If you invest in your job or retirement. It is not an either/or.
I get this question all the time from entrepreneurs on where to invest.
Should you invest in your business or should you invest in an IRA for retirement?
My simple shpiel? You have to do both.
Then I heard this from other clients: Justin, I feel as if I didn’t have any control over what happens to the stock market! I’d rather just put my money back in my business.
Get It. Feel your sense of having more control in your business, but …
You still need to diversify. You can’t put all your eggs in one basket and invest only in your business & mdash; even if you think your biz tonnes will be down the road.
Here’s why. Let’s say you regularly invest in your business for many years. Then the value of your business is the only thing that is set aside for retirement. But what if you can’t sell your biz for the amount you want to? Or worse, if it’s worth zero when you try to sell it? Is kaput. We don’t want to.
But what if you can develop an investment plan that was not only linked to the stock market! Woohoo! Now we are talking about. Wondering how to make money? Email me.
As well as doing both? Try to reinvest the 5-10% of your income in your business. Try 5-10% of your income for retirement savings.
To save, you must set up a system and it needs to be automated. Not the willy nilly stuff where do manual transfers from your business account to savings account every month or two. We need to take things to DefCon 4. (Anyone who has seen war games?) Take control and automate your savings.
One of the first types of accounts that you can set for retirement is a Roth IRA. You with tax dollars Fund. Grows tax-deferred and as long as you keep it in till you are 59 1/2 the money that you take are tax free. Saweeet!
If you are single and your income is under $ 110,000, should be able to contribute to a Roth. If you are married and your income is below $ 173,000, you should be able to contribute to a Roth. Please check with your accountant.
If you want to invest in your business, there are many ways to do it. Hire employees. Get Office space. Redo your website. Or invest in marketing and technology. The ROI is great here.
Bottom line – diversifying investments. Put the money away for retirement in IRAs, 401ks but also investing in your business.