How to Plan Your Finances Like a Boss (hint: it’s never too late to start!)

How to Plan Your Finances Like a Boss (hint: it's never too late to start)

Enjoying the red sunset from the patio of your brand new house you bought with your hard-earned savings? Check!

Just got a photo of your kid on the campus where she’ll spend the next 4 years studying, all thanks to that college fund you set up for her many moons ago? Check!

Retiring in a quiet beach town with a pension fund you saved for all these years? Check!

What do all these things have in common?

Two words: financial planning.

As a small business owner and accountant who loves helping others master their finances and gain financial freedom, I’ve been asked from time to time about general financial planning. 

So I invited my good friend Grant van Zyl, Certified Financial Planner at The Wealth Room, to teach my Master Your Finances students how to plan their finances like a boss. 

And the best thing? It’s never too early or too late to start, Grant says!

Retirement Planning: Self-employed vs. Employee

Being a small business owner or a freelancer versus being an employee makes a huge difference in your approach to your financial planning and, in particular, your retirement.  

A self-employed person’s most important asset on their balance sheet is their business, which they can exit at a later stage in their life and make a profit that can go towards their retirement plan. A retirement annuity is the best choice in this case, as it gives flexibility and has tax advantages.

An employee, on the other hand, builds their employer’s assets up and not their own, so, from a retirement planning standpoint, an employee will have to allocate more funds towards a pension fund or a retirement annuity to make sure that they have sufficient funds for their retirement.  

Usually, the employer contributes a percentage towards the employee’s pension fund and the employee has to match that same percentage to get to the final amount contributed towards the employee’s retirement plan.  

Have an exit plan from your business ready

However weird that may sound, having an exit plan from your business ready is a good investment starting point, since your business is your most valuable asset.

You may argue that you started your business to be your own boss and do something that you love without it feeling like a job, right?

I’m 100% with you on this one, BUT, from an investment perspective, you should focus on the best possible return on investment from your business and this takes effort and hard work.  

It’s your responsibility as a business owner to position your business properly to make a profit. Going for a commission-based model instead of a fee-based one and having many passive income streams will make your business scalable and easier to sell for a profit down the line.   

Compound interest is your friend

Albert Einstein said it first: compounding is the eighth wonder of the world. 

Don’t believe me? Just put compounding to work and watch your savings grow like crazy!

The sooner you begin to invest, the greater impact compounding will have on your investment. You can start small and be consistent, and over a long period of time compound will skyrocket the value of your investment. It all depends on the amount you invest, the investment period, and the growth rate. 

So let compound interest work for you while you sleep!

Have clear financial goals 

Do you know what you want to achieve with your finances? And where do you want to be financially in 5, 10, 20 years from now? Do you want life insurance? What about your retirement plan? Are you setting money aside for an emergency fund? 

If you can’t come up with clear answers at the moment and you don’t have your priorities straight, start searching deep inside of you and ask specific questions about your desired financial position.

Remember, life is short and you need to take control of your destiny AND your finances. Do NOT let them control or define you!

Being crystal clear with your financial goals will help you shape a better financial future not only for you but also for your family.

Consult with a financial planner and educate yourself

Investing and financial planning can without a doubt be daunting and cause you massive headaches. Life insurance, last will and testament, pension fund, college fund, emergency fund, and the list goes on… 

Where the heck should you start?

It’s best to speak with a financial planner who will sit down with you and understand your needs and financial goals.

Having great chemistry with your financial planner means they’ll work on your personal needs and wants, and offer you the best solution.

Also, don’t underestimate the power of self-education. 

Nowadays, with so many free resources at your fingertips, you have no excuses to not be familiar with the investment terminology. 

  • Go to YouTube and look for channels with tips on financial planning and investing
  • Read blog posts
  • Listen to podcasts

Knowledge = Power

If you really enjoyed Grant’s wealth of knowledge (pun intended), come join me in my Master Your Finances course and our private Facebook group where you’ll not only learn tons about accounting and finance but you’ll also have the opportunity to e-meet other small business owners and expand your network.

Ready to spread your wings to financial freedom?

Sign up NOW and get ready to be blown away!    

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