4 Steps To Building Financial Equity - Part 2

4 Steps to Building Financial Equity - Part 2

This year the theme of International Women's Day is all about Innovation and technology for gender equality. To celebrate, I would be sharing on how to build financial equity.

This is the continuation(Part 2). If you missed the first part, click here to catch up.

Let’s do a quick recap.

Step 1, we talked about the need to Start Saving Early and the best time is Now.

Step 2, we discussed how to Build A Strong Credit Score. I also shared tips on how to improve your credit.

I hope you have started implementing some of these tips in your financial plan. 

Remember, It is good to take notes; but more important to take Action.

Step 3: Increase Your Earnings whether in a job or through a business. 

Don’t be afraid to negotiate for higher pay or better benefits when starting a new job or during a performance review. Over time, even small increases in pay can add up to significant financial gains.

Many people worry about getting pay rises because they think they would earn less after taxes especially if they are on the boundary of a tax band.

It’s important to remember your income is only taxed in bands.

If you have a job or sole trader …

Here are the tax bands from April 2023:

  • Personal Allowance: £12,570 (this is the amount of income you can earn before paying any tax)

  • Basic Rate: 20% on income between £12,571 and £50,270

  • Higher Rate: 40% on income between £50,271 and £125,140

  • Additional Rate: 45% on income above £125,140

It’s worth noting that these rates apply to your Taxable Income, which is your total income minus any allowable deductions, such as pension contributions or charitable donations (or allowable expenses if you are a sole trader).

If you have a registered business…

Unlike the tax bands for employees, the tax bands for UK limited companies are based on their Taxable Profits, NOT their income.

The corporation tax rates from April 2023 are:

  • Small profits rate: 19% on profits up to £50,000

  • Main rate: 25% on profits above £250,000

  • Marginal Relief on profits between £50,001 and £250,000.

These rates are subject to change, and you should always seek professional advice to ensure you are paying the correct amount of corporation tax.

Additionally, certain reliefs and deductions may be available to reduce your company’s taxable profits.

Don't let the thought of higher taxes put you off from increasing your income!

Step 4 brings you two powerful tips to conclude on this series

Step 4: The Need To Invest Wisely.

What do you do with the money you have saved so that it grows? 

Invest it.

What do I mean by investing?


Investing is when you use your financial resources to buy an asset with the goal of generating income or profit over time. 

It involves purchasing assets or financial instruments with the expectation that their value will appreciate over time, providing a return on investment (ROI) 

There are many ways you can invest such as investing in stocks, bonds, property, commodities, mutual funds, index funds or cryptocurrencies. 

3 reasons to Invest.

  • Generating passive income

  • Building long-term wealth

  • Hedging against inflation

Investing involves managing risk, diversifying portfolios, and making adjustments as market conditions change.

Qualities of Successful Investors:

investing can be a powerful tool for growing wealth over time, but it requires.. 

  • Knowledge

  • Patience

  • Discipline 


It is very important to consider working with a financial professional to help you make informed investment decisions.


Finally, Keep Educating Yourself.


Take the time to learn about personal finance, investing, and other financial topics. There are many resources available, including books, podcasts, and online courses.

To see how you can work with me 1 on 1 to grow your wealth book a call with me here www.elizabethbuko.com/apply

Remember, applied Knowledge is Power!


Overall, building financial equity is about taking control of your finances, making smart decisions, and staying committed to your long-term financial goals.


Have questions? Leave a comment, I would love to hear from you.


P.s.

If you would like to be a part of our FREE Money Making March webinar on Saturday March 25th at 12pm GMT to learn how to start making your money work for you,

Click the link below to sign up.

https://www.elizabethbuko.com/MMM





investing, build wealthElizabeth Bukoinvesting, financial literacyComment