To have more confidence about becoming your own boss, gain a better understanding of 3 things: 1) health insurance, 2) managing your finances, and 3) retirement saving.
IN GOOD COMPANY
There are over 30 million small businesses in the US. In fact, that’s 99.9% of all US businesses.
Thinking about going out on your own? Let’s talk about how you can set yourself up for success as an entrepreneur.
COBRA — Allows you to keep your employer-provided health insurance plan for 18 months after you say goodbye to your employer. You pay the entire premium.
State health insurance — Your state has online tools to advise you which plan to participate in. They can also let you know if you qualify for any assistance programs.
Your partner — If your partner has health insurance and you can join it, it will likely be cheaper and easier than buying your own.
Your first year in business may not be rainbows and unicorns 🦄✨ so plan accordingly with an emergency fund. Estimate how much income you’ll need to replace to pay for living expenses. Then make a plan to start saving it. The more saved, the longer your runway.
The right bank account structure leads to better organization. Consider setting up several business accounts, each for a specific purpose:
Revenue — Deposit all monthly revenue into this account, then distribute to the other accounts listed below.
Expenses — Transfer 30% of monthly revenue to this account.
Taxes — No one likes an unexpected tax bill. As a business owner, you should proactively save for the taxes you’ll owe. Transfer 15% of monthly revenue to this account.
Owner’s pay – Transfer 50% of monthly revenue to this account.
Profit – This money helps build up your business savings, reinvest into the business, or save for retirement. Transfer 5% of monthly revenue to this account.
Savings – Aim for 3x your monthly business expenses. 🎯
Entrepreneurs are notorious for neglecting their own retirement! Here are some options to build up your savings:
Traditional IRA or Roth IRA – Contribute up to $6,000 in 2022.
SEP IRA – For anyone who is self-employed.
Solo 401(k) – C corporations, S corporations, and LLCs with no employees (except a spouse) can participate in this plan.
Schedule an appointment with a Fruitful Financial Guide to talk about how you pursue your self-employment dreams.
Keep in touch for a Fruitful conversation
Thank you! Your submission has been received!
Oops! Something went wrong while submitting the form.
Fruitful, Inc. (“Fruitful”) is an SEC registered investment adviser headquartered in New York, New York. This is not an offer to sell securities or the solicitation of an offer to purchase securities. This is not investment, financial, legal, or tax advice. Past performance is not a guarantee of future performance.
*Testimonials were provided by clients of Fruitful, Inc. during our beta testing phase. Clients were not compensated, nor are there material conflicts of interest that would affect the given testimonials. These testimonials may not be representative of the experience of other clients, and do not provide a guarantee of future performance success or similar services.
Certified Financial Planner Board of Standards, Inc. (CFP Board) owns the certification marks CFP®, CERTIFIED FINANCIAL PLANNER™, and CFP® (with plaque design) in the United States, which it authorizes use of by individuals who successfully complete CFP Board’s initial and ongoing certification requirements.