WEBVTT - Positively Gam: Money Talks w/ Bola Sokunbi 0:00:10.000 --> 0:00:13.640 What's up, everybody. I'm Gammy and this is positively gamed. 0:00:14.200 --> 0:00:17.680 Last season, I did an episode on retirement. This time, 0:00:17.720 --> 0:00:20.639 I want to focus on how to say for your retirement, 0:00:20.960 --> 0:00:23.160 because I really don't think I did that all that well. 0:00:23.600 --> 0:00:26.279 I'm excited to have a financial expert join me on 0:00:26.320 --> 0:00:30.400 today's episode, so let's get into it. BOWLISHA Coombe is 0:00:30.440 --> 0:00:36.960 a certified financial education instructor, finance expert, best selling author, speaker, 0:00:37.040 --> 0:00:41.760 and founder of Clever Girl Finance, a financial education platform 0:00:41.840 --> 0:00:46.040 and community for women, empowering them to achieve financial wellness 0:00:46.320 --> 0:00:50.360 and live life on their own terms. Hi Bolo, welcome. 0:00:50.800 --> 0:00:53.240 Thank you for having me. I'm so excited to be here. 0:00:53.800 --> 0:00:56.360 I'm at the age where a lot of my friends 0:00:56.480 --> 0:01:00.400 are retired or starting to retire, and we're constantly talking 0:01:00.440 --> 0:01:04.520 about how we wish we knew to save earlier in retirement, 0:01:04.560 --> 0:01:07.080 and I definitely did not do that. And I think 0:01:07.120 --> 0:01:10.040 it's really difficult for people a lot of times because 0:01:10.080 --> 0:01:14.280 we get so overwhelmed with just making it day to day, 0:01:14.840 --> 0:01:18.120 you know, making sure you have enough funds to pay 0:01:18.160 --> 0:01:21.040 the bills, and then you know you're trying to set 0:01:21.080 --> 0:01:24.360 aside funds for you know to be able to enjoy 0:01:24.440 --> 0:01:27.360 some vacation. And I think when you're young, you just 0:01:27.520 --> 0:01:32.080 don't think about retirement. It seems like it's so far away. Yes, 0:01:32.319 --> 0:01:37.240 So when should people start saving for retirement? Well, the 0:01:37.280 --> 0:01:40.440 best time to start saving for retirement is pretty much today, 0:01:40.480 --> 0:01:42.720 as soon as you can, right, and this is because 0:01:42.880 --> 0:01:45.800 of the power of time and your ability to take 0:01:45.800 --> 0:01:50.200 advantage of compounding, appreciation and dividends. However, even if you 0:01:50.200 --> 0:01:52.520 are starting late, it's important to keep in mind that 0:01:52.600 --> 0:01:55.559 retirement is not a day. So the average retirement lasts 0:01:55.600 --> 0:01:58.040 about twenty to twenty five years, and most people don't 0:01:58.120 --> 0:02:00.920 get to the statured retirement age of age sixty five 0:02:01.000 --> 0:02:04.800 and just stop working. Many people take on second careers, 0:02:04.880 --> 0:02:07.600 take on part time jobs, etcetera. So there is the 0:02:07.600 --> 0:02:10.560 opportunity that if you're starting late with saving for retirement, 0:02:10.600 --> 0:02:13.520 that you can also take advantage of catch up opportunities 0:02:13.520 --> 0:02:17.160 with things like the i R a UH, the Individual 0:02:17.200 --> 0:02:20.720 Retirement Account where for two you can contribute up to 0:02:21.000 --> 0:02:23.639 six thousand dollars, but if you're over fifty you can 0:02:23.639 --> 0:02:27.120 contribute seven thousand dollars, and then also catch up savings 0:02:27.160 --> 0:02:29.880 with things like the four one K four, three, b 0:02:30.080 --> 0:02:33.320 et cetera. Where you can save an extra I believe 0:02:33.760 --> 0:02:36.720 sixty dollars if you're over the age of fifty. So 0:02:36.720 --> 0:02:39.080 there are opportunities for you to catch up. But while 0:02:39.120 --> 0:02:41.680 you're young, the best time to start saving for retirement 0:02:41.800 --> 0:02:44.919 is right now. So is that like as soon as 0:02:44.960 --> 0:02:48.000 you start working. Yeah, so as soon as you get 0:02:48.040 --> 0:02:50.800 that first paycheck, you know, and you lay out your budget, 0:02:50.960 --> 0:02:53.000 one of your goals should be to think about your 0:02:53.040 --> 0:02:55.920 future self and put a small percentage aside. Right, the 0:02:55.960 --> 0:02:59.040 more time you have, the less amount of money you 0:02:59.120 --> 0:03:01.919 need to save, because over the long term, that money 0:03:01.919 --> 0:03:06.440 will compound and appreciate and gain dividends as that investment growth. 0:03:06.440 --> 0:03:08.960 So you know, while you're young, you get your first job, 0:03:09.240 --> 0:03:14.240 start saving. Okay, So as an older person, let's say 0:03:14.280 --> 0:03:20.240 in your fifties, right, how much what percentage of your 0:03:20.560 --> 0:03:24.680 salary would you be needing to put aside compared to 0:03:25.400 --> 0:03:28.320 you know, a young person who's just starting out. It 0:03:28.360 --> 0:03:31.359 really depends. I would say that for an older person, 0:03:31.440 --> 0:03:34.320 you definitely want to take advantage of those catch up savings. 0:03:34.360 --> 0:03:36.640 So with the I R, like I mentioned, there's that 0:03:36.760 --> 0:03:39.320 extra thousand dollars you can save with the four one k, 0:03:39.560 --> 0:03:43.000 four three four seven bees, there as the extra six 0:03:44.000 --> 0:03:47.160 you can save, and then whatever else you have to spare. 0:03:47.280 --> 0:03:50.160 After you have met your day to day obligations your 0:03:50.200 --> 0:03:53.040 other shorter term goals, you can think about putting that 0:03:53.120 --> 0:03:56.160 towards retirements. It's important to keep in mind that you 0:03:56.520 --> 0:03:58.880 when it comes to retirement savings. Right when you get 0:03:58.920 --> 0:04:01.839 to your retirement age that you decide to retire, you're 0:04:01.880 --> 0:04:04.840 not going to cash out your entire retirement portfolio in 0:04:04.880 --> 0:04:07.520 that one day. Ideally, what you're gonna be doing is 0:04:07.560 --> 0:04:10.760 taking out a certain amount every year, which means that 0:04:10.800 --> 0:04:13.560 you still have a chunk of money that can continue 0:04:13.560 --> 0:04:16.840 to grow for you even during retirement. So you want 0:04:16.880 --> 0:04:19.600 to think about taking advantage of those catch up savings 0:04:19.839 --> 0:04:23.559 and then contributing whatever else you have extra towards saving 0:04:23.600 --> 0:04:25.839 for retirement. I guess I was thinking more of a 0:04:25.920 --> 0:04:32.240 percentage like of your salaries should put aside, compared to 0:04:32.279 --> 0:04:35.039 a younger person who may only need to put maybe 0:04:35.240 --> 0:04:39.080 five percent, like I don't know. Yeah, So it's kind 0:04:39.080 --> 0:04:40.880 of hard to say because it really depends on the 0:04:40.920 --> 0:04:44.280 person's financial obligations. The rule of thumb is that you 0:04:44.279 --> 0:04:48.920 should put aside ten of your income. That's the general 0:04:49.279 --> 0:04:51.560 rule of them. But if you're trying to catch up, 0:04:51.600 --> 0:04:55.880 then it all depends on your obligations. In terms of housing. 0:04:56.000 --> 0:04:57.920 You know how much you're paying for housing, how much 0:04:57.920 --> 0:04:59.920 you're paying for your other financial obligations. But a rule 0:05:00.120 --> 0:05:02.640 thumbs ten percent, and then if you are trying to 0:05:02.720 --> 0:05:05.920 catch up or more, if you can fit it into 0:05:05.960 --> 0:05:08.440 your budget. So what are some of the most common 0:05:08.520 --> 0:05:11.599 challenges when it comes to saving for retirement? The bills 0:05:11.640 --> 0:05:15.360 that you had, your daily expenses, are those kinds of 0:05:15.400 --> 0:05:17.919 things that kind of get in the way of saving 0:05:17.960 --> 0:05:21.600 for retirement. Absolutely so, a lot of people worry about 0:05:21.760 --> 0:05:25.160 just not having enough in their paycheck to save for retirement. 0:05:25.720 --> 0:05:28.080 A lot of people worry about the fact that or 0:05:28.120 --> 0:05:29.840 they kind of give up a little bit if they 0:05:29.880 --> 0:05:32.280 didn't start early enough and they're like, Okay, what's the point, 0:05:32.320 --> 0:05:34.760 I'm not going to be able to save much? And 0:05:34.760 --> 0:05:37.320 then a lot of people worry about not having enough 0:05:37.400 --> 0:05:40.160 when they get to retirement, even though they're saving right now. 0:05:40.560 --> 0:05:41.919 A lot of you know, a lot of what I 0:05:41.960 --> 0:05:44.479 see is people worrying about how do I make get 0:05:44.560 --> 0:05:47.280 spare money within my existing budget to put aside for 0:05:47.400 --> 0:05:50.160 my future self when life is happening to me right now. 0:05:50.720 --> 0:05:53.960 And how can people leverage an I RA or four 0:05:53.960 --> 0:05:57.440 oh one K for retirement? Basically, you set up an 0:05:57.440 --> 0:06:00.960 account rate you can set up depending on your employment status. 0:06:01.000 --> 0:06:04.040 Your employer may offer you a retirement savings plan that 0:06:04.120 --> 0:06:07.400 you can set up and have automatic peril deductions taken 0:06:07.440 --> 0:06:09.800 out of um your paycheck, or you don't have to 0:06:09.800 --> 0:06:12.000 worry about it. You just set up your percentages. Or 0:06:12.120 --> 0:06:15.160 you can open your own account with a brokerage right 0:06:15.279 --> 0:06:18.479 like a trow Price a Vanguard of Fidelity, for example, 0:06:18.880 --> 0:06:21.880 open your own traditional IRA A savings account and start 0:06:21.920 --> 0:06:24.880 to make contributions that you build into your budget into 0:06:24.920 --> 0:06:35.520 that accountant every time you get paid. Okay, now, what 0:06:35.640 --> 0:06:39.640 about people that don't want to just have their money 0:06:39.760 --> 0:06:42.440 sitting in a bank. What are some other ways that 0:06:42.520 --> 0:06:46.760 you can invest or other ways that you can't get 0:06:46.800 --> 0:06:51.440 a good return on your dollars? Like I somebody who 0:06:51.560 --> 0:06:55.360 never still don't understand stocks and bonds, but I know 0:06:55.520 --> 0:06:59.800 and cryptocurrency. Like that's like speaking Greek to me. What 0:07:00.040 --> 0:07:03.839 can you say that would be helpful in the language 0:07:03.880 --> 0:07:08.479 that we can comprehend about other ways to invest your 0:07:08.520 --> 0:07:12.559 money besides just putting in a bank and IRA. Yeah, 0:07:12.600 --> 0:07:16.040 so when it comes to investing, their variety of different ways. 0:07:16.120 --> 0:07:17.960 But the key thing that you want to keep in 0:07:18.000 --> 0:07:21.560 mind is broad diversification, and that basically means that you 0:07:21.600 --> 0:07:24.400 don't want to put all of your eggs in one basket, 0:07:24.680 --> 0:07:27.320 so you want to diversify. You can invest in stocks, 0:07:27.360 --> 0:07:30.520 which is where you buy, you know, part of a company. 0:07:30.560 --> 0:07:32.760 You become a part owner in a company. You can 0:07:32.800 --> 0:07:37.080 invest in in funds, which is an aggregation of different 0:07:37.080 --> 0:07:40.680 stocks into one fund, where you become a part owner 0:07:40.720 --> 0:07:43.040 of several different companies. So you may hear people talk 0:07:43.040 --> 0:07:45.960 about index funds mutual funds as an example, where they 0:07:45.960 --> 0:07:48.960 could have an arrogate of different types of companies within 0:07:49.000 --> 0:07:52.120 the fund. You can invest in bonds, which are essentially 0:07:52.280 --> 0:07:55.120 an IOU when you make a loan to the government 0:07:55.320 --> 0:07:58.040 or a corporation and in return they pay you interest 0:07:58.400 --> 0:08:00.560 as they pay you back their loan. And of course 0:08:00.600 --> 0:08:04.200 they're the more trendy investments like cryptocurrency n f T s. 0:08:04.240 --> 0:08:07.400 And then another investment is investing in business, whether it's 0:08:07.440 --> 0:08:11.080 your own business or somebody else's small business. The key 0:08:11.160 --> 0:08:15.160 there is diversification, understanding your risk tolerance, what's gonna cause 0:08:15.160 --> 0:08:17.640 you not to sleep well at night, and make sure 0:08:17.680 --> 0:08:20.160 you do your research. And I know a lot of 0:08:20.160 --> 0:08:23.360 people feel comfortable keeping their money in bank accounts, but 0:08:23.440 --> 0:08:25.720 really you want to put your money to work for you. 0:08:25.720 --> 0:08:28.840 And in the bank account. It's great for short term savings, 0:08:29.160 --> 0:08:33.440 it's great for emergency savings, but inflation eats away at 0:08:33.520 --> 0:08:35.880 your savings in the bank account. Right So, prior to 0:08:35.920 --> 0:08:38.480 the pandemic, the average inflation rate in the US was 0:08:38.480 --> 0:08:40.640 about two and a half percent, and I recently read 0:08:40.679 --> 0:08:43.240 an article that says as a result of the pandemic, 0:08:43.480 --> 0:08:46.160 inflation is about six to six and a half percent 0:08:46.240 --> 0:08:48.880 right now. And think about the interest rates that banks 0:08:48.880 --> 0:08:51.560 are giving you all less than one percent right now. 0:08:51.760 --> 0:08:54.080 The longer you have that money there when you think 0:08:54.160 --> 0:08:57.480 long term, the less it's worth. So anything that you 0:08:57.520 --> 0:09:00.720 need your thinking about investing for the future, your long term, 0:09:01.120 --> 0:09:05.520 you want to put it to work for you. So stocks, funds, bonds, business, 0:09:05.920 --> 0:09:09.080 real estate. That's another great way to invest and realistic. 0:09:09.160 --> 0:09:12.719 It's not just about renting property. You could buy farmland, 0:09:12.760 --> 0:09:15.800 you could buy into our resorts, you could buy into 0:09:15.840 --> 0:09:18.640 commercial property. You could buy into car washes. There's all 0:09:18.720 --> 0:09:22.480 kinds of real estate diversification ongoing. And then as you 0:09:22.520 --> 0:09:26.120 said about crypto, you know, it's new, it's highly volatile 0:09:26.280 --> 0:09:28.439 when it comes to investing in crypto n f T S. 0:09:28.559 --> 0:09:31.560 If you struggle with sleeping at night and you can't 0:09:31.600 --> 0:09:36.360 afford to lose it, that's it. I think that's really 0:09:36.800 --> 0:09:40.880 important for people over fifty to consider, like really be 0:09:41.200 --> 0:09:43.160 I do know that much like you have to be 0:09:43.280 --> 0:09:48.160 careful with what you decide to invest in because we 0:09:48.240 --> 0:09:51.120 can't afford to be that risky. So we want to 0:09:51.120 --> 0:09:54.240 be careful with the decisions that we make on what 0:09:54.280 --> 0:09:57.040 we and how we're going to invest our money. Where 0:09:57.040 --> 0:09:59.640 As a younger person, you know, they have a little 0:09:59.640 --> 0:10:01.800 bit more time and they may be a little bit 0:10:01.840 --> 0:10:12.240 more willing to take those risks. You were talking about 0:10:12.600 --> 0:10:17.000 investing in real estate and farmland, and you know, I 0:10:17.080 --> 0:10:19.120 just want to say that, you know, there there are 0:10:19.160 --> 0:10:24.040 a lot of young people that are working and coming 0:10:24.160 --> 0:10:29.560 into large amounts of money right and it's exciting and 0:10:29.600 --> 0:10:32.880 it feels good and you want to kind of splurge 0:10:33.000 --> 0:10:37.360 and take advantage of luxury items and all of that. 0:10:37.400 --> 0:10:39.600 But I feel like there's a lot of young people 0:10:39.600 --> 0:10:42.160 out here that are really doing well for themselves, and 0:10:42.200 --> 0:10:46.320 I just hope that they're getting the proper financial counsel 0:10:46.559 --> 0:10:49.760 because we have to provide for ourselves, We have to 0:10:49.800 --> 0:10:53.560 provide for our communities, and you know, we have to 0:10:53.640 --> 0:10:56.960 take on that challenge and responsibility for ourselves. We can't 0:10:56.960 --> 0:10:59.800 always be looking for somebody else to give us something. 0:10:59.880 --> 0:11:04.280 And creating your own business. Real estate, there was an 0:11:04.360 --> 0:11:06.840 article not too long ago where people and it was 0:11:06.880 --> 0:11:11.160 being highlighted in social media where people were buying farmland 0:11:11.160 --> 0:11:14.840 because land is money. Real estate is money, you know, 0:11:14.960 --> 0:11:19.920 and those are investments exactly. Those are investments for the future, 0:11:19.960 --> 0:11:23.240 investments for your children. So we gotta kind of get 0:11:23.320 --> 0:11:26.560 past the fancy cars and the diamonds, you know what 0:11:26.600 --> 0:11:28.640 I mean. I couldn't agree with you more. I'm a 0:11:28.640 --> 0:11:32.000 firm believer of building wealth, prioritizing. You can have the 0:11:32.080 --> 0:11:34.280 nice things. You can have the fancy cars, you can 0:11:34.320 --> 0:11:37.319 have the jewelry, but you want to prioritize building wealth, 0:11:37.320 --> 0:11:40.280 and not just building wealth for yourself, but also passing 0:11:40.320 --> 0:11:43.840 on the knowledge that you gain in your community, in 0:11:43.920 --> 0:11:47.280 your family, and teaching your children the value of a 0:11:47.360 --> 0:11:50.640 dollar before you just hand them the dollar. That's where 0:11:50.679 --> 0:11:55.600 that generational wealth building begins, instilling the values and understanding 0:11:55.600 --> 0:11:57.760 the value of a dollar. You don't have to have 0:11:57.800 --> 0:12:01.640 a million dollars to transition generational wealth, transition generational knowledge 0:12:01.880 --> 0:12:05.760 to start building that generational wall. Yeah, and you were 0:12:05.800 --> 0:12:09.800 also talking about investing in business, like, for example, if 0:12:09.840 --> 0:12:12.520 there's a baker who wants to own their own shop 0:12:12.640 --> 0:12:16.560 later in life, or like I really love skating and 0:12:16.640 --> 0:12:19.240 I wanted to buy a skating make and my husband 0:12:19.280 --> 0:12:22.400 was like, that is the most ridiculous thing I've ever heard, 0:12:22.400 --> 0:12:28.920 and we're not doing that, but it would have been fun. 0:12:28.960 --> 0:12:31.440 But he didn't really see that, and he was probably right. 0:12:31.559 --> 0:12:34.679 He didn't see that as an investment is something that 0:12:34.840 --> 0:12:39.559 was going to financially benefit us. And so that's the 0:12:39.880 --> 0:12:41.800 Those are the kinds of things that you have to 0:12:41.840 --> 0:12:46.560 think about when you're investing in a business. Am I right? Yes, 0:12:46.640 --> 0:12:49.720 you are right. So when you're investing in business, first 0:12:49.720 --> 0:12:51.480 of all, you have to make sure the numbers work 0:12:51.559 --> 0:12:53.120 for you have to, you know, you can't just be 0:12:53.200 --> 0:12:56.160 I want to buy a bakery, What does the bakery? 0:12:56.200 --> 0:12:58.160 What's it gonna earn? You want average? How much money 0:12:58.160 --> 0:12:59.480 do you have to put into start it up? And 0:12:59.520 --> 0:13:01.559 how much mon need you estimate you're gonna get from 0:13:01.559 --> 0:13:03.600 this bakery every month. You're gonna need to know your 0:13:03.679 --> 0:13:06.640 numbers so you can get some clarity and before you 0:13:06.760 --> 0:13:09.520 kind of go into delve into this business full time, 0:13:09.559 --> 0:13:10.760 you also want to make sure that you have a 0:13:10.800 --> 0:13:13.880 backup plan for yourself right start to save money. Put 0:13:13.920 --> 0:13:16.839 money aside for your emergencies. Put money aside to cover 0:13:16.920 --> 0:13:18.719 your day to day bill so that when you put 0:13:18.760 --> 0:13:21.720 your full focus on that business, you have a window 0:13:21.760 --> 0:13:24.920 of time, a buffer where your bills are taken care 0:13:24.960 --> 0:13:27.240 of while you focus your energy and getting your business 0:13:27.240 --> 0:13:30.280 on its feet and getting it to start generating income. 0:13:30.880 --> 0:13:33.200 Another really important thing about owning a business is that 0:13:33.360 --> 0:13:35.600 just like you have emergency savings or you should have 0:13:35.640 --> 0:13:38.480 emergency savings for your personal life in case life happens, 0:13:38.880 --> 0:13:42.120 you also want to start. Once your business starts making money, 0:13:42.160 --> 0:13:45.840 a percentage of your profits ten start putting it aside 0:13:45.880 --> 0:13:49.160 to create a buffer for your business. Because every business 0:13:49.200 --> 0:13:51.559 has a slow season. You want to meet payroll, You 0:13:51.600 --> 0:13:53.240 want to be able to make your products and services. 0:13:53.240 --> 0:13:55.000 You want to continue to market your business so that 0:13:55.080 --> 0:13:57.959 way you've built this buffer of cash that when things 0:13:58.000 --> 0:14:01.000 get slow you can tap into of it. Especially you know, 0:14:01.040 --> 0:14:04.199 when you think about happening to the pandemic and black 0:14:04.320 --> 0:14:08.400 and brown communities being locked out of the PPE loan option, 0:14:08.640 --> 0:14:11.520 there was no fallback. Lin. So I'm a huge advocate 0:14:11.559 --> 0:14:14.559 of businesses having you know, buffer is the same way 0:14:14.559 --> 0:14:24.440 you create a buffer in your own personal life. I 0:14:24.480 --> 0:14:26.600 want to speak a little bit because I have a 0:14:26.600 --> 0:14:31.280 lot of friends who are um have job opportunities now, 0:14:31.440 --> 0:14:36.160 like with contract work and freelance work or part time 0:14:36.240 --> 0:14:42.800 work that is bringing in extra dollars. And also speak 0:14:42.840 --> 0:14:48.000 about entrepreneurship because there's so many entrepreneurs out here, so 0:14:48.120 --> 0:14:52.200 they don't have access to for a one K that's matching, 0:14:52.600 --> 0:14:55.440 you know, the money that they may be setting aside 0:14:55.480 --> 0:14:59.480 for themselves, what do they how do they invest or 0:14:59.520 --> 0:15:05.600 how do they manage those dollars that there those extra 0:15:05.640 --> 0:15:08.840 dollars that they're making. It might be as small as 0:15:09.240 --> 0:15:12.960 three hundred extra dollars a month and they decide, oh, well, 0:15:13.040 --> 0:15:15.040 I'm just going this is just my play money. So 0:15:15.120 --> 0:15:18.240 you have people that that are just have that kind 0:15:18.320 --> 0:15:22.280 of extra money, or people that are making thousands of 0:15:22.360 --> 0:15:25.640 dollars because some of these contracts, some of this contract 0:15:25.680 --> 0:15:30.320 work is particularly in healthcare, they're making really good dollars, 0:15:31.120 --> 0:15:34.960 and so how do you manage that money properly so 0:15:35.000 --> 0:15:37.800 that you really are saving the way you think you 0:15:37.880 --> 0:15:40.280 want to? Because it I mean, I think if I 0:15:40.320 --> 0:15:42.240 was bringing home that much money, it would be I 0:15:42.240 --> 0:15:45.240 would be like whoa you know, and it would be 0:15:45.280 --> 0:15:47.840 difficult for me to just say, Okay, now you're doing 0:15:47.880 --> 0:15:51.280 this for a reason. You're doing this to help plan 0:15:51.440 --> 0:15:54.960 for your retirement. What is the best way to handle 0:15:55.080 --> 0:15:58.720 those extra dollars? This is a great question I want 0:15:58.760 --> 0:16:01.400 to get asked for very often. So the first thing 0:16:01.440 --> 0:16:04.000 you want to do as you're making money each paycheck, 0:16:04.120 --> 0:16:06.560 especially if your contract based is you want to set 0:16:06.640 --> 0:16:10.120 money aside to pay your taxes, because come end of 0:16:10.160 --> 0:16:13.120 the year, you're gonna get that tax bill from Uncle Sam. 0:16:13.280 --> 0:16:16.040 And Uncle Sam doesn't play when it comes to his money. 0:16:16.080 --> 0:16:20.240 So about that income should be put aside separate account 0:16:20.320 --> 0:16:22.880 to cover your tax obligation. If at the end of 0:16:22.880 --> 0:16:25.920 the year you don't owe that much in taxes, that's great. 0:16:25.920 --> 0:16:28.080 You have extra money to save to invest to pursue 0:16:28.120 --> 0:16:30.440 your goals. The second thing you want to do is 0:16:30.480 --> 0:16:33.200 to create a budget. And a lot of times when 0:16:33.240 --> 0:16:36.640 people are working on contract basis, they have an inconsistent 0:16:36.720 --> 0:16:40.200 income and so they have low income paid low windows 0:16:40.240 --> 0:16:43.040 of income and high income high windows of income. And 0:16:43.080 --> 0:16:45.120 you want to determine what is your average what are 0:16:45.160 --> 0:16:48.080 your average expenses that you have to pay for every month, 0:16:48.160 --> 0:16:50.880 and know that once you have that high window of income, 0:16:50.880 --> 0:16:53.080 you're gonna put money aside to be able to cover 0:16:53.160 --> 0:16:56.480 those monthly expenses when you have that low period of income. 0:16:56.520 --> 0:16:58.640 So you want to know what your average expenses are 0:16:58.920 --> 0:17:01.960 and create that ash buffer to cover yourself when your 0:17:02.000 --> 0:17:04.080 income is lower. The next thing you want to do 0:17:04.280 --> 0:17:07.960 is say for retirement. And there are several options that 0:17:08.000 --> 0:17:11.160 have tax deferred benefits, meaning you don't pay taxes now 0:17:11.560 --> 0:17:14.000 on that money, and your money has the opportunity to 0:17:14.040 --> 0:17:17.400 grow tax free into the future, and you can say 0:17:17.480 --> 0:17:20.080 for retirement and they're actually really great plans. So the 0:17:20.119 --> 0:17:22.840 one we all know about is the individual Retirement account 0:17:22.880 --> 0:17:25.119 the IRA, and you can open one of those at 0:17:25.119 --> 0:17:27.040 a brokerage. It allows you to save up to six 0:17:27.080 --> 0:17:31.120 thousand dollars. However, depending on how you have structured your 0:17:31.160 --> 0:17:34.720 business or your freelancing work or your contracting work. There 0:17:34.720 --> 0:17:37.280 are other investment options like the s c P I 0:17:37.480 --> 0:17:40.320 RA or the simple I RA or the self Employed 0:17:40.359 --> 0:17:43.800 for one K that are specific for business owners and 0:17:43.840 --> 0:17:46.720 self employed individuals where you can save more money. So, 0:17:47.080 --> 0:17:50.160 for example, with the step I ra UM you can 0:17:50.200 --> 0:17:53.120 contribute up to twenty of your up to a maximum 0:17:53.160 --> 0:17:57.160 of I believe sixty one thousand dollars every year into 0:17:57.200 --> 0:18:00.440 a retirement account tax deferred, and if you have inmployees 0:18:00.480 --> 0:18:02.600 you would have to contribute to that for them as well. 0:18:02.720 --> 0:18:05.360 A Simple i R is for business owners who have 0:18:05.840 --> 0:18:09.639 less than a hundred employees, where you can also contribute 0:18:09.680 --> 0:18:13.399 up to fourteen thousand dollars in two right, and a 0:18:13.480 --> 0:18:16.520 self employed foreign K is specific to individuals who are 0:18:16.640 --> 0:18:20.080 self employed with no employees other than their spouse and 0:18:20.160 --> 0:18:23.919 they can also contribute up to twenty dollars tax deferred 0:18:23.920 --> 0:18:27.760 in So there are options for you to save for retirement. 0:18:27.800 --> 0:18:31.159 As a business owner, entrepreneur or self employed person. You 0:18:31.200 --> 0:18:34.439 want to make sure that you understand the eligibility requirements 0:18:34.440 --> 0:18:36.159 and you can simply do that on the I r 0:18:36.240 --> 0:18:39.000 S website or talk to an accountant. But don't think 0:18:39.040 --> 0:18:41.199 that because you don't have an employer offering you a 0:18:41.240 --> 0:18:44.240 form on K that you cannot save. You absolutely can, 0:18:44.640 --> 0:18:47.440 and you can actually save more on average than someone 0:18:47.480 --> 0:18:51.280 who's employed by a company. You know this. Even listening 0:18:51.320 --> 0:18:55.480 to you, Bola, I'm still overwhelmed. I'm still really overwhelmed 0:18:55.520 --> 0:18:58.239 because it is so much information, and I'm feeling like, 0:18:58.840 --> 0:19:04.440 is it worth investing in a financial advisor to help 0:19:04.520 --> 0:19:07.200 you kind of figure all of this out? Because I'm 0:19:07.240 --> 0:19:09.760 just listening to you, I'm I'm still like, yes, I 0:19:09.760 --> 0:19:12.680 always tell people, you know, it's always when we talk finances, 0:19:12.680 --> 0:19:15.840 there's always a lot of information. But pick one place, right, 0:19:15.880 --> 0:19:18.479 and it could be starting with a financial advisor. And 0:19:18.520 --> 0:19:21.200 if you're someone who is overwhelmed by all the different 0:19:21.200 --> 0:19:23.840 plans and terms and you're not sure where to start, 0:19:23.880 --> 0:19:27.040 a financial advisor financial planner is a great place to 0:19:27.080 --> 0:19:30.000 get help with managing your finances, get that professional guidance. 0:19:30.040 --> 0:19:32.600 But it's important to remember that this is a relationship, right, 0:19:32.880 --> 0:19:35.280 So you have to be clear on your goals. What 0:19:35.359 --> 0:19:37.800 do you want to accomplish with your money. You have 0:19:37.880 --> 0:19:40.560 to be clear on your risk tolerance, right. The financial 0:19:40.560 --> 0:19:43.360 advisor cannot read your mind, and you want to make 0:19:43.359 --> 0:19:46.359 sure that they're creating a plan for your hard earned 0:19:46.400 --> 0:19:48.800 money in a way that it's gonna work for you 0:19:48.880 --> 0:19:50.960 and allow you to sleep well at night. So when 0:19:50.960 --> 0:19:53.600 you're thinking about a financial advisor, you definitely want to 0:19:53.640 --> 0:19:56.159 ask them for their credentials, right, what qualifies you to 0:19:56.240 --> 0:19:59.080 be a financial advisor or financial planner? How do you 0:19:59.160 --> 0:20:02.280 typically best money? And make sure it aligns with your 0:20:02.400 --> 0:20:04.800 risk tolerance? Right? You don't want them taking risks with 0:20:04.880 --> 0:20:07.560 cryptocurrency if that's not what you're interested in doing and 0:20:07.640 --> 0:20:09.800 you don't feel comfortable with that. You want to get 0:20:09.800 --> 0:20:11.959 a sense for their values and their ethics to make 0:20:12.000 --> 0:20:14.200 sure that they are in line with yours and they're 0:20:14.200 --> 0:20:16.240 going to put it be putting your money in investments 0:20:16.240 --> 0:20:18.480 that aligned with you. You also want to get a 0:20:18.480 --> 0:20:20.960 sense of their fee structure. What is it gonna cost you? 0:20:21.040 --> 0:20:23.320 Do they charge you a flat fee, are they going 0:20:23.359 --> 0:20:25.800 to charge you a percentage based on how much you 0:20:25.880 --> 0:20:27.520 invest with them, or are they going to charge you 0:20:27.560 --> 0:20:30.880 based on commission? And ultimately, when it comes to any 0:20:31.000 --> 0:20:34.720 financial advisor financial planner, they should be working in your 0:20:34.760 --> 0:20:38.040 best interests first and not trying to sell your products 0:20:38.040 --> 0:20:41.320 and services ahead of that. So what is the best 0:20:41.320 --> 0:20:45.280 way to even find a financial planner for yourself? Like, 0:20:45.359 --> 0:20:47.840 do you just go to the bank or are you 0:20:47.920 --> 0:20:51.399 asking a friend or you know, how do you find 0:20:51.480 --> 0:20:54.879 that person? Yes, so the most popular way of finding 0:20:54.880 --> 0:20:57.440 a financial planner is through word of mouth from referrals, 0:20:57.480 --> 0:21:00.560 friends and valily because they already trust that person. You 0:21:00.600 --> 0:21:04.040 can certainly walk into your financial establishment and asked to 0:21:04.080 --> 0:21:07.080 be paired with one, or you can visit a CFP 0:21:07.240 --> 0:21:11.400 dot net, the certified financial Planning board that can assign 0:21:11.440 --> 0:21:15.080 you or showcase to you financial planners in your area. 0:21:15.560 --> 0:21:19.119 But again, it's a relationship, right. This person is handling 0:21:19.440 --> 0:21:21.840 your hard earned money. You work really hard for it, 0:21:21.880 --> 0:21:25.120 so you can ask them questions, you can do research 0:21:25.160 --> 0:21:27.719 on this person. You can take your time getting to 0:21:27.760 --> 0:21:31.000 know them before you hand over your money, because you 0:21:31.080 --> 0:21:33.639 want to feel comfortable with this person who's going to 0:21:33.720 --> 0:21:43.959 be handling your money for you. Okay, let's talk a 0:21:44.119 --> 0:21:48.359 little bit about social security because I feel like people 0:21:48.760 --> 0:21:51.480 don't feel like they can live off the social security anymore. 0:21:51.520 --> 0:21:53.240 I guess back in the day they could, but the 0:21:53.280 --> 0:21:56.119 cost of living now is so high. First of all, 0:21:56.200 --> 0:21:59.960 let me say this, most of my friends and family 0:22:00.760 --> 0:22:04.280