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How to Take Care of Your Investments in Various Areas of Your Life

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How to Take Care of Your Investments in Various Areas of Your Life

Money sitting in a savings account is rarely the best way to make your money work for you. There are even stock investments that pay out quarterly that have done so for decades. Taking care of your investments will help them appreciate or allow you to get the most out of your investment in the case of a car. Allowing your home to go into disrepair before selling can lead to you losing thousands of dollars as it will be considered a fixer-upper. The following are investments that need to be taken care of in various areas of your life. 

Your Vehicle

People put different values on the vehicle that they drive daily. Some use their vehicle to make a statement while others simply need something to get them to and from work. The car that you drive is going to directly impact the expense of the repairs. Mercedes repair and Toyota repair are great examples of this as Mercedes are luxury vehicles. Take your car to get the oil changed when you know that you need to. So many issues come from a lack of care or lack of attentiveness to maintenance of a car. 

Your Home

The home that you live in could be costing you more money on the mortgage than you should be paying. Interest rates are currently at incredibly low percentages which can save you thousands during the lifetime of your loan. Take the time to have maintenance done on your home whether it is an HVAC checkup twice a year or a roof inspection before the rainy season. A home inspector is going to miss certain issues when it comes time to sell your home but not major ones like water damage. 

Your Stock Portfolio

Investing in the stock market can be quite a risky venture without the appropriate knowledge. A person can lose thousands in a matter of days by focusing their portfolio on risky OTC stocks. As you start to get a bit older you need to make your investment portfolio more conservative. The last thing you want is a huge loss on a stock investment to delay your retirement by years or permanently. Try diversifying your portfolio into various sectors and if you are not sure how to do this, you should consult a professional to assist you. Robotraders are popular as they automatically make trades based on data to earn money for you. 

Your Education

Your education is an investment that you likely take seriously. With all of the online classes, there are options to save immense amounts  of money. Being able to graduate college with little to no debt can help set you up for financial success in the next chapter of your life. Make sure that what you are studying cannot be automated by technology as far too many people see their careers disappear in today’s world.

Take care of your investments and they will ultimately take care of you. Use the tips above to make sure your ROI on each investment is as high as possible.

Why We All Need To Plan For The Inevitable

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Why We All Need To Plan For The Inevitable

People always want to put off the things that they don’t want to talk about and your funeral is one of those things. We take out the various life insurance policies to protect our families in the event of our death, but for some reason we are unable to plan the day that we know is coming to all of us at some point. We all know the importance of planning and how it can make life a lot easier, but planning your own funeral seems to be a taboo subject and one which many just don’t want to talk about. Think about it like this, if you had to plan your wedding, you wouldn’t be able to do it in just a few days, so why do you expect your family to be able to plan your funeral in the same amount of time. It is incredibly selfish thing to do while they are trying to deal with the stress of your death and the least that you could do is to plan your own funeral.

If you don’t know where to start, there are a number of Sydney funeral companies that would be more than happy to take you through everything that needs to be done. You can preplan your own funeral at any time and with it comes the many advantages.

* You ease the burden on your family – If your family doesn’t know what it is that you want when you die, it will be up to them to make the many difficult decisions at the time when they might just not be up to it. They might not know if you want to be buried or cremated or whether or not you want an open or closed casket. These are big decisions that need to be made and it would be much better if you made the plans beforehand. Your funeral director can perform many duties and if you plan now, then your family won’t have to do anything.

* The financial responsibility is yours – Many of these funeral plans allow you to start to pay today for the expense of your funeral and this helps to spread the costs out over a considerable amount of time. The benefits to planning and paying now, is a funeral may be a lot more expensive 15 or 20 years from now. Your family might not also have the necessary finances in place to pay for your funeral and they might have to take out a loan. This is pressure that you do not want to be putting on your loved ones and so planning now and paying now, is one of the kindest things that you can do.

* Your final wishes – All of these can be put into place because you are planning your final day yourself. If you have specific preference with regard to what they will do with your remains or what kind of burial service that you would like to have, and tell your funeral director now. For more information about planning a funeral, please have a look here.

Do the responsible thing and start to plan for your own funeral today. You plan for everything else in your life, so why not this.

How to Expand Your Business in a Budget-Friendly Manner

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How to Expand Your Business in a Budget-Friendly Manner

The satisfaction of running a successful business doesn’t fade over time but you might want to take on more. Some entrepreneurs want to earn a healthy living while being moderately successful. Others want to expand their businesses internationally or dive into entirely new markets to expand. Expansion needs to be done with the customer in mind, as you do not want to lower the quality of services or products being offered. There have been expansions that ultimately ruined a brand’s image. Others have really put the original business locations in financial peril due to overspending on expansion without profiting. 

Scale With Freelancers Instead of Expanding Your Current Staff

The freelance industry is immensely healthy at this point in time. Freelancers want contracts that are consistent as it makes it easy for them to predict their income. Long-term contracts with quality freelancers can create a mutually beneficial relationship. Money can be saved when compared to hiring employees in-house to complete certain tasks. Freelancers can be used as needed which can help save money if certain months of the year are slow. Create a list of tasks that a freelancer could handle that can improve the productivity of in-house staff members. 

Physical Expansion is Not Necessary For Some Industries 

A digital marketing company can work with clients around the world without any issue. In the past, most companies doing large deals together would want to meet physically. With social distancing and travel restrictions, this is not possible so the business world has transitioned to virtual meetings. Once the pandemic subsides, physical meetings might resume. Being in a hub of an industry can allow for social interactions to drive business decisions. Conferences are a great example as relationships formed at these events can influence business decisions for years. 

Invest in Market Research

The one aspect of expansion that can be tough to clarify is whether the business will see an adequate amount of demand. International expansion can be immensely difficult for cultural reasons. Marketing and advertising changes immensely by culture so hiring international teams will be required. A test expansion can be a good idea like a restaurant sending out food trucks. The most demand, the larger the number of trucks the business can send out. Do not simply expand into a region as it is a place that you would want to live but lacks talent in the industry and demand. 

Expand on Your Current Property 

Finding a completely different larger property can be expensive and a familiar location is important for certain businesses. Expanding on the current property can improve the value of the property while allowing increased productivity. These could include metal buildings for inventory storage or increased work areas. Take the time to research all of the options available as you would be surprised how affordable some are. 

Expanding your business in a budget-friendly manner will require being a bit conservative. Sustaining success at your current size should always be on your mind. Expanding can turn a small business into a regional and national brand.

5 Advantages of Taking Group Fitness Classes

Jason
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5 Advantages of Taking Group Fitness Classes

Lots of people make it their goal to work out and stay in shape, but far fewer actually see that goal through to its conclusion. That’s because working out a regular basis requires time, energy, and commitment. It can be tough to motivate yourself day in and day out, especially if you’re working out on your own.

Joining an exercise or fitness class is a great way to get back on track. There are all sorts of classes available, from yoga to kickboxing and everything in between. Signing up for one of these classes could become a life-changing event, setting you up for a healthier long-term lifestyle.

Exercise classes have countless benefits, both social and emotional in nature. Here are the top five advantages you can expect to enjoy by signing up for a group fitness class.

Easier To Get Motivated

Lack of motivation is one of the main reasons most people abandon their fitness plans. This is hardly surprising. After all, it takes a lot of energy and determination to drag yourself to the gym, track, or workout room each and every day. When you’re part of a fitness class, finding this motivation becomes a whole lot easier. For one thing, you’ll likely enjoy the class enough to actually look forward to attending. What’s more, your teacher will be a professional who knows exactly how to keep you going. Between the inspiration provided by the teacher and the encouragements of your classmates, you’ll find it much easier to stay motivated than ever before.

Classes For You To Commit

When you’re working out on your own, it’s far too easy to cancel a planned training session. Every slight headache or stuffy nose becomes an excuse to cuddle up in bed and leave the weights untouched in the basement. When you’ve joined a class, canceling a workout requires you to communicate with the teacher. This causes such embarrassment that you’ll usually opt not to cancel at all. In essence, this means your teacher and classmates are effectively holding you accountable.

You’ll Learn New Techniques

In addition to serving as group workout sessions, fitness classes are also just that: classes. You’ll learn all sorts of new techniques from your teacher, techniques you’ll carry with you for the rest of your life. Working out on your own can be boring, not just because you’re lonely, but because you’re stuck doing the same old exercises that you’ve committed to memory. Working out in a class will allow you to reinvent your exercise routine.

You’ll Make New Friends

While fitness classes are first and foremost about staying in shape, they’re also great places to make new friends. Everyone in the class will be able to easily bond over their shared experiences. Sometimes, this single point of connection is enough to give rise to new friendships of incredible breadth and depth. If you’ve been feeling lonely or unsatisfied with your social life, then joining an exercise class could be your first step toward a more lively, fulfilled existence.

You’ll Have More Fun

We’re social beings by nature, and we simply have more fun when other people are around. If you’re someone who gains little pleasure from working out itself, then you might appreciate how the social aspect of a fitness class can inject some fun into the workout routine. You’re likely to chat, smile, and laugh your way through each and every session. With so much camaraderie and joy spreading about the room, you might even forget that you’re working out altogether.

The Impact COVID-19-Related Laws May Have on Your 2020 Tax Return

Maren
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The Impact COVID-19-Related Laws May Have on Your 2020 Tax Return

The coronavirus pandemic has resulted in new legislation and few changes to other laws due to the coronavirus-related stimulus efforts. If you’ve taken advantage of any of these stimulus programs, they may affect your 2020 individual tax return, business tax return, or even both. 

Most of the tax changes come from the CARES (Coronavirus Aid Relief and Economic Security) Act and the FFCRA ( Families First Coronavirus Response Act). 

Covid-19 Legislation‘s Impact on Individual Taxes 

Your stimulus payment 

The economic impact payment you may have received this year is a refundable tax credit. You won’t have to include it in your taxable income on your 2020 federal tax return. The law also doesn’t need you to pay back any stimulus payments you may have received even if you don’t qualify. Ensure that you keep the notice you received with your tax records. 

Many CARES Act provisions have also made extra funds available from retirement plans, leading to a few tax consequences. 

Required Minimum Distribution Waivers (RMDs) 

Older people must take a minimum distribution from their IRA or any retirement plans, but the requirement has been waived this year, including beneficiaries of inherited accounts. Taxpayers who took distributions at the beginning of 2020 have been allowed to return the funds to their retirement accounts. However, you must return the funds before August 21, 2020. 

If you didn’t take the RMD or returned it on time and correctly, usually through your broker, it wouldn’t be included in your taxable income for 2020. If you didn’t give back the RMD, the amount, including any tax withheld, is taxable in 2020 since it will be considered a distribution from an IRA. However, the positive thing is that the withholding tax is paid in and can be applied to your 2020 taxes. 

Retirement plan or IRA distributions 

If you’re taking an early withdrawal of funds or may have taken from your employer’s retirement plan, IRA, or 401(k) between January 1, 2020, and December 31, 2020, for any coronavirus-related reasons, you can withdraw up to $100,000 from these funds without paying the additional 10% tax on early tax distributions. 

The tax effect of this is that you may have to pay the distribution over the next three years, which means that you must include the entire distribution in your income tax for every year that you repay. You can also choose to have the whole distribution in your income for the year 2020, which will increase your taxes. You can check with your tax advisor from http://www.taxfyle.com/ for the details on when these payments must be made. 

Retirement plan loan relief 

Another CARES Act provision allows for an additional year for the repayment of loans from qualified retirement plans. Outstanding loans from March 27, 2020, and any repayment due from this date to December 31, 2020, can be delayed for up to one year. 

This provision’s tax effect is that you can defer your payments for up to one year for such loans. The interest will continue to increase on balance and isn’t tax-deductible. This won’t affect your taxes for 2020. 

COVID-19 Legislation’s Impact on Small Business Taxes 

Paycheck Protection Program loan forgiveness (PPP) 

The Paycheck Protection Program is an SBA-supported loan program for small businesses affected by the COVID-19 pandemic. If you received a PPP loan, you might still be able to apply for forgiveness if you apply within the ten months of the covered period. 

The tax effect of how the forgiveness works is that you don’t have to include it in the gross business income for federal law tax purposes when a PPP loan is forgiven. However, the expenses that were paid with the PPP proceeds aren’t eligible for tax reduction. 

Employee retention tax credit 

The employee retention cash credit is a refundable tax credit for businesses that had their operations partially suspended, or had a decline in revenues due to the coronavirus pandemic. The tax credit is equivalent to 50% of employees’ eligible wages per calendar quarter up to $ 10,000, which means maximum credit per employee would be $5000. You can take the shared credit against your share of social security taxes as an employer by not withholding these taxes. You can also claim the credit on your quarterly payroll tax report on Form 941. 

The tax effect of any credit you receive is that you won’t have to include it in your gross income for federal income tax purposes, but you can’t deduct the amount of tax credit as an expense for your 2020 business tax return. 

It’s not a must to take the Employee Retention Credit, and if you choose not to claim the credit in one calendar year, you’re not stopped from claiming it in the subsequent calendar quarter. 

Deferral of the tax credit for sick leave and family leave payments 

The FFCRA allows small businesses to receive refundable tax credits to cover the cost of providing their employees with the required paid sick leave and expanded family leave due to coronavirus. The tax credits program is from April 1, 2020 to December 31, 2020. 

The tax credits can also be given for payments you made to an individual for sick leave or family leave due to COVID-19 situations, and even the costs of maintaining health insurance for eligible employees. The tax credits are available to self-employed business owners who take family leave and sick leave due to COVID-19. 

The tax effect of this is that the payments to employees are taxable to them, and they are subject to withholding FICA taxes (Social Security and Medicare) and federal income taxes. You must include the full amount of the credits for qualified leave wages in your gross income for the year. Employer payments of eligible family leave wages and sick pay is deductible as business expenses. The employer’s right amount deductible is the amount of federal employment taxes before reduction by the tax credits. 

The tax returns for 2020 can be tricky. Ensure you get help from a tax professional. 

Staying Afloat During Financial Downturns – How To

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We are all facing the times when thinking of personal finances staying afloat is a big challenge. It takes goodwill, time, and perseverance. However, with a clear goal and plan to stick to, everything is achievable. Here are the proven ways of beating financial downturns.

Determine your goals and anticipate big expenses

Setting concrete goals and achieving them is a great motivator and can contribute to your budget’s good management.

These objectives can be various and should therefore be personalized according to your profile.

The idea is not to put excessive pressure on yourself or to deprive yourself of everything to accomplish your goals at all costs, but to make sure you progress and get richer, if only a little, in the long run!

Finally, anticipating large expenses is essential in managing your personal finances. That’s why you should build up and always keep precautionary savings.

Usually a few thousand euros, this emergency fund will allow you, in the event of a hard blow (job loss, etc.), to avoid a situation of great financial difficulty from which it could be difficult to escape and to hold out until normalcy is restored.

Make sure to have alternative source of income

The internet today is full of many techniques that allow internet users to make money without leaving home. Contrary to what you might think, making a profit on the internet is not that difficult. One condition: find the technique that works. Rounding off your ends of the month legally with the internet without being scammed is possible in 2021. You, too, can understand how to earn money on a daily basis.

Realize your small business idea

You might have a small business idea nestled in your mind for a long time. You can start making it true and earn money from it. Start selling your ideas, products, or services by writing ebooks, selling online courses, or opening your shopping store on some eCommerce platforms such as Shopify, one of the most popular ones. 

Financial markets at your fingertips

Also, all kinds’ financial markets are at your fingertips thanks to the internet and many trading platforms. Making the second income with trading on financial markets such as stock, foreign currencies, or commodities is now available to anyone willing to try their trading skills. As by far one of the most liquid markets, Forex markets enable you to make decent income just by investing several hours a day in trading activity.

The first step would be to look out for the brokerage website. There are a multitude of these platforms, and most of them are great. Bearing in mind that selecting a Forex broker that suits your needs is the crucial factor of success, make sure you are going for the best one. Before venturing into real money trading, go for a demo account to practice the trading and learning the ropes.

Set yourself relevant budget rules

Willingness alone is not always enough to stay the course. Therefore, imposing budget rules on yourself and automating some tasks can go a long way in helping you achieve your management goals.

For example, you can start with a monthly payment of all your expenses to have a better view of them and anticipate more precisely the outflows of money to come. Nowadays, all energy bills can be monthly, just like taxes.

To meet your monthly savings goal, you can also automate the transfer of 10 to 20% of your salary to your savings account. This “forced saving” will protect you from the temptation to spend that extra cash before the end of the month.

Moreover, make it a rule to never go into debt to consume. Avoid consumer loans, even when buying a vehicle, to avoid paying hundreds or even thousands of euros in interest on purchases that sometimes only require a few months of savings. Be patient and protect yourself from the vicious cycle of debt.

Finally, you can optimize your budget by reducing or renegotiating your credits and bills (Internet and telephone subscriptions, energy bills, etc.).

Although small sacrifices (heating a little less, consuming less water …) and tedious steps (contacting your Internet provider, canceling an unnecessary subscription …) can be off-putting, the sums thus saved each month are not negligible!

Smartly balance your finances

Effective budget management requires an intelligent allocation of your expenses. Implement the rule consisting of dividing your budget into three main categories to which you allocate a certain percentage of your capital: 50% of your budget for basic expenses, 30% of your budget for leisure and pleasures, and 20% of your budget for savings and investment

This balanced budget method can be personalized according to your objectives and your income.

Regularly analyze your expenses

To assess how you spend your money, set a monthly or even weekly date for regular check-ups. Using a money management app where you can easily monitor your progress and change your goals. Group your expenses into categories to identify any unnecessary expenses. It is often small, repeated, and unnoticed expenses that prevent you from saving every month without you even realizing it!

How to Encourage Delivery or Carryout Services

Chris Turn
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How to Encourage Delivery or Carryout Services

Offering delivery services is becoming both increasingly popular and increasingly important to restaurant success. It is an easy and effective way to ensure your goods can more easily get to a customer.

However, there are a plethora of things that can go wrong that will leave your customers feeling disappointed. If you want to encourage customers to use a delivery service, you need to ensure that you’re selling it correctly and that you are offering incredible service.

Improve the service quality

The quality of the delivery service must be impeccable to retain your customer base. You should not try to execute any plan if you do not have the skills and the personal to back this up. 

Therefore, it is critical to improve all areas of service; including delivery times, the people who are undertaking the delivery, and the quality of the product itself. 

Create a mobile app

A mobile app is something that every single customer can obtain on their phone quickly and effectively. It can allow your customer at the tap of a button to get what they need. Online ordering is a simple but effective way to bring this to the customer. 

Online ordering is simple and will encourage customers to have their products delivered. Oftentimes, an app is even more convenient to use than a website. Apps are becoming increasingly popular, therefore you should be sure it is well designed and easy to navigate.

If your custom ordering app isn’t easy to use, people are more likely to stick to the conventional routes and your efforts may have been in vain. 

Offer discounts

Offering discounts is a great way to get people to use your app. If you have offers only obtainable through the app, then your app will naturally get more traffic and downloads from people wanting the deals. 

Ensure that your app is free to download too, which will make things even more attractive. Discounts are always a guaranteed way to get people’s interests. Everyone loves to get a deal!

Offer free delivery over a certain amount

Offering free delivery is a wonderful tactic for businesses. However, it can be costly if it is offered regardless of the price spent. Therefore, encouraging people to spend a certain minimum amount for free delivery is vital. 

Whilst free delivery may only save customers a few dollars here and there, it can help your business to push customers to add that extra item to their basket. 

Market your delivery service

Marketing is essential for any business and things become even more specialized when you’re targeting certain niches. You may want to promote one aspect of your business and in this case you need to ensure that you are using social media to the best of your ability. 

Look at utilizing Instagram and Facebook to spread the word and share your offers. Perhaps hire a professional to come in and advance your SEO efforts with your website. With all this combined, you are onto a winning marketing tactic. 

Encouraging customer behavior takes a little effort on your part, but with the right rewards in place, it is more than achievable.

Safe Harbor Law Increases HIPAA Security

Chris Turn
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Safe Harbor Law Increases HIPAA Security

On January 11, 2021, then-president Donald Trump signed the HIPAA Safe Harbor Bill into law, a new piece of data protection legislation designed to balance the needs of companies against the interest of the general public. 

The House Energy and Commerce Committee passed the bill to the senate in mid-December 2020, before the upper house confirmed the new piece of legislation without amendment on December 19.

The Safe Harbor Law attempts to improve data security while also providing clarity and fairness for healthcare organizations. 

The new piece of legislation directs the Department of Health and Human Services (HHS) to take into account both the business entity’s security practices, but also those of their associates and covered entities, when considering HIPAA regulatory and enforcement actions. This means that organizations can be held accountable for the actions of related third-parties. 

The law also demands that HHS consider the cybersecurity status of an organization when calculating fines and taking legal action. Having better security could potentially mean lower penalties. 

The new law aims to protect organizations from government action. The rules, for instance, put strict limits on the extent and length of HHS audits while also making clear when the entity has met industry-standard security criteria. They also forbid the HHS from increasing fines or deepening the audit if the organization is not in compliance with the rules. 

The purpose of the law is to address what lawmakers call “equity issues” regarding organizations under persistent attack by cybercriminals. Many HIPAA actions in the past applied severe penalties to organizations regardless of the sophistication and diligence of their existing cybersecurity practices.

The new amendment makes the current arrangement fairer and properly incentivizes investment in new security measures by improving the cost-benefit ratio. Now companies know that if they put in place well-defined security arrangements, they can protect themselves against HHS auditors looking to extract large fines. 

The ultimate goal of the legislation is to encourage health providers to improve cybersecurity for the benefit of patients. The more worthwhile their security efforts are and the more they can protect their financial interests, the more likely they will be to engage in them. Furthermore, with the inclusion of industry-standards such as best practices, guidelines, standards, methodologies and procedures, providers now have a much better concept of the security level they need to attain.

This new piece of legislation joins a raft of other changes being introduced by the HHS. For instance, the department finalized a set of rules that allowed hospitals and health systems to donate cybersecurity technologies to providers. New legislation also makes changes to the HIPAA privacy rules, giving patients more control and access rights over their medical records.

Healthcare providers looking to improve their cybersecurity can outsource the task to an IT company in Bridgeport. Seeking external help ensures that providers avoid many of the usual pitfalls and achieve the minimum standards required by the new Safe Harbor law. The new setup should represent an improvement in the relationship between healthcare organizations and regulators.

Why Future-Proofing Your Home Is the Best Way to Age in Place

Maren
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Why Future-Proofing Your Home Is the Best Way to Age in Place

More and more seniors seem to be choosing to age in place rather than pack up and move to a retirement community or assisted-living facility, and you can’t blame them. No matter what the reasons are that they are making this decision, the fact remains that there will need to be some upgrades and additions made to enhance safety. With that in mind, here are some ways to future-proof your home so that you may enjoy it for many years to come.

Take Lighting Seriously

Insufficient lighting is one of the many causes of seniors enduring accidents in their own home. What may have once seemed bright enough now is not good enough to properly illuminates the living spaces. As people grow older, their eyesight weakens so it only makes sense to update the lightbulbs with brighter LED bulbs that also last much longer than their incandescent counterparts. To avoid accidents involving light sockets, try to raise them to a level where they can be used without having to bend over, but while sitting instead.

Perform A Walk-Through

Walk through the home and look for areas that are prone to have clutter from some things as shoes, books or newspapers, as well as cords. Find places in the home where they will not be in the way and so easily tripped over. Bundle cords when possible so that they are not laying all over the floor. Stray cords can be one of the more frequent reasons seniors’ trip and fall in their home.

Install an Elevator

While it may be an upfront cost to you, having future-proofing residential elevators installed in the home is a fantastic way to avoid accidents from falling down the stairs. When you grow older, your balance or leg strength may not be what it used to be. This can be quite dangerous, especially if you live alone. Residential elevators relieve you of the need to use the stairs at all. While most insurance policies will not pay for them, if you or your spouse is a veteran then you may qualify for the HISA program which helps to cover the costs involved with installing an elevator.

Install Smart Devices Wherever Possible

While technology might not be your thing, there are some easy ways to make it work for you. These days, there’s a smart version of just about every appliance or electrical system that you can possibly think of with many safety features in place. If you still want to enjoy cooking, inquire about having a smart oven installed. These appliances come equipped with motion sensors that alert the oven to shut off is no movement has been detected for a certain period of time. Streaming speakers can be programmed to communicate with other family members to ward off loneliness. Smart lighting and thermostats can be programmed to turn on or off at certain times of the day or can be instantly activated at the sound of your voice. This way a light can be turned on before getting out of bed or entering a room.

Shattuck: A High RIsk But Worthwhile Bet

Jason
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Shattuck: A High RIsk But Worthwhile Bet

Shattuck (ticker: STTK), the clinical-stage life science company treating cancer and other autoimmune diseases, has done right by its early backers. Since listing on the Nasdaq on 9 October, when it raised over $232 million, with an IPO price of $17, it has appreciated to around $28 per share. 

Funding was raised to advance development of its lead product, SL-172154, which is in Phase 1 clinical trial for the treatment of ovarian cancer; and SL-279252 which it is developing in collaboration with Takeda Pharmaceuticals and is in Phase 1 clinical trial in patients with advanced solid tumors and lymphoma. STTK plans to roll out two new clinical trials next year. Initial data from the trial of SL-172154 will only be available in 2021. 

Evaluating a business whose core products are still at the clinical-trial stage is fraught with difficulties. The value of a drug program grows over time, assuming the program is successful at each stage, from the start of the program to Phase 3. Even with a large addressable patient population and the best event space, the business may simply fail to either arrive at the results they need to seek FDA approval, or, that approval may be denied, or a fate somewhere in the middle may happen and the process from clinical trial to drug approval takes longer than expected and costs much more than anticipated. We have witnessed as much with the development of the Covid-19 vaccine where AstraZeneca and Johnson & Johnson had to halt trials. There are non-trivial reasons to believe that STTK may experience complete failure or delays in development and this will affect valuations. 

The probability that a drug program reaches Phase 2 from Phase 1 is 20% and the probability it reaches Phase 3 is 56% (if it fails, the value generally goes back to zero). Even if we assume that STTK is confident it can get to Phase 2 because the data they are getting is impressive, the odds of getting to Phase 3 are not overwhelmingly in their favour from a base case perspective. The period from Phase 1 to Phase 2 and 3 may be elongated by problems in the trials, as we have seen happen with the Covid-19 vaccine. 

Though STTK has revenues, those revenues are not meaningful in terms of the core business. It really does not matter how much it makes from its partnerships and what its return on invested capital is, etc, because the real business is in the future. We do not know how management will allocate capital in a post-Phase 3 world, or how profitable the business will be or how fast revenues will grow. If STTK fails to reach Phase 2 or Phase 3, the value of the business will collapse regardless of revenues from its partnership agreements. Those simply do not reflect what the company is about. 

We can not evaluate STTK using traditional historical measures simply because they have not yet brought to market their core product. The SL-172154 and SL-279252 drugs are of limited value until they reach Phase 2. If STTK reaches Phase 2, investors will reap a huge price appreciation due to the surge in value of those drugs. 

STTK is Derisking and Growing Value

In drug development, derisking, rather than revenue, profits, and other such traditional metrics, drives value creation and STTK has been derisking through its clinical studies. 

Phase 1 clinical trials using the SL-172154 compound have opened. The first clinical trial will explore intravenous administration of SL-172154 in patients with ovarian, fallopian tube, and primary peritoneal cancer. The second clinical trial will enroll patients with squamous cell carcinoma of the skin and head and neck who will receive SL-172154 via intratumoral administration. Phase 1 of its clinical trials of SL-279252 commenced in 2019 and dose escalation is expected to be completed in 2020. This study includes two dose expansion cohorts: one that will enroll patients with non-small cell lung cancer and another “all comers” cohort. 

Remembering our base rates for moving to Phase 2 and Phase 3, we have to understand that these clinical trials offer more than just the ability to test whether the drugs are safe for humans. From the start of the program to Phase 1 clinical trials, STTK have studied both drugs extensively on disease cells in the laboratory and/or in laboratory animals. The advantages of working on cancer in Phase 1 clinical trials have grown mostly due to the Human Genome Project (HGP). The HGP, which was completed in 2003, allows scientists to discover the sequence of all genes found in humans, which allows for medical advances in the diagnosis and treatment of many diseases, including cancer. Before the HGP, Phase 1 drugs existed as a last ditch effort to test the safety of a drug, without any real benefits accruing to the patient.

Now, patients can benefit right off the bat if the drug works. STTK’s methodology further reduces risks by using its Agonist Redirected Checkpoint (ARC) program for advanced cancers to teach the patient’s immune system how to fight off cancerous cells, similar to how it fights off other illnesses. In conjunction with its ARC program, STTK is working on a biotech , Gadlen, that will work on the gamma delta T cells in the body. In plain English, the reduced risk brought about by HGP, coupled with the reduced risk brought about by ARC and Gadlen, not only improve the value of the company but heighten their chances of FDA approval for Phase 2 trials. HGP alone has increased survival rates of patients and STTK is confident that its treatment has the potential to restore anti-tumor immune responses and improve survival in cancer patients.  

So far, positive binary events have catalysed STTK’s value, but as we have said, value creation is tied to derisking through clinical trials, which itself opens a company up to dramatic swings in value when new data from experiments and studies comes in. Investors should then be aware that value creation is prone to extreme levels of volatility. 

Valuations of drug companies at this stage are highly sensitive to the discount rate because each phase of drug development requires fresh and large injections of capital. STTK benefits from an environment of low interests which seem to be in secular decline. STTK then is likely to have a very low long-run natural cost of capital. The pandemic has brought into focus innovative companies that have solutions to different diseases out there and so a lot of generalist investors are very focused on healthcare and biotech and healthcare technology. Furthermore, investors are more willing to invest in high risk projects because of the amount of quantitative easing that has taken place. COnsequently, it is likely STTK will not face an adverse discount rate. If STTK can complete its drug developments program in this low-interest rate environment, it will be able to drastically reduce drug prices to capture market share. 

A Tough Market

The nature of the pharmaceutical industry is that each drug, by definition, has a moat, it is protected by law, even if that moat comes with an expiry date. However, the value of that moat in a post-Phase 3 world is dependent on the competitive landscape, quality of the drug and the size of the addressable patient population. STTK is pursuing a concept that is revolutionary, but they are in this race alone. STTK is in a race with large pharmaceutical and biotechnology companies, such asAstraZeneca/MedImmune, Bristol Myers Squibb, Merck, Novartis, Pfizer, and Roche/Genentech; academic institutions, government agencies and other public and private research organizations that conduct research, seek patent protection and establish collaborative arrangements for the research, development, manufacturing, and commercialization of cancer therapies. 

If STTK can successfully develop its product candidates, they will compete with existing therapies and new therapies that may become available in the future. The competition is fierce and many of their present and future competitors are better funded and have greater expertise in research and development, manufacturing, preclinical testing, conducting clinical trials, obtaining regulatory approvals and marketing approved drugs. 

The biggest risk the business has is that one of its competitors gets FDA or foreign approval faster than it does and establishes a lead in the market that it may never relinquish.

A Bet Worth Taking

Much of this study has pointed out unknowns and the fallibility of financial measures when values are pretty much in the future and financial statements are meaningless. Yet the steps STTK has taken lead us to believe that it will achieve Phase 2 approval, even if there are delays, because the nature of the drug program, the advances brought about by HGP and the testing so far have not only derisked the drug program but they limit the chances of negative outcomes for patients. Needcamp and Citigroup have near-term price targets of $34 per share. This should be easily achievable. The question is if derisking will continue to create value for the company. If it can, the gains for shareholders will be astronomical. As a risk/reward question, this is a bet worth taking. 

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