Shownotes
Reinvesting all of the money you earn back into your business isn’t a retirement strategy.
While it can feel a lot sexier to bet on yourself and your ability to grow, it puts you at a huge risk if anything happens in your business and it’s not able to provide you the retirement fund you wanted.
But saving for retirement feels daunting for a lot of business owners. When we were at 9-5 jobs, our employers would just take some money and put it into a 401K. We barely thought about it.
If this is you, tune into this episode to hear the different types of retirement accounts you can consider (some of which even help lower your taxable income to save on that tax bill!)
You’ll understand the different account types to know what to ask your CPA and you can work with your bookkeeper (or us here at Know Your Worth) to help know how much you can sustainably pull from your business to contribute to your retirement.
03:27 — Re-investing into your business isn't a retirement strategy
05:16 — The easiest (and best) place to start contributing to your retirement fund as a business owner
10:49 — Understanding the penalties for taking money out early
14:53 — When should you work with a professional or set these up yourself?
16:41 — Why you don’t want to wait to start investing
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Transcripts
I would say that the easiest way to jump into saving for retirement
Speaker:is putting money into IRAs.
Speaker:It's actually the easiest setup.
Speaker:It doesn't involve any real additional intensive paperwork or anything like that.
Speaker:And you can also set up an IRA with any, pretty much any brokerage
Speaker:firm or even banks offered as well.
Speaker:Welcome to the Know Your Worth Show, where we teach you how to think about
Speaker:your money differently so that you can achieve your sexy money goals.
Speaker:I'm Sydnee your money Maven and owner of Know Your Worth.
Speaker:And I'm Kristen Sid's Dimepiece bestie team member and busy mama
Speaker:twins here to make sure that those of us without a financial degree can
Speaker:still level up with each episode.
Speaker:Let's get started on reaching your next goal.
Speaker:Hello, welcome to the know your worth podcast.
Speaker:I am one of your hosts, Sydney Conway,
Speaker:and I'm Syd's dime piece bestie and assistant Kristen.
Speaker:We are in our 23rd episode now, and for our 23rd episode, we have our first
Speaker:guest on the Know Your Worth podcast.
Speaker:Alex, do you want to introduce yourself?
Speaker:Hello, my name is Alex Conway.
Speaker:I'm very happy to be here today.
Speaker:Glad to be the first guest, for
Speaker:Yeah,
Speaker:we are happy.
Speaker:We're happy to have you on as our first guest.
Speaker:How did you earn the spot as the first guest?
Speaker:I
Speaker:You know, The best person for the job,
Speaker:think, people in high places.
Speaker:Yeah, I may or may not know the people on this podcast.
Speaker:maybe just briefly.
Speaker:Yeah.
Speaker:No so Alex and I are married for those of our listeners that
Speaker:haven't picked up on that yet.
Speaker:Who I've referred to as Alex, this is him in the virtual flesh, virtual flesh.
Speaker:That's gross.
Speaker:It is.
Speaker:That was terrible.
Speaker:I might have to take that back.
Speaker:We might have to cut that.
Speaker:Do not cut that.
Speaker:That was amazing.
Speaker:Virtual flesh.
Speaker:Today we have Alex in here to talk about one of the questions we've
Speaker:actually gotten from a couple of our listeners as a potential topic,
Speaker:which we agreed was a very good one.
Speaker:We were actually.
Speaker:Planning the whole time on bringing this topic up and
Speaker:bringing Alex in to talk about it.
Speaker:So we're going to be talking about retirement planning and all of the options
Speaker:available to you as a business owner, as an individual and just probably ones that
Speaker:you're might already be familiar with as an employee that if it's offered at your
Speaker:company or you've already started one today's going to be a little bit more of
Speaker:maybe those who don't have anything set up yet or are looking to get started.
Speaker:Dip their toes into the world of retirement planning.
Speaker:So Alex, could you give us a little bit of your background and why you
Speaker:might be our guest on today's episode?
Speaker:Woo!
Speaker:So my background is in finance.
Speaker:I actually worked in finance for the last 10 years.
Speaker:All in the investment side, it was investment operations.
Speaker:So I dealt with anything you can think of going around investments.
Speaker:It's, from.
Speaker:Financial planning to making sure you got tax savings, compliance anything
Speaker:operational on the investment side.
Speaker:I was actually the director of investment operations there before I left.
Speaker:And now I am here at Know Your Worth.
Speaker:I'm a bookkeeper here.
Speaker:I'm happy to be on the team.
Speaker:And I'm doing a lot of operational stuff here as well.
Speaker:I actually have a few clients that do have investments, and I try to help on
Speaker:the accounting side of it now, making sure that, the journal entries are all
Speaker:good to go valuation adjustments and keeping track of their gains and losses.
Speaker:So that's a little bit of background.
Speaker:And where I'm at currently.
Speaker:Great.
Speaker:Thank you for that introduction.
Speaker:We're happy to have you on the team here at KnowYourWorth.
Speaker:Let's start from the beginning.
Speaker:Let's say I'm a business owner, so I have my own business and I have no idea how
Speaker:to get started into retirement planning.
Speaker:What would be just one of the first things you'd say?
Speaker:Yeah, 1 of the 1st things I would say is just 1, I will
Speaker:say you're in the right place.
Speaker:If you're starting to ask these questions because it's always important to make sure
Speaker:you're saving for retirement, especially as a business owner, because mostly you're
Speaker:putting all of your money back into your business to try to help and grow it.
Speaker:So it's important to make sure you are putting something away to save
Speaker:yourself from, what if, you don't sell your business for what you
Speaker:want to sell it for down the road.
Speaker:You also have additional money from your retirement accounts.
Speaker:So you're in the right place to be able to start there.
Speaker:There are several different accounts that you can look into.
Speaker:But I will say that finance can be confusing.
Speaker:So reach out to your financial advisor.
Speaker:They always have a good team of people to go through these things with you as well
Speaker:as your CPA could be a really good person for this because they're the ones who
Speaker:filing your taxes at the end of the year.
Speaker:So they'd be able to give you the right recommendation of, based
Speaker:off of your current situation, what you'd be looking at.
Speaker:But I will say that the most common ones, we all have heard of our 401ks.
Speaker:There are different types of 401ks.
Speaker:There is a traditional 401k and there's a Roth 401k.
Speaker:For business owners there's also a solo 401k.
Speaker:And I can get into more details about all of those three as well, if you'd like.
Speaker:But then on top of that, you have regular IRAs, Roth IRAs, and
Speaker:then there's also a simple IRA.
Speaker:And a SEP IRA probably be the most common ones that you'd
Speaker:come across as a business owner.
Speaker:They sound like races.
Speaker:Okay.
Speaker:So I'm just going to give you a scenario.
Speaker:I was a teacher or in the educational system for 14 years.
Speaker:So my retirement was just like part of my, it was part of
Speaker:my contract, part of my pay.
Speaker:Now I don't do that anymore.
Speaker:So obviously I want to start somewhere.
Speaker:This is real life.
Speaker:I actually do need to start doing this.
Speaker:So if you, as my friend and somebody who has information that I don't have
Speaker:where would you suggest that I start?
Speaker:I would say that the easiest way to jump into saving for retirement
Speaker:is putting money into IRAs.
Speaker:It's actually the easiest setup.
Speaker:It doesn't involve any real additional intensive paperwork or anything like that.
Speaker:And you can also set up an IRA with any, pretty much any brokerage
Speaker:firm or even banks offered as well.
Speaker:There's just a difference between whether or not you want to do
Speaker:pre tax money or after tax money.
Speaker:And that would be the difference between a traditional IRA or a Roth IRA.
Speaker:What does that mean?
Speaker:So, yeah, great question!
Speaker:Traditional IRA is pre-tax, so is a traditional 401k.
Speaker:So what that means is that's money that is coming out of your
Speaker:pay before taxes are taken out.
Speaker:Essentially what it's doing is you're putting it in pre tax.
Speaker:And it grows what's called as tax deferred through your working career.
Speaker:And whenever you go to take money out in retirement, you get taxed
Speaker:at that time to take it out and it's taxed as ordinary income.
Speaker:So as soon as you need that money in retirement, if it's pre taxed,
Speaker:just think of it as it has not been taxed yet and it will be later.
Speaker:And then the other one is after taxes.
Speaker:Yep.
Speaker:And the Roth IRA is after tax money.
Speaker:That is net of your pay and that is money that is going in that you
Speaker:cannot use as a tax deduction because you're not lowering your taxable
Speaker:income by taking it out of your pay.
Speaker:So it's after tax money and that grows tax free.
Speaker:You don't have to pay for it at retirement.
Speaker:There's no additional taxes on it because you've already paid those taxes whenever
Speaker:you put the money into the account.
Speaker:So you just have to decide as an individual do I want to be in pain
Speaker:now or do I want to be in pain later?
Speaker:Yes.
Speaker:And Alex can go into this a little bit more too, that it'll depend
Speaker:on what tax bracket you plan on being in versus what you're in now.
Speaker:So you can keep going on that one, Alex, but yeah, so that's you're like,
Speaker:you're guiding yourself down this path
Speaker:You're on top of it.
Speaker:I have a lot, I have a lot more, so keep going.
Speaker:Okay.
Speaker:Okay.
Speaker:So explain that part.
Speaker:so tax rates are a huge piece for whether or not you want to go into a
Speaker:pre tax account or an after tax account.
Speaker:That's based off of.
Speaker:Your income earning years.
Speaker:For example, if you most of the time, I would say, you want to blend of some
Speaker:pre tax and some after tax some most of the time that happens through 401ks
Speaker:and then like a Roth IRA, but the reason why you would go with pre tax is
Speaker:essentially say you're either at your highest income earning years right now.
Speaker:And later on in life, you're not going to be making this amount of money
Speaker:and you don't need to your mortgage and stuff like that's paid off.
Speaker:You don't need that amount of money.
Speaker:So you don't need to pay those taxes now.
Speaker:You can save them for later.
Speaker:So essentially if you think your income is going to be higher later in life
Speaker:or near retirement age, you want to have after tax money because you're
Speaker:going to be taking that money out.
Speaker:So you're taking it out without having to pay taxes for Roth.
Speaker:Where if you had all pre tax money and you're making more money later
Speaker:in retirement, as soon as you pull it out, you actually are then paying taxes
Speaker:at your highest income or in years.
Speaker:So it just depends on your marginal tax bracket or where you want to be at.
Speaker:Now versus later
Speaker:It feels like a gamble.
Speaker:Yeah.
Speaker:How are you supposed to know?
Speaker:And
Speaker:You can change it too.
Speaker:So like you, and correct me if I'm wrong here on any of this, Alex,
Speaker:like you can change what your investments are throughout by doing
Speaker:transfers and things like that.
Speaker:But there are stipulations to when the tax is pulled, correct?
Speaker:Or like you can start new accounts in different markets.
Speaker:So say you're paying taxes now on, your one post tax account and you
Speaker:realize you should have another one.
Speaker:You can set up another one and contribute to that one as well so that you start
Speaker:to build that one up and then we're just reduce the contribution to the
Speaker:other one if you determine that you're shifting or if your goals realign.
Speaker:Yeah.
Speaker:So essentially you can control what you put into it.
Speaker:There's just a maximum amount for each type of account that you have.
Speaker:Every account has a role that either makes it a good one or a lesser
Speaker:value one to you as an individual.
Speaker:That's why it's, it can be very complicated for a business owner,
Speaker:especially because you're not typically getting a W2 payment or a payment coming
Speaker:from a corporate that just has a 401k.
Speaker:You're like, okay, great.
Speaker:Put 10 percent into my 401k and we'll match you 3%.
Speaker:That's a very easy, simple thing for you to do.
Speaker:Cause that company already has it set up, but as a business owner,
Speaker:you got to think of a lot of other pieces as well as, your employees.
Speaker:What do you want to do for them?
Speaker:Do you want to have additional benefits for them to retain them or to attract
Speaker:employees, or is it just you by yourself?
Speaker:So there's so many more variables, I think, as a business owner
Speaker:than as a individual that is just taking money from a W 2.
Speaker:Not saying one's easier than the other one, because there's also
Speaker:decisions that need to be made, obviously, the other way too.
Speaker:But there's just so many different options that makes one of them better
Speaker:for you, and then another business owner, it doesn't make sense for them.
Speaker:So it just, it depends.
Speaker:So I would come in and say here's my situation, Alex, I
Speaker:have to start something now.
Speaker:I don't have a ton to contribute every month, but I would just
Speaker:like to know that I'm doing it.
Speaker:And then I would tell you how much I think I can contribute.
Speaker:And you would say, this is probably the best option for you then.
Speaker:Give pretty much like your whole background.
Speaker:It's pretty much like giving your whole background.
Speaker:Do you have employees?
Speaker:Do you want to, have a match option?
Speaker:Do you not want to have a match option?
Speaker:Do you want to be able to put a ton of money into one account because some of
Speaker:them have higher limits, but they don't have a matching option like that SEP IRA.
Speaker:I mentioned all of them have benefits and some of them have cons.
Speaker:So you got to pull pros and cons list going back and forth
Speaker:for these types of accounts.
Speaker:Are there accounts where like you have to be a certain age to use
Speaker:them or is that a dumb question?
Speaker:No,
Speaker:No, it's not a dumb question.
Speaker:You just have to be earning income essentially is the biggest thing.
Speaker:And then obviously you have to be old enough to be able
Speaker:to have your own account.
Speaker:But everybody that typically has their own business would be old
Speaker:enough or have earned income to be able to contribute to an IRA.
Speaker:Or 401k
Speaker:being old enough to contribute isn't, that's, age isn't a bad topic
Speaker:because there are age requirements to when you can pull things out.
Speaker:when
Speaker:you can, without being penalized.
Speaker:So there are absolutely requirements to when you can pull things out,
Speaker:when you can take, when you have to pull things out there are
Speaker:definitely age requirements for that.
Speaker:A hundred percent.
Speaker:And that is a very good point is that a lot of those accounts,
Speaker:you don't want to touch them.
Speaker:Like IRAs, 401ks, stuff like that.
Speaker:You have the ability to take it from it.
Speaker:That's totally fine.
Speaker:The first time that you can take it out without having any like penalties
Speaker:assessed or having to take on like an income tax is 59 and a half.
Speaker:Obviously in those traditional or pre tax monies, you would still have to pay the
Speaker:income tax where after tax or Roth, you wouldn't have to pay for that income tax.
Speaker:And that doesn't count if you're rolling it over, say you switch
Speaker:companies, you can roll over accounts and not have any penalties assessed.
Speaker:Yeah, exactly.
Speaker:And rollovers, they just have to go like the type of account it is
Speaker:to the other type of account it is.
Speaker:So for example, if you're 401k currently, or you have a 401k set up
Speaker:that you can roll other 401ks into.
Speaker:You can move them all over, no cost to roll it over, you just
Speaker:pull it all over because it's going from pre tax to pre tax, or it
Speaker:would go after tax to after tax.
Speaker:So it has to be like a lateral
Speaker:Yep.
Speaker:You can do the other way, but if you go pre tax to after tax, you have to pay
Speaker:those taxes at the time of the rollover to be able to make sure that you're paying
Speaker:taxes now to get it into Roth money, which is another strategy between IRAs too.
Speaker:You can do that also.
Speaker:Roth IRA is Once you hit a certain income limit, you can't contribute to them.
Speaker:So they can do things where you put it into pre tax and then pay the taxes
Speaker:on it and put it into a Roth IRA.
Speaker:That's called a backdoor IRA, just so I state what that is.
Speaker:But
Speaker:That might be on the next episode.
Speaker:yeah, exactly.
Speaker:Like I said, it gets very complicated.
Speaker:The further down you go
Speaker:a lot of options.
Speaker:Yeah.
Speaker:And
Speaker:it's so personalized.
Speaker:It feels like playing a board game.
Speaker:It is.
Speaker:Cause one of the things I was going to say earlier, like when Alex was saying
Speaker:you ask your financial advisor or your CPA, The reason why you wouldn't
Speaker:necessarily ask your bookkeeper is because I only know your business.
Speaker:I don't know your personal for the most part.
Speaker:So I can help you with what your business can contribute
Speaker:and what your business can do.
Speaker:Say you're a, the single owner of a business, you're the only employee,
Speaker:and so you're pulling from your business to fund your retirement.
Speaker:I can absolutely give you more insight on cashflow and what you
Speaker:can pull out and contribute to that.
Speaker:But I don't necessarily know what the best account is for you, because I
Speaker:don't know what your partner makes.
Speaker:I don't know what your tax bracket is as a whole family.
Speaker:I'm not always aware of some of those things.
Speaker:So you can ask your bookkeeper for assistance, but in terms of what to
Speaker:open, when, how, that's a very personal question that really is the, what was the
Speaker:buzzword, Alex, that everybody always used to use is like a holistic approach, right?
Speaker:Holistic, yeah.
Speaker:They want a holistic financial planning, which means it's
Speaker:like everything altogether.
Speaker:So it really is all encompassing of like your businesses, your
Speaker:personal investments, your partner's income, your family goals and plans.
Speaker:Like it really does bring it all together.
Speaker:And that's not something that your bookkeeper might know.
Speaker:Your tax accountant that's filing your taxes for your family is going
Speaker:to have a little bit more insight on that, but the financial planner is
Speaker:going to be the one that their goal is to set you on the right path.
Speaker:The tax account is going to make sure that you have things set up correctly, you're
Speaker:pulling correctly from those channels and then you're filing the taxes correctly.
Speaker:That's the tax accountant and the bookkeeper is going to be able to help you
Speaker:when it comes to your business and that.
Speaker:But the financial planner is going to be the one that really helps dictate
Speaker:what the right path is for you.
Speaker:That makes sense.
Speaker:I'm going to ask a very basic question, but I bet somebody
Speaker:out there is wondering this.
Speaker:Ask them.
Speaker:Can I just go online and do this, or do I have to walk into a building and
Speaker:have a conversation with somebody?
Speaker:So you don't really need to walk in to talk to anybody.
Speaker:Most of the time, if you, so let's just say you don't have a financial
Speaker:advisor or you don't know where to go.
Speaker:If you try to think about the companies that do this, it's
Speaker:going to be your fidelity.
Speaker:Your Vanguard, Wells Fargo, those kind of companies they're all
Speaker:going to be able to do 401ks.
Speaker:They're all going to be able to help you with that.
Speaker:But some of it is online.
Speaker:You can just set up an IRA by filling out a document and then signing off on it.
Speaker:You don't technically need anybody for that, but you're going to have to
Speaker:fill out your information because they need to know that you're making money.
Speaker:Because that's the one thing about an IRA is that you need to be able to, Prove
Speaker:that you're making income because you can't contribute to it if you don't but
Speaker:401ks are a little bit more in depth and take a lot longer to set up essentially.
Speaker:So there's more paperwork.
Speaker:There's Arisa audits, which I know Sydney you know about that 1 there.
Speaker:I hate it.
Speaker:I hate Arizona.
Speaker:You also need to pay for being able to
Speaker:boring.
Speaker:yeah.
Speaker:I'm sure that you enjoyed that.
Speaker:My gosh, so boring.
Speaker:But for one case, they're obviously the most common and most often used retirement
Speaker:accounts, but there's administrative fees expenses to set them up as well
Speaker:as monthly going on forward for the business owner, but there are like
Speaker:some also like tax credits and stuff like that, that you can apply for as a
Speaker:business owner to have these types of accounts set up to help minimize it.
Speaker:You just have to essentially be able to go through and check off that you
Speaker:are that type of person or employee base or your company that way you
Speaker:can be the right fit for that.
Speaker:But most of the time it's you need some extra pieces and you also have to pay
Speaker:for extra fees going forward for 401Ks.
Speaker:Is there ever a wrong time to start doing this?
Speaker:I don't think there's ever a wrong time to start planning for retirement.
Speaker:It's one of those things that if you're planning and you're setting
Speaker:aside funds now and you are like, oh crap, I need this money back.
Speaker:You can take it back out.
Speaker:Like it's a savings account.
Speaker:You can take it back out.
Speaker:You might pay a fee or a penalty for taking it back out early, but there's
Speaker:never a wrong time to start saving money.
Speaker:No.
Speaker:And the one thing that the IRS allows the one thing that the IRS allows
Speaker:also is called catch up contributions.
Speaker:Which is once you hit 50 and older, you can actually add additional payments to
Speaker:it, to maximize the amount of money that can put into these retirement accounts.
Speaker:So for example, like your 401k, that would add additional money.
Speaker:Your IRA, you can put in additional money once you hit 50 and older, and
Speaker:they're called catch up contributions for anybody that, either started late
Speaker:or they didn't have a 401k, or they didn't have a retirement plan at all.
Speaker:And they want to hurry up and try to put more money into it.
Speaker:There's a lot of different variables that kind of come into that, but
Speaker:that's why they give that option.
Speaker:So there's never a wrong
Speaker:like a lump sum in.
Speaker:You can always put a lump sum into for IRAs.
Speaker:You can yeah, for sure.
Speaker:But for the catch up contributions, there are annual limits to how much you can
Speaker:contribute to a lot of these accounts.
Speaker:So pick one, Alex.
Speaker:What's one and what's the limit for it?
Speaker:Yep.
Speaker:So every year, just, also contributions.
Speaker:It's usually every year.
Speaker:If not every other, they reevaluate it and up it a
Speaker:course they do.
Speaker:Yeah.
Speaker:So they,
Speaker:you to put more in because they know how hard life is right now.
Speaker:They want us to be able to save more.
Speaker:so for 2024 401ks are at 23, 000 is how much you can put into them maximizing it
Speaker:Every year.
Speaker:Every year, that's the maximum amount into a 401k that you can put into it,
Speaker:Because they're really good investment vehicles, so they, the retirement
Speaker:plans are very good investment vehicles that have great growth opportunity.
Speaker:So because of all of the benefit you can get from it, they limit
Speaker:how much you can put into them.
Speaker:That's nice.
Speaker:But IRAs are way less IRAs are only 7, 000 that you can put into it like a
Speaker:normal traditional IRA or normal Roth IRA.
Speaker:It's only 7, 000 that you can put into that account.
Speaker:And another question I'm sure a lot of people have is, can I
Speaker:have both like a 401k and an IRA?
Speaker:I was gonna ask.
Speaker:Yeah.
Speaker:The answer is absolutely.
Speaker:You definitely can.
Speaker:You just can't multiple
Speaker:accounts.
Speaker:Yep.
Speaker:You can have a 401k and an IRA and maximize both of those.
Speaker:You cannot have two 401ks or two IRAs and maximize both of those.
Speaker:They're all separate entities, but treated as a maximum together.
Speaker:So if you had two 401ks together, they couldn't cross that 20, what'd
Speaker:you say, 23, 000 or two IRAs, like together they couldn't pass 7,
Speaker:000.
Speaker:And then the catch up contributions are like the catch up contributions
Speaker:are that instead of it being 23 or 25 or sorry, whatever you just said,
Speaker:you can do an additional five to it.
Speaker:So you can do 28.
Speaker:And again, I don't know what the requirements are for this year.
Speaker:I'd need
Speaker:it's seven and a half this year.
Speaker:So 7, 500 is the catch up for 401ks.
Speaker:And then 1, 000 is for IRAs.
Speaker:So you'd be able to put up to 8, 000 into those once you hit 50 or older.
Speaker:You can't do it beforehand.
Speaker:Can I borrow your husband to go to the bank with me?
Speaker:Yes.
Speaker:Oh my gosh.
Speaker:Yes.
Speaker:Yes.
Speaker:Yes.
Speaker:Yes.
Speaker:Yes.
Speaker:Like my seeing eye dog.
Speaker:Yes.
Speaker:When I need help.
Speaker:Absolutely.
Speaker:So this is one of the things too that, like I said I can help our clients figure
Speaker:out how much money they can put in.
Speaker:I really don't want to help figure out what kind because that's not my skill set.
Speaker:That's not my expertise.
Speaker:So when Alex has come home and been like, Hey, we're going to
Speaker:set up this retirement plan.
Speaker:What do you want?
Speaker:And I'm like, please, just you pick.
Speaker:I do not.
Speaker:I don't, I, I trust you.
Speaker:You know what you're doing?
Speaker:Yeah.
Speaker:I that's you got it.
Speaker:I support it.
Speaker:You got it.
Speaker:Just tell me what money to put where and we, I'll figure out how much
Speaker:money we can pull from the business.
Speaker:You just tell me where it's going.
Speaker:Yeah.
Speaker:Cause that's one of the things that, you it's as the
Speaker:bookkeeper, that's not my area.
Speaker:And that was, that wasn't anything that was my background before.
Speaker:So for the types of investments, that's where you want someone like,
Speaker:like Alex was, because he's not going to do that for our clients now.
Speaker:If it's not a service.
Speaker:That was my next question.
Speaker:I don't, so there's a lot of regulations around this.
Speaker:So this isn't something that likeKnow Your Worth would ever offer.
Speaker:We can offer some insight and some guidance, but you have to be certified
Speaker:to make trades and for testing.
Speaker:And Alex still has a lot of the certifications that he had, so
Speaker:he can give recommendations.
Speaker:But I think it's also you need to be under a protected entity to be able to
Speaker:say, Hey, you should invest your funds here, or this is what you should do.
Speaker:So Alex can give all this information that he's giving now.
Speaker:And way more about this cause Alex was also on the compliance side.
Speaker:So he's probably that's accurate.
Speaker:That's not Sidney.
Speaker:Tell us!
Speaker:I was on that side and there is a lot of compliance wrapped around it.
Speaker:As well as just making sure that recommendations, everything's documented.
Speaker:Obviously, you talk to an advisor or you put anything through on your own.
Speaker:They have a date time stamp, everything like that to make sure.
Speaker:And also the biggest reason why I can get even more complicated is everybody
Speaker:has a different risk tolerance based off of what they want to invest in.
Speaker:And that's a whole nother topic that kind of adds into it.
Speaker:And why finance and like investing can be even another step more confusing.
Speaker:And they just like give it to an advisor to do it because they just, it's a lot
Speaker:to handle because you don't, you have to, are you going to research the fund?
Speaker:Or are you going to go into that detail or are
Speaker:Come on now.
Speaker:see?
Speaker:Yeah, exactly.
Speaker:So there's, and there's how many mutual funds, stocks, bonds,
Speaker:there's all kinds of stuff.
Speaker:You can go down a rabbit hole in and say that you're going to
Speaker:be able to pick the best one.
Speaker:But just with your bookkeepers you want to be able to put it into the
Speaker:Utilize your trusted professionals.
Speaker:The job, you need a professional that is, they do this on a daily, that's the best
Speaker:thing to go ahead and use that service.
Speaker:And most of the time for advisors or CPAs, you're already either paying
Speaker:them or working with them anyways.
Speaker:So it might as well just ask the question.
Speaker:Yeah.
Speaker:I have a question for you just personally, would you ever consider doing this
Speaker:as a consulting like kind of gig or do you like does this light you up?
Speaker:Yeah, I did it for so long.
Speaker:I think I know the ins and outs of it as best as I can at this point.
Speaker:I do enjoy it.
Speaker:And I like the clients that I deal with that and I'm dealing with their investment
Speaker:statements and doing the accounting side of it as well as just trying to
Speaker:use the knowledge from finance for it.
Speaker:But.
Speaker:I think it'd be fun to do and it also has been, it's not the 1st time I've
Speaker:actually been asked that because people would ask me what I did before, and
Speaker:they're like, oh, why don't add that as a consulting piece in addition to it?
Speaker:Yeah, it'd be open to the option, later on as of right now, I do just
Speaker:enjoy talking about it and just giving the information because I think that
Speaker:Super important for everybody to just be informed because that's such a big
Speaker:piece of your life that you're trying to put away for, whatever you can.
Speaker:And some people, they start late, they start early.
Speaker:It's just, I just like to help people in any way that I can.
Speaker:I just think that's a topic that I don't think a lot of people like to talk about.
Speaker:Yeah.
Speaker:And I just think you're so personable when you make, you're like Sid,
Speaker:like you make a very uncomfortable, sweaty topic, like not scary.
Speaker:So I just feel like if you have that skill, why not spread it around?
Speaker:Yeah, I try my best to explain it in the best way possible.
Speaker:Yeah, no, that was super helpful.
Speaker:And obviously I have a million followup questions for you when I stuff you in
Speaker:my truck and take you to Wells Fargo.
Speaker:I will say, and to break it down even more you can go I would, anytime that you
Speaker:guys want to have me back, I'd love to be able to go into each of those accounts.
Speaker:Yeah, tomorrow I'm in for it.
Speaker:I'm in for it.
Speaker:But I'd like to be able to actually explain each individual account because
Speaker:they do have, certain guidelines, rules, different stipulations, what's best
Speaker:for each type of employee or employer.
Speaker:Because, for example, we didn't even talk about, like, why would an
Speaker:employer want to have certain kind of.
Speaker:Yeah.
Speaker:because they might want to use it as a tax deduction for the company as well
Speaker:as for the employee using tax deduction.
Speaker:So
Speaker:Absolutely.
Speaker:It's one of the big goals for Know Your Worth this year is to start
Speaker:our retirement plan for all of our employees and future employees.
Speaker:And I know we could just go on and on about it, but I think we
Speaker:digest this part.
Speaker:Yeah.
Speaker:Absolutely.
Speaker:What people want.
Speaker:Yeah.
Speaker:So
Speaker:as a little recap for it.
Speaker:We learned a lot about all the different accounts that there are.
Speaker:If you are looking to get started in this, like right away today, financial
Speaker:advisors are all over the place.
Speaker:They're everywhere.
Speaker:There are so many financial advisors.
Speaker:Not all financial advisors are created equal.
Speaker:Just not all bookkeepers are just like not all tax accountants are not all
Speaker:real estate agents, not all lawyers.
Speaker:It's again, it's another trusted professional that you want to make
Speaker:sure you mesh with and vibe with and whatever capacity is important to you.
Speaker:So I would absolutely recommend seeking out.
Speaker:A financial advisor that you can get as a referral that you can find yourself.
Speaker:You can start Googling, looking around, honestly, just look at billboards
Speaker:when you're driving down the road.
Speaker:There are a lot.
Speaker:Make sure that you're doing your due diligence and just what feels right.
Speaker:And from there.
Speaker:Your personal financial situation more than most people do.
Speaker:I'd recommend getting your situation as much in order as you possibly can.
Speaker:So take a look at what your extra income is every month that you can
Speaker:contribute to retirement planning.
Speaker:What are your retirement goals?
Speaker:When do you want to retire?
Speaker:How much savings do you want to have?
Speaker:And your advisor will help you with a lot of this, but the main piece
Speaker:and Alex, you can touch on this.
Speaker:We'll wrap up pretty quickly.
Speaker:Then after that is your financial advisor needs to know
Speaker:what you plan on contributing.
Speaker:They can, you can give them your goals.
Speaker:They can tell you how much you're going to need to contribute to get that goal.
Speaker:So if you can't get to it right now, what can you get to?
Speaker:And then they can try to help you get to that next level, but try to clean
Speaker:up your personal financial records as much as possible so that when you
Speaker:have that meeting, you know where you're at with like your free cashflow
Speaker:and what some of your goals are.
Speaker:If your business is going to be tied into it, call a bookkeeper.
Speaker:We can get you situated on the business side.
Speaker:Figure out how much income you need to make personally.
Speaker:What do you need to take out of the business?
Speaker:If it's going to be funded by the business, how much can the business
Speaker:afford to just filter into the retirement account, but just start
Speaker:to get like your house in order.
Speaker:So that when you go to meet with these people, you have a little
Speaker:bit of a background, but also.
Speaker:Don't hesitate because of that.
Speaker:It's one of those things that it feels a lot scarier, I think, until
Speaker:you make that first phone call.
Speaker:When you make that first phone call, they say, Oh yeah, let's meet.
Speaker:Let's talk.
Speaker:Okay.
Speaker:Just let me see your W 2.
Speaker:How much are your bills every month?
Speaker:We can go right from there.
Speaker:If it's, Hey, you have your own business and you want the business to fund it.
Speaker:What's your income every month?
Speaker:What are your expenses?
Speaker:It can be very simple.
Speaker:So don't hesitate to just make a phone call.
Speaker:Google.
Speaker:See who you want to talk to and take that first step forward.
Speaker:And if Know Your Worth can help you on the business side, let us know.
Speaker:Yeah.
Speaker:Alex, do you have people that you would recommend?
Speaker:Like you don't have to say their names right now, but if somebody
Speaker:called Know Your Worth and was like, I heard your episode.
Speaker:Do you have someone that you can recommend me talk to?
Speaker:Do you have a list of people?
Speaker:Yes, I actually do.
Speaker:And.
Speaker:Honestly, a couple of across different platforms, because some
Speaker:people might not want to work with a specific company or might not
Speaker:want to work with a certain topic.
Speaker:And it varies again, based off of the company.
Speaker:Yeah, I would have a handful that I could definitely recommend, or at least
Speaker:point people in the right direction, just based off of people that I've
Speaker:dealt with in my career and also people that I've come in contact with.
Speaker:So if you guys want to email info at know, you're worth pgh.
Speaker:com and just put like retirement referral partners, we'll forward it
Speaker:over to Alex and he can hook you up.
Speaker:Absolutely.
Speaker:Yeah.
Speaker:Thanks Alex.
Speaker:That was really helpful.
Speaker:Good episode.
Speaker:All right.
Speaker:And our first, wait, we have to start like establishing questions when we
Speaker:have guests on, because I feel like we have to have the same, question.
Speaker:What's your favorite
Speaker:like an icebreaker.
Speaker:We did at the end most of our guests are gonna be, for the most part
Speaker:business owners, we'll probably have some that aren't business owners.
Speaker:Yeah.
Speaker:But Alex is also an owner of the Maverick, the coworking space in
Speaker:which we are working out of, and also North Hills Golf Academy.
Speaker:. So one of the questions and we'll just leave it at that 'cause I'm
Speaker:sure we're gonna have you on for more, but Alex, what's your favorite
Speaker:part of being a business owner?
Speaker:I just love being able to be in control of being able to grow what you want
Speaker:in your own company and kind of mold it into what you're looking for out
Speaker:of your life and try to fit it in.
Speaker:Plus, doesn't mean that owning businesses aren't stressful and it's
Speaker:going to be really easy if you have your own business, but, at the end of the
Speaker:day, you're doing it or yeah, exactly,
Speaker:Yeah, you guys sleep more than anyone I know.
Speaker:Not.
Speaker:but the end of the day, it's, I love being able to work for myself and working, also
Speaker:alongside a wife and also Kristen as well.
Speaker:So it's really fun.
Speaker:But obviously again, on top of that is, your flexibility piece, but I.
Speaker:Feel like I'm probably one that doesn't do that as much.
Speaker:And also I feel like, if I want to work later, if you want to work later, anything
Speaker:like that, I feel like that's the best part about being able to own your own
Speaker:businesses, the work that you put in directly comes back to you is, would be
Speaker:And then you can invest it in your retirement account.
Speaker:yeah, exactly.
Speaker:can.
Speaker:Alright.
Speaker:Thanks, Alex.
Speaker:for coming on and happy 23rd episode for Know Your Worth.
Speaker:Alright,
Speaker:Thank you for having me.
Speaker:I appreciate it.
Speaker:And I hopefully get, get invited back again.
Speaker:We'll see.
Speaker:We'll see.
Speaker:I'm kidding, seriously.
Speaker:You made the cut, for sure.
Speaker:Good job.
Speaker:Alright, Have a great rest of your day, everyone.
