Speaker 1: It's time for the big a qa A to b
Speaker 1: a qa what you say, the b a qa no
Speaker 1: man day, but the b a Q eight with Tiffany,
Speaker 1: the Big a Q eight with Tiffany. Hey. So Mandy's
Speaker 1: off the stew hopefully she's dropping that baby as we
Speaker 1: speak instead of dropping it like it's hot. But you
Speaker 1: know our girl Mandy, she out here just Mandy doing
Speaker 1: all the things because Mandy k never sits still. I'm
Speaker 1: sure Mandy's like and literally I don't even know, painting
Speaker 1: the house or something like that because Mandy is a
Speaker 1: busy body. Oh but we're gonna get Mandy the rest child.
Speaker 1: But I got y'all. We have great questions today. We
Speaker 1: got a money question, we have a business question. I
Speaker 1: wonder which I should do first? Hum, you know what
Speaker 1: last time I did the money question first and the
Speaker 1: business question second. We're gonna flip the script. Okay, So
Speaker 1: the first question comes from my mentor group. So y'all
Speaker 1: know that I mentor young women, especially black women and business,
Speaker 1: well not young young in business. So you can be
Speaker 1: you know, ten, or you can be one hundred and ten.
Speaker 1: But like new wish to business and I do that
Speaker 1: through Patreon via my mentor Tiffany dot com. And so
Speaker 1: one of the things that comes up again from my
Speaker 1: mentees is about about lots of my check maybe like
Speaker 1: ony eleven hundred mentees. One of the things that comes
Speaker 1: up over and over and over. A question that comes
Speaker 1: up is, Tiffany, if I like, when I'm ready to hire,
Speaker 1: how do I go about doing so? Like, how do
Speaker 1: I know who to hire? First? Second? Third? How do
Speaker 1: I go about hiring? So come into the room, the
Speaker 1: mente room. So let's talk about hiring and the mistakes
Speaker 1: that I made so you don't make them, and what
Speaker 1: I would suggest. So everyone's initial needs your reaction when
Speaker 1: it comes to hiring someone. They think that they ought
Speaker 1: to hire an admin first, which kind of makes sense, right.
Speaker 1: You're like, oh, I need help with these emails, I
Speaker 1: need help navigating, you know, like some sort of honestly
Speaker 1: somebody to kind of like put by your side to
Speaker 1: help you pick up the pieces. Typically that's like an admin.
Speaker 1: And that's what I did. And I would say and
Speaker 1: that although having an ADMIN can be an important component
Speaker 1: to like growing your business and making them more stable,
Speaker 1: I push back and say, the first person you need
Speaker 1: to hire is a financial person because money is the
Speaker 1: life blood of your business. Literally, the blood that flows
Speaker 1: through your business body is money. And if the money
Speaker 1: ain't right, sis, neither are you walk with me. Okay.
Speaker 1: So here's the thing. I know this firsthand because I
Speaker 1: hired an admin first, and for the first two years
Speaker 1: of business, I did not do my taxes because who
Speaker 1: had an accountant? Not me? I had ADMIN, and so
Speaker 1: I was afraid. And that's not true. I had gotten
Speaker 1: an accountant, but I had gotten one later on down
Speaker 1: the line, and as a result, I was behind on
Speaker 1: filing for taxes. And then I got afraid to mention
Speaker 1: that I was behind, and it just became a mess
Speaker 1: until my accountant, God bless his his soul, he's still here.
Speaker 1: But Carlos hit me up because he saw me at
Speaker 1: Shopwright literally took his car and blocked the entrant, blocked
Speaker 1: the aisle. He said, you in my office this week.
Speaker 1: I was like, Carlos, I'm scared to come because i
Speaker 1: haven't done taxes since I started my business, and I'm overwhelmed,
Speaker 1: and I don't have any receipts and I'm still using
Speaker 1: my personal bank account to pay bills. I'm still using
Speaker 1: my personal debit card, credit card. I'm a mess, and
Speaker 1: I know you are too. I know you don't have
Speaker 1: you a separate bank account, I say, you, says, I
Speaker 1: know you're still using your personal credit card, your personal
Speaker 1: debit card more than you are to even if you
Speaker 1: do have a bank account. I know you're still co
Speaker 1: mingling funds. This is what we all do, and it's
Speaker 1: not it's not right, but it's okay. And so Carlos said,
Speaker 1: how much do you think you? Oh, and I don't
Speaker 1: know why, but I had convinced myself I owed eight.
Speaker 1: I owed thirty thousand dollars in taxes. He was like,
Speaker 1: did you even make thirty thousand? I don't know why.
Speaker 1: I don't know why. That's the number ahead of my head.
Speaker 1: And he was like, you don't. He said, I've done
Speaker 1: your taxes over the last two years and you owed
Speaker 1: about eight. And I was like, oh, that's not as bad.
Speaker 1: Even though I didn't have eight, but still that wasn't
Speaker 1: as bad. He said, it would have been about five,
Speaker 1: but because of the fees and all of like, because
Speaker 1: you haven't filed your taxes and you've been late and paying.
Speaker 1: It went from like four points something four and a
Speaker 1: half to five to eight, and that's when I realized, oh,
Speaker 1: that the delay in working on getting my finances together
Speaker 1: was costing me money, and that money cannot be reinvested
Speaker 1: back into my business the budget Neisa. So if I
Speaker 1: was going to go back to young be back, then
Speaker 1: I would have said, Tiffany, you need to get your
Speaker 1: accountant or bookkeeper, someone in that realm first and foremost
Speaker 1: you don't need to get them like first second, but
Speaker 1: the moment that you say to yourself, you know what,
Speaker 1: I need to hire someone like ideally an accountant. Now
Speaker 1: here's the thing. An accountant. The good thing is that
Speaker 1: you meet you can meet with them quarterly, and so
Speaker 1: prices can range anywhere from I don't know, like fifteen
Speaker 1: hundred dollars for the year to upwards of that, you know,
Speaker 1: and so you can save up and say, okay, before
Speaker 1: might start my business, I know, I'm going to find
Speaker 1: an accountant and I'm going to you know, and making
Speaker 1: my business to be able to afford that fifteen hundred
Speaker 1: dollars for the year, and or also potentially a bookkeeper.
Speaker 1: That would be connestly, honestly, probably my second higher if
Speaker 1: I had multiple streams of income. So if let's just
Speaker 1: say I had a smaller business where maybe it's a
Speaker 1: speaking business, I might not need a bookkeeper because it's
Speaker 1: not like I'm speaking every single week where money is
Speaker 1: coming in so rapidly that I need to keep track.
Speaker 1: But let's just say I had a business where I
Speaker 1: was selling things online and I was making you know,
Speaker 1: ten twenty one hundred sales a month. A bookkeeper is
Speaker 1: going to be a helpful person. And bookkeepers, you know,
Speaker 1: you can find a bookkeeper for around four or five
Speaker 1: hundred bucks a month, give or take, and so it's
Speaker 1: not a little bit of money. But the reason why
Speaker 1: bookkeepers can be so helpful is if I would have
Speaker 1: had a bookkeeper, I wouldn't have had the issue of
Speaker 1: not having I didn't know what to give Carlos, my accountant,
Speaker 1: because my finances were a mess. So a bookkeeper is
Speaker 1: what keeps you in line day to day. The bookkeeper
Speaker 1: keeper is creating a ledger of money coming in and
Speaker 1: money going out. They're keeping you financially organized day to day.
Speaker 1: So that way, when it's time to file taxes, whether
Speaker 1: it's once a quarter, every other you know, twice a year,
Speaker 1: or once a year, the bookkeeper puts it in a
Speaker 1: in the way that an accountant receives it. So they're
Speaker 1: going to upload it to like quick books, or they're
Speaker 1: going to put it in an Excel spreadsheet in the
Speaker 1: way that accountants navigate. Now, some accountant firms were also
Speaker 1: offer bookkeeping, so you can ask about that. But to me,
Speaker 1: if I was hiring, like you know, and to be
Speaker 1: very beginning, because here's the thing, you could be your
Speaker 1: own admin. Is it a lot of work, yes, but
Speaker 1: here's how I was my own admin. So in the beginning,
Speaker 1: like especially when I had no no no, no new money,
Speaker 1: what I used to do was I remember thinking to myself,
Speaker 1: everyone is writing me, hey, Tiffany, and they're asking me
Speaker 1: for personal favors. I wish there was someone else that
Speaker 1: was like a middleman, so they didn't know that I
Speaker 1: saw it, and so I was like, well, why do
Speaker 1: they don't know who's answering this email? So I made
Speaker 1: up an admin name. Her name is Michelle, and to
Speaker 1: this day my admin her name is Rose for real,
Speaker 1: but she still answers my emails as Michelle. And I've
Speaker 1: had about five or six Michelle since I started the
Speaker 1: business fifteen years ago, and so I was the first. Michelle.
Speaker 1: You would email me and say, hey, Tiffany girl, real
Speaker 1: quick favor. You could come speaking by school and Michelle
Speaker 1: would write you, hello, Tanya, thank you so much for
Speaker 1: reaching out to Tiffany. This is her admirin Michelle. Meanwhile,
Speaker 1: it's me the old time. Can you please give us
Speaker 1: the time and the date and I will check with
Speaker 1: Tiffany to see that if it it's with her schedule. Mean,
Speaker 1: well it's me, you know. And then people are like, oh,
Speaker 1: excuse me, Michelle, is she available on Friday? I'll ask,
Speaker 1: and I'm like, I'm not because Gary, I didn't want
Speaker 1: to work for free. So Michelle over invite back. Unfortunately,
Speaker 1: on this moment, Tiffany is not available, but please check
Speaker 1: back in another two months. Well she has some more availability.
Speaker 1: It created the space between me and the people emailing it,
Speaker 1: emailing me to ask for request, and it made me
Speaker 1: look a little more professional. Well, I even got Michelle
Speaker 1: her own email child, Michelle at the Budgetizza dot com.
Speaker 1: I ain't no Michelle and so, but it was so helpful.
Speaker 1: So I learned that I could do that for myself.
Speaker 1: But what I couldn't do was the business finances for myself,
Speaker 1: and I'm telling you if your finances are funny, child,
Speaker 1: I've made so many financial mistakes is my business because
Speaker 1: I didn't learn that lesson until too late. It's cost
Speaker 1: me hundreds of thousands of dollars, if not almost seven
Speaker 1: figures in mistakes and tax mistakes. I finally paid my
Speaker 1: last tax bill, it was like two hundred fifty thousand dollars. Okay,
Speaker 1: So I'm telling you this from a place of girl,
Speaker 1: I'll be like me. Listen to me, but don't be
Speaker 1: like me. You know, if you're in business and you're
Speaker 1: you're considering starting a business, you know you want right
Speaker 1: away to separate your business funds from your personal funds,
Speaker 1: so instantly getting two separate checking accounts, two separate deborat accounts.
Speaker 1: You know, ideally look to see if you can get
Speaker 1: even two separate credit cards. Sometimes that's not possible because
Speaker 1: they won't issue you a credit card just yet. Although
Speaker 1: there are some business secured cards where it's literally like
Speaker 1: a credit card that you put a deposit down, and
Speaker 1: that five hundred dollars that you put up for the
Speaker 1: business that's the limit on your on your business credit cards.
Speaker 1: So that's available, but separating your business and personal funds,
Speaker 1: getting yourself an accountant first and foremost, and you may
Speaker 1: or may not need a bookkeeper. And then as you
Speaker 1: grow you might need other financial people. But that would
Speaker 1: be my first hire. And you know, hiring is not easy.
Speaker 1: And then you know, if you don't have any additional money,
Speaker 1: consider interns. Interns are a great way to learn how
Speaker 1: to lead, to learn how to defer, and to to
Speaker 1: give instruction to you know, interns. There's a great website.
Speaker 1: I'm gonna find it. I'm gonna my sister Tracey, who's
Speaker 1: like also a publicist. This is great website where she
Speaker 1: finds interns who they do it for class credit. You know,
Speaker 1: I'm gonna find it and we'll put it in the
Speaker 1: show notes. But interns are a great place to start
Speaker 1: to But know that interns are typically only there for
Speaker 1: like a semester, so three or four months, so you
Speaker 1: can't be living and dying off interns. But and interns
Speaker 1: are a great way to find some good people that
Speaker 1: I've hired interns after they've interned for me for a while.
Speaker 1: So but hopefully that was helpful. I know it was, girl,
Speaker 1: because you don't know what I'm talking about fifteen years
Speaker 1: in the game, forty million dollars later, I have learned
Speaker 1: all the mistakes the hard way, so you don't have
Speaker 1: to if you are someone who was like, ough girl,
Speaker 1: I want to start a business, you know, or my
Speaker 1: business is you know, up and running, but I don't
Speaker 1: really know what I'm doing, or I need some mentorship.
Speaker 1: Mentorship is so critically important. Then head on over to
Speaker 1: my men, to Tiffany dot com and join our Patreon.
Speaker 1: It's only ten bucks a month, but if I'm being honest,
Speaker 1: it's going up to twenty bucks a month, but the
Speaker 1: old people will be grandfathered in. I think actually is
Speaker 1: going up next month. I don't know when this is
Speaker 1: gonna air, but y'all, so if you want to lock
Speaker 1: yourself in ten bucks a month, it will always be
Speaker 1: ten bucks a month for those who signed up for
Speaker 1: ten bucks a month, and it'll go up for the
Speaker 1: new people later. But yeah, you can join us at
Speaker 1: my mentor tiffany dot com link. In the show notes,
Speaker 1: We're gonna take a blizzy black break and come back
Speaker 1: with the money question, and it's actually a really good one,
Speaker 1: and I'll be back in black. Y'all. Don't tell many,
Speaker 1: I've been acting up too much time. I've been good.
Speaker 1: I've been real good. All right, see you in a
Speaker 1: minute and we're back and black and black. So, first
Speaker 1: of all, shout out to this lip that I'm wearing,
Speaker 1: because so y'all know we have this super dope black
Speaker 1: um producer her name is Emaney. Annie Mandy was like, yes, lip,
Speaker 1: I just love black women because we compliment you like
Speaker 1: for what you have on Yes, bun okay, skin brown
Speaker 1: see you. I just love being black yp So she
Speaker 1: was like, okay with these lips, and because we love
Speaker 1: black around here, my lip is by If you was
Speaker 1: watching us on YouTube, you would be able to see it.
Speaker 1: But you know, my lip is by this black owned
Speaker 1: I guess health and beauty brand called the lip Bar.
Speaker 1: And actually, no, Melissa personally, she's super dope black woman
Speaker 1: in business. She actually was rejected on Shark Tank, but
Speaker 1: when Jesus said yes, nobody say no. So she has
Speaker 1: grown her business to be this multimillion dollar business that
Speaker 1: is available at Target's. She actually Melissa is from Detroit,
Speaker 1: from the d and I've been to the Lip Bar
Speaker 1: in Detroit. It's super cute. And so I'm wearing guess
Speaker 1: what the let me tell you how I am right
Speaker 1: on point right here. So the lip color I'm wearing
Speaker 1: is called rich Auntie, and that ain't the truth, okay,
Speaker 1: because lord knows I'm a rich Aunty. So it's really pretty.
Speaker 1: It's like this, like it's a very pinky red, so
Speaker 1: you know. And my liner is Mac but whatever. You know,
Speaker 1: we're not gonna give back too much because it's hyperworld
Speaker 1: via Mac whatever. But we really here for the lip
Speaker 1: bar rich Aunty. Okay. That's one of my favorite colors,
Speaker 1: is one of her best sellers. So let's get into
Speaker 1: the money question of today. So this question comes from
Speaker 1: Naya Hi, and Naya you see what I did there?
Speaker 1: So Nya says, hey, Tiff and Mandy, I am twenty
Speaker 1: nine years old, and until I found this podcast about
Speaker 1: six months ago, no one all caps, I repeat again,
Speaker 1: all caps, no one has been able to make me
Speaker 1: one care about to feel educated and empowered about my money. Nay,
Speaker 1: your girl, don't have me crying up here. Naya Okay,
Speaker 1: She says, I struggled with math since I was younger
Speaker 1: and often felt discouraged for my ability to manage my money.
Speaker 1: Oh mama, but you all use language and concepts that
Speaker 1: really help me to get it. Yes, that's what we're
Speaker 1: here for, Naya, She says, I have a question for
Speaker 1: the baqa that's a little dance to the tune of
Speaker 1: Tiffany's song. Why the ba qa a to b a
Speaker 1: q a? What you say? I love that you love
Speaker 1: that song because I feel like Meddie hates it, but
Speaker 1: it's here to stay. Oh no, she dover hate it,
Speaker 1: so she said. I recently started a new job. I'm
Speaker 1: trying to be intentional about my retirement options. Good, Naya.
Speaker 1: I have a decent sized rollover for my last four
Speaker 1: one K about fifty five hundred invested. Okay? Good. I
Speaker 1: was told I have two options. You actually have more,
Speaker 1: but that's okay. One opened a rollover IRA with my
Speaker 1: personal bank so that it's always there if and when
Speaker 1: I changed jobs, or two roll it over into my
Speaker 1: new jobs four one K plan I have have, I said,
Speaker 1: rollover enough. I'm trying not to get text y'all taught
Speaker 1: me that. Yes, girl. What are some of the advantages
Speaker 1: of a true additional IRA versus keeping the money in
Speaker 1: a four one K or vice versa? Is it better
Speaker 1: to have two accounts? Or just keep all of my
Speaker 1: retirement funds in one account. Thanks for all that you
Speaker 1: do to educate our community. Ny, your girl. First of all,
Speaker 1: we're gonna give you a round of applause for thinking
Speaker 1: about this ahead of time, for understanding that you can
Speaker 1: trigger a tax, an unwanted tax trigger, you know, if
Speaker 1: you don't do this correctly. So I'm glad that you're
Speaker 1: asking this question and we're gonna get you straight. So
Speaker 1: there are actually multiple things you can do. So let's
Speaker 1: go over. There are five things you can do. So one,
Speaker 1: you can leave your money in your current four one
Speaker 1: K plan. But you know the problem is is that
Speaker 1: like like the pro is I guess it's just convenient,
Speaker 1: but the cond is child you know, one, you can't
Speaker 1: contribute to that plan anymore. So by two, they might
Speaker 1: actually charge you additional fees because you're no longer an
Speaker 1: employee and who wants to manage multiple like you know,
Speaker 1: I rate or four one K plans are two different companies.
Speaker 1: So we're that is an option. But because I want
Speaker 1: you to know that there's options, there are about four options.
Speaker 1: But we're not doing that. Okay, she can't sit with us.
Speaker 1: We're not leaving your current four one K plan where
Speaker 1: it is buy okay two option two, you can roll
Speaker 1: it into a new four to oh one K plan.
Speaker 1: This is one of the options that you brought up,
Speaker 1: and so here's some of the pros. So assuming that
Speaker 1: you like the new plans, the costs and the features
Speaker 1: and the investment choices, this can be a good option. Right,
Speaker 1: So your savings has the potential for growth, and that's
Speaker 1: it's tax deferred, meaning like you don't have to pay
Speaker 1: taxes on it now because you know with four one
Speaker 1: ks you don't pay taxes now. You pay taxes when
Speaker 1: you pull it out, and so you can continue and
Speaker 1: if you continue to work for the company, then you
Speaker 1: know you could just continue to add to that four
Speaker 1: one K plan. Those are some of the pros. Is
Speaker 1: that everything is right there. You know, you know you
Speaker 1: probably will have the same protections that you had at
Speaker 1: your other FOREU one K plan. The cons is that
Speaker 1: you're going to need to liquidate your current for one
Speaker 1: K investment and reinvest it into your new four one
Speaker 1: K plan and the new money, this money that's going
Speaker 1: to be rolled over will be subject to your new
Speaker 1: plans with draw rules, so you know you likely whatever.
Speaker 1: Once you locked that money in there, you're not gonna
Speaker 1: be able to typically take it with you unless you
Speaker 1: leave your employer. But I mean, I think that's a
Speaker 1: con that you kind of know, like I'm gonna put
Speaker 1: my money here and leave my money here. So you
Speaker 1: can leave your money with this, you could roll it
Speaker 1: over to this new place. The key that's really critical
Speaker 1: is that you are not to do the rollover yourself.
Speaker 1: The bank has to talk to the bank, so they're
Speaker 1: going to tell you, like, I just rolled over some money, right,
Speaker 1: So it wasn't for me to like cash out the
Speaker 1: money and say, here's thirty thousand dollars. Got no, no, no, no, no,
Speaker 1: Like literally, they're going to do themselves and give you
Speaker 1: clear directions. For one. For me, for example, they actually
Speaker 1: sent me a check that was not for me. It
Speaker 1: did not even have my name on it, but it
Speaker 1: really was for my new plan. And I was literally
Speaker 1: supposed to mail the check to the new people. That
Speaker 1: was it. I was like, just just to hold the
Speaker 1: check and mail it to the new people, if that
Speaker 1: makes sense. So you just want to make sure that
Speaker 1: in rolling over whatever you choose, that you don't accidentally
Speaker 1: trigger a tax and fee of You don't want to
Speaker 1: trigger any of that because one, you're not fifty nine
Speaker 1: and a half, so if you take any money now
Speaker 1: you're going to be, there's a fee attached to that.
Speaker 1: And then two, like just like when you are fifty
Speaker 1: nine and a half and sixty and sixty five, if
Speaker 1: you take your money out, you have to pay taxes
Speaker 1: on the money either way, so you will be paying twice.
Speaker 1: So you don't want to make that mistake. So this
Speaker 1: is a viable option rolling over into your four to
Speaker 1: one K plan. Now there's nothing wrong. I don't think anything.
Speaker 1: There's nothing negative here. You just have to decide. So
Speaker 1: number three is you can roll it over into a
Speaker 1: traditional individual retirement account. So that's an IRA. So you
Speaker 1: have a four oh one K and IRA is basically
Speaker 1: like a four on one K that you have at
Speaker 1: your it's not buy an employer, it's with your bank.
Speaker 1: So because iras are not sponsored by employers, you own
Speaker 1: them directly. You won't have to worry about making changes
Speaker 1: to your account should you change jobs again in the future.
Speaker 1: So this is a pro and the IRA provider might
Speaker 1: offer you a bigger arrange, like a wider arrange of
Speaker 1: investment options and services than your new employer. So many
Speaker 1: times for one k's will just have mutual funds, and
Speaker 1: mutual funds typically have higher fees because a mutual fund
Speaker 1: typically the the investments inside of a mutual fund are
Speaker 1: picked by people, right, and so when someone gets involved,
Speaker 1: they want to get paid, and so as a result
Speaker 1: of that, mutual funds have higher fees that are called oh,
Speaker 1: of course, I forgot the name of the dam fees.
Speaker 1: Either way, they're called fees, but it's like a special fee,
Speaker 1: a special name for those fees. But so there might
Speaker 1: be so you might want to compare. If it was me,
Speaker 1: I would compare. You know, here's the bank where I bank?
Speaker 1: Let me see your IRA? What are your fees? Four
Speaker 1: one K? At my new job, what are your fees?
Speaker 1: And then what are my investment options? Do you just have?
Speaker 1: You know, the investment options at your four K are
Speaker 1: probably pretty limited, they typically are, but iras are usually
Speaker 1: pretty broad. But broad might not be good if you're
Speaker 1: going to be overwhelmed in choices. Okay, so the pros
Speaker 1: are maybe a lot lower fees, bigger investment options. Some
Speaker 1: of the cons are Once you roll over your funds
Speaker 1: into an IRA, they may no longer be eligible for
Speaker 1: a few future rollovers into a four one K plan,
Speaker 1: you know. So what that just means is, let's just
Speaker 1: say later you're like, Oh, I'm at this new job
Speaker 1: and I really like them and I love the choices
Speaker 1: they have. I want to take my IRA money out
Speaker 1: of my personal bank and then put it into a
Speaker 1: four one K plan at this new new job. You
Speaker 1: probably won't be able to do that, but that's okay.
Speaker 1: You also need to specify how the funds are invested.
Speaker 1: This is where people get hung up and you don't
Speaker 1: do it. The money is literally going to be sitting
Speaker 1: as cash, literally losing its value via inflation, so you
Speaker 1: have to put money. You have to invest it actively,
Speaker 1: you know. So, like I said before, so the pros
Speaker 1: here are likely lower fees potentially, but you're going to
Speaker 1: check on them and also bigger investment options. The cons
Speaker 1: for rolling it over into an IRA, your own personal
Speaker 1: IRA are that you won't be able to roll it
Speaker 1: over likely to a four to win K ever again,
Speaker 1: and that's not so bad. But also if you're someone
Speaker 1: who can't pick investments, you're not really sure you won't
Speaker 1: have to pick, so you know asking yourself, are you
Speaker 1: are you? Do you feel comfortable doing that? So that's
Speaker 1: the third option, right, So number four, you can convert
Speaker 1: it into a wroth ira, now a wroth ira. The
Speaker 1: difference between wroth and regular ira and an ira is
Speaker 1: you get the tax benefit up front. You don't pay
Speaker 1: taxes now, you pay taxes later. The wroth ira you
Speaker 1: do pay taxes now on the money that you put
Speaker 1: into that wroth ira, and then later when you withdraw it,
Speaker 1: you don't pay taxes later. Okay. So the pros are
Speaker 1: the withdrawals are entirely tax free in retirement as long
Speaker 1: as you're over fifty nine and a half and you've
Speaker 1: held the account for five years or more. Okay. Now
Speaker 1: the cons are, because wroth iray's funded with after tax dollars,
Speaker 1: you're going to have to pay taxes on the money
Speaker 1: in your four one K that's you're rolling over. You're
Speaker 1: gonna have to pay the taxes now. So it's like,
Speaker 1: let's just say you're you know, you're taking out this
Speaker 1: fifty five hundred. I don't know what the tax rate is.
Speaker 1: Let's just say they say you're taking out one thousand
Speaker 1: dollars from that. You pay taxes now you put it
Speaker 1: into your wraw and wouldn't pay taxes later. A raw
Speaker 1: iray must be opened for five years in order to
Speaker 1: withdraw earnings tax free, and you're going to be subject
Speaker 1: to that ten percent penalty if you would draw your money,
Speaker 1: any money before you're fifty nine and a half. So
Speaker 1: that's just in general, that's why I said, you don't
Speaker 1: want to cash out because there's a ten percent penalty
Speaker 1: plus whatever the taxes are you're going to pay so
Speaker 1: raw iray. So this to me is not my fave
Speaker 1: because you know, like you're you're already in the IRA
Speaker 1: four one K space where you haven't paid taxes, so
Speaker 1: I probably wouldn't consider it, but I want you to
Speaker 1: know it's available, and the last thing that you can do,
Speaker 1: the fifth option is the cash out, right, So that
Speaker 1: just means that you are just going to take the money,
Speaker 1: you know, like the pros are like you could take
Speaker 1: the money. I think like after you turn fifty five,
Speaker 1: you could take the money from your four one K
Speaker 1: and just cash it out. But you sound like you're
Speaker 1: twenty nine, So that's that's a prob but not really
Speaker 1: for you. But the cons are your withdrawals are subject
Speaker 1: to a mandatary twenty percent federal withholding and in some
Speaker 1: cases state withholdings. So you might, you know, like it's
Speaker 1: gonna be taxed with like you're gonna be tax plus
Speaker 1: a penalty if you're under the age of fifty nine
Speaker 1: and a half, which is across the board. And so
Speaker 1: the cons for taking out your money now are and
Speaker 1: I did this, so don't do this. I did this.
Speaker 1: I was thirty, was about your age. I was thirty.
Speaker 1: I was leaving my well, my preschool. I was a
Speaker 1: preschool teacher, and my school closed its doors because they
Speaker 1: lost their funding. And I had about thirty thousand dollars
Speaker 1: in my accocks. I taught for like ten years in
Speaker 1: my four one K. It was a four to three
Speaker 1: B which is basically like a four one K for nonprofits.
Speaker 1: And I didn't have any money because it was a recession,
Speaker 1: and I took all the money out and I lost
Speaker 1: so much of it because I had to pay taxes
Speaker 1: on it, and I had to pay that ten percent penalty.
Speaker 1: And so I'm telling this from a place of where
Speaker 1: I've been. Don't go there. So the two options are
Speaker 1: to me, you know, I'm not giving you financial advice,
Speaker 1: because you got to get that financial advice from people
Speaker 1: that you pay for financial advice. But if this was
Speaker 1: Moah looking back at thirty year old Tipping, when I
Speaker 1: was making the choices, I would be leaning into rolling
Speaker 1: it over potentially to my new four one K plan
Speaker 1: at my new job and or opening up a personal IRA.
Speaker 1: And the thing that would help me make the decision
Speaker 1: is who has more fees and do I feel comfortable
Speaker 1: making my own investment choices in my IRA. If I don't,
Speaker 1: then I might go with the four one K. If
Speaker 1: I do, then I would go with the IRA, especially
Speaker 1: if the fees are low. These are the things that
Speaker 1: would be thinking. So I'm not here to tell you
Speaker 1: what to choose. I'm here to give you information so
Speaker 1: you could choose what's best for you. Sis Okay, Naya
Speaker 1: and Naya, I don't know this stuff. I do. So
Speaker 1: hopefully that was really helpful, not just for you, Naya,
Speaker 1: but for the listeners at Lord. If you have a
Speaker 1: b a q A A b a q A what
Speaker 1: to say A b a Q eight with mandate b
Speaker 1: a Q eight with Tiffany, you can go to brand
Speaker 1: Ambition podcast dot com and you can click like the
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Speaker 1: hit us up on Instagram we are the BA podcast,
Speaker 1: or no, we are Brand and Bichon podcast. On i
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Speaker 1: podcasts at gmail dot com, so you can email us,
Speaker 1: message us, get to us across the board, you know,
Speaker 1: go ahead on and get you this lip rich Auntie
Speaker 1: by the lipbar. Okay, because it's serving for the gauds.
Speaker 1: Ask your questions if you want to be a mentee,
Speaker 1: like I said, the link will be in a bio
Speaker 1: show notes my mentor Tiffany dot com. And yeah, hopefully
Speaker 1: you like it here. Hopefully you love it here because
Speaker 1: it's cutely here or whatever. And so I love your questions.
Speaker 1: Keep asking them and keep coming back and tell a
Speaker 1: friend have you told your bestdiet to listen to BAQA?
Speaker 1: Have you forwarded her the actual podcast? Don't be stingy sis,
Speaker 1: share the wealth all right until next week? Bye? Hey,
Speaker 1: BA fam. We could not do this show without your
Speaker 1: support or the support of our team behind the scenes.
Speaker 1: The Brown Ambition Podcast is produced by Imani Crosby and
Speaker 1: Dennis Stanplinsky is our in house tech guru. I am
Speaker 1: your co host, Mandy Woodrif Santos, and we will see
Speaker 1: y'all next week. BA FAM