The Charge as a Consultant

If you owned a retail store, a restaurant, or sold products online, figuring out pricing would be relatively straightforward: take the price you pay for the product, add in all of your indirect overhead costs, and add in your profit margin. If you expect to make a 50 percent gross margin, and your total product cost is $20, the retail price would be $30. Simple, right?

But if you’re selling a service, it’s different. You aren’t buying a product and reselling it. You’re not paying a set amount for something, so it’s not nearly as easy to measure your costs. Your “cost” is the value of your time and knowledge and/or your staff’s time and knowledge. That’s all well and good, but placing a value on time and knowledge is pretty subjective.

The Numbers

Despite the subjective nature of service pricing, we still have to look at our numbers. No matter how small your business is, you have overhead costs. Service industry business owners might not be so vigilant controlling costs when its’ only small amounts of money. But the costs of doing business can be quite significant when you add them all up.

Paying $20 per month to use an email marketing service is a relatively inconsequential amount of money, for instance, but what about all those Chamber of Commerce and other small business association memberships? You’ll have ongoing expenses, too, for your phone service, Internet access, and office supplies. You might have to take clients out to dinner, upgrade your software, or have a computer repaired or replaced. And what about the money you pay an employee or virtual assistant to answer your phones, send out invoices, and do other chores? These and other costs of running and managing your business all need to be accounted for, even though they can’t be allocated to any one job.

The bottom line is that you’re not as different from product oriented business owners as you might think. You, too, need to keep track of and control costs.

First, Set Goals

How much do you want to make annually and how many formal hours do you want to work to reach that goal? This is more of an “in a perfect world” type of goal but it will at least get you started. If you want to make $75,000 this year and you want to work 40 hours, and don’t plan to take any time off for vacation or holidays, you only have to charge about $36 an hour to reach that goal.

Does that seem a little low? If you have specialized knowledge, and charge $90 per hour and worked 40 hours per week, that’s almost $184,000 annually. Much better.

SEE ALSO: How to Land Your First Consulting Client

Second, Look at Industry and Regional Trends

Every professional organization keeps detailed data on industry trends. You can find information on plenty of blogs but if you’re in a professional business, you should belong to your industry’s professional organization. Ask them for these figures.

If the market and your geographic location (if you work locally) will support $90 per hour, you know that making a six-figure salary is within reason.

Third, Think About Non-Billable Hours

If you’re charging by the hour, time is money. Non-billable hours include anything you do with your 40 hours a week that can’t be billed to your client, and therefore produce zero income. Some examples: paperwork, traveling, networking to market your business, talking to vendors or partners, etc. These non-billable activities can easily take up as much as 50 percent of your time. If that’s the case, your $184,000 salary just got slashed to $92,000 before you account for any out-of-pocket costs for running your business.

Who are Your Clients?

Let’s look at two types of service-oriented entrepreneurs. The first is somebody who owns a house cleaning business. He works with busy professionals that want somebody else to clean their home instead of committing precious time to doing it themselves. Most of his clients are people slightly above the average American income.

Second, a corporate IT Consultant that advises businesses on network security. Her clients are larger businesses that rely on her to keep its data safe.

Obviously, the first entrepreneur can’t charge as much because his clientele is more money conscious. If he tried to charge $150 per hour, he would have very few clients. The IT consultant’s clients are people who understand that losing data is far more costly than the money spent to protect it. She can charge a lot more. Consider your client base.

SEE ALSO: Six Strategies to Get Paid What You’re Worth

Your Experience

As you gain experience and notoriety, your prices will go up but understand that at the beginning, you probably won’t be paid what you’re worth. Most consultants will start at a lower cost than the average and slowly raise prices. Don’t get too greedy too soon but don’t undercut yourself either.

What is Your Main Business Goal?

If you’re charging by the hour, your consultancy service is likely your main source of income but if you’re using your consultancy business to sell other products, you might charge a lower rate on the service side to make sales on the product side.

Service oriented people know that diversifying their offerings allows for better price control. If you’re being paid to speak at events, write books, and you’re selling products related to your service, you know what seasoned service pros already know—charging by the hour is a hard way to make money and their hourly prices have to be higher.

Finally

Sometimes it comes down to knowing the market, knowing your competition, and falling in line with industry averages. Then, you organize your business around those rates. Each service field is different with some fields more price conscious than others. Know your industry, keep up with current trends, and you’ll reach your goals

Some Common Causes of Prevalent Tax Mistakes

Whether you’ve filed for an extension on your taxes this year, have waited until the last minute to complete paperwork, or want a better strategy for the future, chances are you could be doing a better job throughout the year to save on income taxes, says seasoned investment advisor Paul Taylor, a member of the National Ethics Bureau.

Forty-nine percent of Americans think they personally pay more than their fair share in taxes, according to 2013 Rasmussen reports.

“Come tax time, many of the other half could be doing more to legally and strategically save money,” says Taylor, an architect-turned-founder and owner of Capital Advisory Group & Tax Planners of Lake Norman and Capital Investment Advisors, Inc. (www.CapitalAdvGroup.com).

He cites mistakes that many taxpayers are liable to make now and in future years.

• Not knowing which tax deductions are available. Tax reform measures are enacted frequently by Congress, which makes it hard for U.S. taxpayers to know which deductions are currently available for maximizing savings. One of the most overlooked deductions is state and local sales taxes. Taxpayers may be able to take deductions for student-loan interest, out-of-pocket charitable contributions, moving expenses to take a first job, the child care tax credit, new points on home refinancing, health insurance premiums, home mortgage interest, tax-preparation services and contributions to a traditional IRA.

• Misunderstanding deduction value for medical expenses. The Affordable Care Act has altered the guidelines for tax-deductible medical expenses. Effective Jan. 1, 2013, the new policy increased the threshold for the itemized deduction for unreimbursed medical expenses from 7.5 percent of adjusted gross income to 10 percent of adjusted gross income for regular tax purposes. The increase is waived for individuals age 65 and older for tax years 2013 through 2016.

• Confusion when taxes must be paid on IRA and employer-sponsored retirement funds. Traditional IRAs and most employer-sponsored retirement plans are tax-deferred accounts, which mean they are typically funded with pre-tax or tax-deductible dollars. As a result, taxes are not payable until funds are withdrawn. Exceptions are the Roth IRA and the Roth 401(k) and Roth 403(b). Roth accounts are funded with after-tax dollars. That’s why qualified distributions – after age 59½ and the five-year holding requirement has been met – are free of federal income tax.

• Overlooking tax-advantaged investments. Tax-advantaged investments can include real estate partnerships, oil and gas partnerships and suitability, which refers to how appropriate an investment may or may not be to an investor. Two of the most common types of real estate partnerships, for example, are low-income housing and historic rehabilitation. The federal government grants tax credits to those who construct or rehabilitate low-income housing or who invest in the rehabilitation or preservation of historic structures.

• Uncertainty when accounting for gift taxes. The federal gift tax applies to gifts of property or money while the donor is living. The federal estate tax, on the other hand, applies to property conveyed to others, with the exception of a spouse, after a person’s death. There are several exceptions to gift taxes, including gifts of tuition or medical expenses that you pay directly to a medical or educational institution for someone else, gifts to a spouse who is a U.S. citizen, gifts to a qualified charitable organization and gifts to a political organization

Finance a Start Up Business

If you have been in the market recently seeking some type of financing for a new, start-up business, you are probably a little frustrated by now.

The thing is: Banks and most other non-bank or private lenders just do not lend money to start-up businesses. That is just the way it is.

They claim that the risk is just too high and their regulators or investors agree with them.
In fact, very few businesses last more than three to five years – the typical loan term for a standard business loan.

But, just like many businesses before you, there are ways to finance your new start-up:

First – always look to personal assets or personal means. Now, I know that you don’t want to hear this but if you don’t have any other choice and you truly believe in your business – then why not use your own assets or cash to get that business off the ground and making money?

You want a bank or lender to take a risk on you but you won’t take a risk on yourself – just does not seem fair.

Plus, I can guarantee you this: If you have your own assets at risk you will work harder and longer to make sure your business does succeed (which is the end goal anyways).

Second – other bootstrapping means. There are many ways to bootstrap your business besides using your own personal funds or assets. You might look into:

Crowd funding – while this might not provide a huge amount of money, it might provide enough to get started. Once started, other financing avenues will begin to open up.

Friends and family loans – your friends and family know you best and if you can’t sell your business concept and benefits to them then you will never be able to sell it to paying consumers. Even if your friends and family can’t or won’t invest in you, they may know of others who will – you just have to ask.

Micro credit lenders – backed by the SBA, these lenders provide more than just small amounts of capital – usually up to $35,000 with the average loan being around $13,500 – they also provide advice and guidance to help you better manage and grow your operation.

Third – Look to partners or investors. If your business concept is not in a huge market, has high and quick growth potential or has a lot of proprietary assets, then you will have to look locally. Get out and network in your community for other business owners or local investors.

You would be surprised at how many local or retired business owners just want to give back to their community and can provide more than just capital but can open up many other doors to you and your business. You just have to get out there and talk to everyone who will listen. And, don’t be afraid to ask. If you don’t ask, you will never get what you want!

While you might hear of others business owners landing some type of bank debt or professional investment to get their business started; also know that there had to be some outstanding circumstance or reason for it – like their uncle being the president of a national bank or as a favor to a well known family member or just simply that they have other sources of outside income that qualifies them for the loan.

The bottom line is that banks and other lenders just do not lend to start-up businesses.

In your early days, you really do have to go it alone. But, make it a challenge. Make it one of your goals to eventually qualify for that coveted business loan. This not only will help you financially manage your new business better (keeping items like cash flow, collateral, credit and debt ratios in mind) but, when you do get approved for your business loan, it will really let you know that your business has made it to that next level and on the right path to further success.

A true entrepreneur does not look at a failure to secure outside financing as a fatal obstacle to starting their new business but, in focusing on the long-term potential gains that business could provide, would easily utilizes these three steps and other self-funding means to get up and running as soon as possible.

As your business grows, more financing opportunities will open to both it and you – you just have to get started

The Pay Difference Between College Educated Men and Women

In the United States, the average working woman earns 79 percent of what the average working man earns. Think of it this way: Women receive $4 for every $5 that is remunerated to men.

A quartet of researchers from Harvard, Wellesley, Boston College and Norway’s Institute for Social Research explored Census Bureau data from 1995 to 2008 and found that the average male college graduate by his early forties earns roughly 55 percent more than the average female college graduate in the same age cohort.

 The researchers found that when men and women both keep working at the same company, men see higher salaries sooner. And when they change jobs, as men grow older they move on to higher paying positions and firms more often than women do.

They also identified that while married men and women switch jobs at about the same rate, married men’s career shifts tend to result in higher salary returns than married women’s job changes do. Additionally, jobs in women-dominated roles tend to start with lower pay than male-dominated ones, and that affects salary growth over time.

For high school graduates without college degrees, the researchers found that as age increases, the wage gap widens. However, the most significant discrepancy occurs during the first five years out of school, at which point the gap is 30 percent.

Though college educated men earn more than college educated women, more women are attending institutions of higher education. More women graduated from college than men for the first time in 2015 — 30.2 percent of women compared to 29.9 percent of men, according to Census data

Time for Funding

The hit ABC series, “Shark Tank” has given new attention to the world of business funding. Millionaire and billionaire investors listen to pitches from everybody from the soccer mom with an idea to the veteran business owner with years of experience and millions in sales.

“Shark Tank” sheds light on plenty of realities when it comes to entrepreneurship but one to focus on for this article is the fact that not every business is ready for investors.

How do you know if you’re ready?

Two Types of Funding

Before you go after funding, you have to understand the two types. Debt funding is what you might find at a bank. In exchange for money, you make regular payments complete with interest. The bank doesn’t want to own a piece of your company; it will ask you to put up collateral—your house, your car, your baseball card collection, anything the bank can do to lower its risk, it will.

If your business becomes the next Coca-Cola, the bank gets nothing more than its money back with interest. If your business ultimately closes its doors, the bank will tell you that its sorry to hear that things didn’t work out but it still wants its money back.

In short, debt funding isn’t dependent on how well your business is doing.

The second type is equity funding. If you receive equity funding, you’re receiving cash in exchange for giving the person some percentage of your company. They become your business partner and they’re probably going to want to be a part of the decision making process.

If your business thrives, they make money. If your business fails, they lose their investment alongside of you. Equity finance deals can come with any number of contingencies including royalty deals or debt funding built in but the main difference between the equity and debt funding is that equity funding makes the investor a partner where debt funding is nothing more than a loan.

When Should You Ask For Money?

You might think the answer is, “right now.” Most people who have an idea for a business don’t have a storehouse of cash ready to deploy to get the business off the ground. They need help before the business becomes the business.

The reality, however, is that most brand new businesses will not be eligible for any type of formal financing—debt or equity. Since you have no business, you have no income. Banks aren’t in the business of gambling so they’re likely going to say no. Equity investors are in the gambling business but even if they were ok taking a chance on an unproven business, they often want to see big numbers.

Spending their time on a startup that brings in $20,000 this year isn’t worth the risk.

Where do startups most often find funding? They ask friends, family, and other individuals that know them as somebody who is driven and has a track record of success in everything they do.

Government Financing

Through the United States Small Business Administration, some small business owners are eligible for SBA loans. The SBA partners with banks in your community to take on some of the risk of business loans. This allows small business owners who wouldn’t otherwise be eligible for a loan to get the funds they need. You can read more about SBA loans by going to its website.

If you’re beyond the startup phase, you’re likely eligible for multiple forms of equity financing. Start with the bank or credit union that holds your business accounts. You’ll need detailed financial statements and a rock-solid pitch that gives the banker an idea of what you’re doing, how the money will be used, and why you’re still going to be in business in five years.

Equity Finance Explained

Remember that equity financing comes from investors and although they’ll look at all of your financials, it often comes down to the investor’s gut feeling. Because of this, there are no set rules. Providing you can make a good pitch, it never hurts to ask but there are some realities to consider.

In most cases, you aren’t going to be attractive to equity investors until later in the growth of your business. Investors know that along with an investment of their money comes an investment of time and other resources. If the potential return isn’t high enough to justify the outlay on their part, they won’t invest.

Before asking for a meeting with every investor you can find, have an expert understanding of your business, your industry, your product, and your competition. If you’re not the smartest person in the room when it comes to your business, the answer will be no. That’s hard to do in the earliest stages of your growth.

Related: 9 Alternatives to a Traditional Business Loan

But How Do You Know The Right Time?

Here’s the answer: If you’re too early, you might blow your one chance in front of that investor or lender. If you’re too late, you’ll come off as desperate.

If you watch “Shark Tank”, you’ve noticed the entrepreneurs who show up desperate. They say things like, “If I don’t get an investment, I have to give up on my dream.” That desperation indicates that the entrepreneur is too late.

The better time to ask for funding is when your business is ready to go to the next level. It’s healthy but needs a financial shot in the arm to grow. When you start to feel those growing pains, it’s probably time to seek funding—not necessarily because you NEED the money but because the money propels you forward.

Trade Services With Other Businesses

There might come a time in your business’s life when you want to barter your services. In fact, you may find it prudent from time to time to trade your services for the services that another business offers. It helps to have a plan in place for this and to have some safeguards against overextending your services beyond what you can support. After all, if you barter all of your services all of the time, then you’ll never earn an income.

So the big question is: When is it okay to barter your services, and when should you pass on any trade offers?

When Bartering Doesn’t Makes Sense

Many businesses decide it’s time to barter when they don’t have the income or can’t afford the services they really want to purchase, or need to purchase, from another business. This is a really bad idea. Bartering should never be done solely on the basis of your budget or on an emergency ad hoc basis.

It makes better business sense to barter for essential business services rather than to barter for services that are luxuries or that are primarily personal expenses.

For instance, let’s say your pipes burst at your home and you find yourself in need of a plumber. It’s an emergency situation and if you don’t hire a plumber fast, you’ll be displaced and will have to move your family out of the house and into a temporary living situation. That certainly would be a bad thing. But should you barter your dog grooming services right now? Do you really want to trust your plumbing to the only person in town who’ll do the job if you shampoo their poodle?

When Bartering Actually Does Make Sense

Bartering services is best reserved for when you were going to make a purchase anyway. So instead of bartering your dog grooming services for an emergency plumber, you could establish an agreement with your shampoo supplier. You know you’re going to need shampoo to run your business. So offer to perform a pet pedicure in exchange for an equal value of shampoo each month.

Or, if you have a plumber whose business you value and your business location has an ongoing need for plumbing services, you could agree to trade your dog grooming services for plumbing services on an as-needed or an ongoing basis. Whatever works for you and your trade partner.

Before you enter into any bartering agreements, however, you must first set a value for the services you are trading. Trade only on the retail value of your services, not their costs.

What To Consider Before You Make A Trade

Other considerations you should weigh when determining whether or not to barter your services include:

  • How much should you barter? Don’t go overboard. Only barter what you feel comfortable with financially. A good rule of thumb to use is to establish a limit on the value of services you are willing to trade. Say, for instance, if the value of the service is more than $100, then the answer is an automatic “No.”
  • Set a limit on the total value of services you are willing to trade for a given period (e.g. No more than $1,000 between all trade partners per quarter). Alternatively, you could set a limit on the number of trade partners.
  • Is the service you will receive essential to running your business? If not, you should probably pass.
  • Can you trust a potential trade partner? You should only enter into trade agreements with business owners with whom you have done business in the past or have a reasonable expectation that they will fulfill their end of the bargain. You shouldn’t barter with people you just met.
  • Don’t enter subsequent agreements with trade partners until they have fulfilled past agreements.
  • As always, get your bartering agreement in writing and make sure all of the details are spelled out.
  • Check with your accountant to find out how to record and report bartering deals to stay in compliance with IRS laws.

Consider all trade agreements just as you would any other business agreement and make sure you annotate all exchanges. You and your employees will spend time performing services for your trade partners, so there are still expenses to be accounted for, and you want to make sure you get a return on that investment. If the services you receive in return do not result in a net positive for your business, then it likely isn’t a good trade arrangement.

As mentioned earlier, stay away from trade agreements that mix your personal finances with your business finances

Know More About Credit Card

A cashless economy, the rise of digital money yet an increasing demand for credit. All of this has led to the rise of the digital credit start-ups that let you buy now but pay later. With the promises of letting you have a hassle-free transaction and the ability to buy what you want, regardless of the fact that you might not have cash on you; these start-ups are targeting the consumer segment of India that does not have access to a credit card.

One of the biggest problems while getting a loan is the amount of paperwork involved in it and the number of times you have to visit the bank and even then, you might end up not securing the loan. Doing away with all the hassles, these start-ups base your credit worthiness through digital checkpoints. “It’s a longish process at the bank, which is why the credit card penetration is so low in the country. We have a propitiatory algorithm that assesses credit worthiness using alternate data. All of this is done in real time with minimum or no customer involvement. It’s a less pervasive model,” said Akshat Saxena, co-founder of ePayLater.

 Enabling Financial Inclusion

The startup ePayLater recently tied up with IRCTC giving users the option to buy a train ticket immediately without having to worry about whether they have enough balance in their account at the said moment to pay for it. “It’s a fairly innovative way of making payments. The user can just sign up once and then we access their credit worthiness in real time and let them buy the ticket. This actually enables financial inclusion.

Tapping the 100 million people segment

While there are a large number of people who are denied loans or don’t have access to credit cards, there’s another segment that almost always needs instant cash but has no access – college students. Targeting the age group of 18-26, Slicepay makes way for micro credit use cases. “There are over 100 million people between the age group of 18-26 who don’t have credit cards. These are mainly students who need small ticket loans and banks don’t have the cost structure to include the same. Taking the whole process digital, we offer them the ability to buy a smartphone or laptop with convenience. The average credit loan is 15,000,” said Rajan Bajaj, co-founder of Slicepay.

Are we headed towards a debt crisis?

Considering there are also people who could make use of this facility for the wrong reasons, will it lead to a debt crisis? “First, the credit taken by these people are for small numbers. Secondly, the analysis we do is pretty secure. We are prudent in a way that we are very cautious of lending. Let’s say we have 100 customers per month, we refuse 40 of them because of their low evaluation scores. We are also educating them about cibil scores. We have campus ambassadors who can also do physical verification The AI and ML-based process raises red flags if there is an error and the person is denied the loan automatically, leaving no room for faults,” said Bajaj. At Slicepay, they do 1500 loans per day.

Saxena from epaylater agrees to say, “A credit card is an unsecured product because there’s no collateral involved. A house loan or car loan is still secure because there’s an asset involved. However, ours can be the most secure product because of the algorithmic analysis we do for the credit assessment. Everyone is on social media now and the assessment done through the digital data is always accurate. The number of people we give loans to per month is definitely a double digit percentage.”

Some Investments in First Half of 2017

The year 2017 has already seen many fintech achievements that will go a long way in charting a history of their own in future. From PaytM, breaking records as one of the highly funded companies of Asia to it opening a payments bank, the fintech sector has seen a lot of money being pumped into it.

The Investment That Made the World Take Notice

 Of course we are talking about PaytM here. With an investment of $1.4billion from Japanese Conglomerate Softbank, the payments wallet and marketplace that recently turned into a payments bank, had fintech enthusiasts from all around the world sit up and pay attention to the Indian fintech sector. The company is setting a target of creating over 500 million users.

Another Digital Wallet Takes the Cake

Not too far behind is MobiKwik with its investment of $928 million. The digital wallet company raised the series C round of funding from its existing investors Cisco Investments India Ltd and the Bennett Coleman & Co Ltd. According to reports, MobiKwik will use the money from this funding round to innovate and develop new products and expand its team further to increase its user base.

InsurTech in the Race

The start-up that intends to change the insurance landscape of India has recently raised $30 million. Acko has raised the round from various investors, including Narayan Murthy’s Catamaran Ventures, SAIF Partners, Accel Partners and also Kris Gopalakrishnan.  Interestingly, Acko Founder Varun Dua was also one of the co-founders of Coverfox, an online insurance distribution platform. Many of the investors of Coverfox have placed their bets on him again.

Banks on the Lookout

The alternative banking channel Fino PayTech Ltd raised $22 million from ICICI Prudential and ICICI Lombard by offering them a 12 per cent stake. The business and banking technology platform offers its customers financial services. Having been around for over 10 years now, they boast of over 28 million customers across 499 districts, covering almost all states. Fino PayTech is also looking at starting a payments bank.

Rising SME Loans

With demonetization, the alternative lending platforms got a great boost. Lending in the SME sector got an all-time high, and LendingKart which focuses on the same, saw its curve on the graph rise upwards.  LendingKart hit headlines recently as they received $7.8million as debt funding from YES Bank. The company will now use these funds to expand to Tier III cities

Some Money Habits That Separate Building Wealth From Just Making a Living

When it comes to getting rich, many of us assume it means getting an upscale job with a hefty paycheck. We daydream about how we’ll drive a cool car or treat ourselves to fancy dinners out. After all, the more money you earn, the wealthier you are, and then you can do whatever you want, right?

There are a handful of small but powerful things wealthy people do that set them apart from those who are struggling financially. Start cultivating these habits and you’ll get a sense of what real financial success and independence feel like, as well as what it’s like to make a difference.

 

1. Create multiple streams of income.

It’s difficult to become financially independent on one income. If you lose your job you’ll be frantically looking for work while dipping heavily into savings to stay afloat — or, worse yet, you’ll be going into debt to pay your bills.

Wealthy people focus on cultivating multiple streams of income so they’ll always have something to fall back on during lean times. During boom times, your income will balloon to pad your savings and fund your investments.

You can build passive income, such as from rental properties, stock dividends or interest from a high-yield bank account. A side hustle is a great way to boost your income while developing a passion or a hobby.

A side hustle could be a business you start on the side, freelancing in an area of expertise or marketing your skills. Can you teach yoga? Design websites? You can work a part-time job during off hours, or even rent out a room in your home.

The best kind of side hustle is something you enjoy doing, and it’s even better if you can create synergy between your different income threads, so they feed into your overarching goals and dreams. If you’re able to tap into an area you are passionate about, you’ll be determined to persist until you’re successful.

Related: 50 Jobs, Gigs and Side Hustles You Can Do From Home

2. Learn to live on less than you make.

Living beneath your means is the key to creating and maintaining wealth, not to mention avoiding debt. Millionaires know spending less than you earn creates opportunity; you can invest that money, save it or donate it to a cause or charity you care about. Ideally, you can do all three.

Jim Rohn, entrepreneur, author and motivational speaker, uses the 70/30 rule as a blueprint for how much to spend, save, invest and donate. For most people, the difficulty is learning to live on 70 percent of their income after taxes, including spending for all necessities and luxuries. The remaining 30 percent is then broken into 10 percent allocations for investments, savings and charity.

Living on less than you make requires you to get your spending under control and come up with a budget that you stick to. You’ll need to learn to be more frugal and to really make your money stretch. It may mean that you drive a used economy car, eat at home more often or ditch extravagant purchases.

It definitely means that you should stop comparing yourself to others. According to Rohn, “Poor people spend their money and save what’s left. Rich people save their money and spend what’s left.”

When you spend, think about whether this something you really need, or something you just really want.

3. Make your money work for you.

The wealthy invest in themselves. They know the key to making their money work for them consistently over the long haul is creating an investment plan to create wealth. The plan should include regular payments into a mutual fund, a trading account and retirement accounts.

Accruing wealth also requires making capital investments. This is the money you’ll invest in creating an enterprise, such as developing a business, manufacturing a product, marketing and selling your services or investing in other ventures.

This will require you to take calculated risks while taking into account your long-term financial security. Walking this line require financial savvy. Educate yourself on financial matters. Understand the ins and outs of your investment plan and make adjustments as needed.

In addition to your investment plan, you should be tucking away at least 10 percent of your paycheck into “rainy day” savings. It’s easiest if you have it automatically deducted from your paycheck. This money is for unexpected expenses and to get you through tough times.

Savings protect your investments. It will keep you from going into debt or needing to pull money from your investments, which in turn could cripple your multiple income sources.

Related: Lifestyles of the Rich and Frugal: 7 Thrifty Millionaires and Billionaires

4. Give back.

It may seem counterintuitive to give generously of your time and money, but this is also an important investment. Giving to others and being of service to those who need it most helps you connect with your community and be a part of something bigger than yourself: the greater good.

This is about growing wealth not just in your bank accounts, but in your whole community, which benefits everyone. When you volunteer your time or make donations to causes or issues that your care deeply about, it gives you a sense of joy and purpose.

The idea is to not just be a go-getter, but a go-giver — someone who is focused on others more than themselves. Yes, it’s important to stay focused on your goals and be passionate about your dreams. But finding a way to also add value to the lives of other people will benefit you in the long run as well.

Truly wealthy people, the ones who impact society and change our world views, understand that the more you give, the more those good feelings and vibes come back to you

Some Ways Banks are Making the Life of a Start up Easy

The age-old riddle, “who came first — chicken or the egg?”, seems to have been replaced by, “will fintech exist without banks?”. And just like the chicken and egg’s existence, most experts now believe that both need the other to exist.

Entrepreneur India takes a look at the services that banks are offering to start-ups without partnering or acquiring them, to help them scale.

 Branches Only for Start-ups

Giving start-ups a preference and realizing their ever-growing financial needs, banks have opened up branches that deal specifically with start-ups. Both Ratnakar Bank Ltd (RBL) and SBI have gone ahead to launch these branches. State Bank of India’s branch for start-ups is called SBI Incube and was launched in Bengaluru. Following suit, RBL too opened a branch in the start-up city, saying that the branch would take care of all banking facilities needed by entrepreneurs.

APIs to Solve Problems

An interesting aspect of banks that has opened up avenues for start-ups is API or Application Program Interface. Giving way to open banking, the declaration of APIs allows third-party developers to come up with smart solutions for a bank’s problems. This is even referred to as one of the most crucial aspects of financial technology. It will give access to start-ups to the real-time data of a bank, giving the former power to innovate and solve a real-time issue. This will also let the third-party know more about a consumer’s history of transactions.

Online Advisory Platforms

With a bank’s expertise, most of the mentors for fintech start-ups come from banks, making it obvious for a bank to open up advisory services for entrepreneurs. From smart tools to the right alliances for mentors in technology and banking, these platforms also offer digital and cash management facilities. While HDFC bank has launched SmartUp, Yes Bank has launched YES Headstart programme that offers entrepreneurs assistance in registering and even incubation services.

The Next VC: Funding Start-ups

While the investor network is growing at a rapid speed in India, banks too are joining the herd. And with a bank’s vested interests in the financial technology space, the institutions don’t just invest money into start-ups but also give them access to the bank’s customer base.

SBI has earmarked a Rs 200-crore fund for start-ups. SBI’s CEO Arundhati Bhattacharya has also been reported to say that the bank would offer financial and legal assistance to the start-ups under its hood.

Meanwhile Kotak Mahindra Bank’s Kotak Business Boosters helps entrepreneurs in gaining access to funds right from the seed stage to series B.

With the presence of many alternative lending platforms that cater to small and medium business or start-ups, banks too are making the financial world easier by doing away with the rigid structures one needs to go through to get a loan. From loans to run your everyday business to long term loans, most banks these days offer loans specifically for start-ups.

Hassle-free Account Opening

When you are a start-up, there are just too many documentations, financial and management issues to take care of. All of this, apart from the main vision of the start-up that they set out to do — solving a problem that exists in our day to day life. So, making it one step easier for start-ups, banks offer them an easy and hassle-free process to open accounts. ICICI Bank even has an option called Shubhaarambh current account aimed at entrepreneurs that lets them have zero balance for the first six months.

Payment Gateway Partners

With the boom of payment gateways or digital wallets or the increased involvement of the fintech aspect in each start-up, which requires a transaction, banks come in handy for most start-ups by offering payment gateway services. Even Axis Bank offers the service for a smooth cash flow under its business banking solutions scheme