coming in.

This is where an Income Protection plan is so important and is appropriate to anyone earning a salary, whether self-employed or employed, PAYE or sole trader, regardless of their age or stage of life.

With Income Protection you pay a monthly premium that is based on your occupation and the state of your health. It’s also that important that note that the Government are prepared to help you with the cost as all premiums are Tax deductible which means you effectively means only have to pay 60% of the cost of the premium which is a huge bonus.

This ensures that in the event of an accident or illness, which leaves you unable to work, the policy will pay you a regular income. As there are no restrictions on the type of injury, illness or disability that an income protection plan policy covers, you get complete peace of mind. Best of all, you get to choose and tailor an income protection plan that suits your individual circumstances, with a range of cover types. What’s more, as your needs and circumstances change, you can adapt your income protection policy to suit changes in your life.

In general, we tend to be overly optimistic about how we would manage if we were unable to work due to illness or injury. We over-estimate the support provided by the State and underestimate our expenses and likelihood of having to claim.

It’s important to note that if you are an Umbrella Director or Director of your own Ltd company, you will not qualify for the State Illness benefit but may be eligible for the Invalidity Pension of €10,843 per year.

That’s €49.28 per day. How does this compare to your current daily rate?!

The reality for most people is that their level of “outgoings” either matches or exceeds their income. So, for a person who no longer is earning that income there will be a significantly negative impact on their lifestyle not to mention the added cost of coping with a medical condition.

Its why Income Protection is often described as the most important deduction on your payslip.

Speak to us today about Income Protection – it should form a core part of any financial plan. 

We are the best Accountancy firms in Ireland and avail of our one-stop-shop accountancy and compliance services for contractors. For more details visit www.iconaccounting.ie

icon@rockwellfinancial.ie

Should I set up a Drizzle Day Fund?

We are in unusual times, especially as we can’t really spend very much. Businesses are losing millions daily as we eat, drink and stay at home wearing our old clothes!

While some are fortunate to retain a steady income, perhaps it’s an opportunity to assess our spending and debts.  As a client recently put it to me, “the coronavirus has opened my eyes to the €100 or more a week I was spending on Chicken Fillet rolls and Coffee”!!

So, let’s have a quick look at what we can review now that were on lockdown.

- Build your own drizzle-day fund

Double down on saving if you are in a position to. It’s likely this situation will never happen again in our lifetimes and we may need a pot to work off in 6 months’ time.

- Review our debts.

Make sure that the debt is actually what you owe and that the amount is correct. If you dispute a debt, first contact the bank directly to resolve your questions.

Perhaps now it the time to clear that old credit card bill!

- Plan. Plan. Plan.

Create a spending plan that allows you to reduce your debts. Itemise your necessary expenses (such as housing and healthcare) and optional expenses.  Stick to the plan.

- Pay down and consolidate your debts

Withdrawing savings from low-interest accounts to settle high-rate loans or credit card debt usually makes sense.

- Loan Repayment Holiday

Seek a repayment holidays on Loans, Banks and Lending institutions are in a position to offer 3-month repayment breaks at the moment, and it could be a useful way of keeping cash in reserve.

- Tax Refund

Are you due a tax refund for 2019? Get your 2019 tax return competed early and get your refund to your bank.

Author -

John Bell

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