The company I started 4 years ago is doing so much better than I expected, now I don’t know what to do with all of the money I’m making

[fantomas318]

@bellagirl I made the assumption that OP does not have kids. If that is incorrect it changes the equation, but my point that life insurance should never be a part of an investment discussion remains. Term insurance fits the bill for the vast majority of people.

 

[bellagirl]

@fantomas318 I appreciate that you feel that way and you're trying to help but if life insurance comes up in a financial advice/planning conversation it's because it's standard protocol. It is not a red flag. I know life insurance sales gets a bad rep because there are agents in the industry that do not sell life insurance for the right reasons. And this is the result - people have difficulty trusting anybody that sells life insurance.

Kids or not, life insurance is a key part of planning for many reasons: Estate liquidity, leaving a legacy, protecting income, funding college savings, providing peace of mind for survivors, giving to a charity, preparing for a future family, taking care of parents or siblings, preparing for a special-needs loved one - all these things are personal in nature and should be discussed with a licensed life insurance agent, financial advisor, or financial planner - and of course, you want to find an advisor who is motivated by helping others instead of trying to close a sale. No different than finding a good mechanic or car salesman.

As far as term insurance or permanent insurance, there isn't a "bad" one - there is only an appropriate one. Of course the company issuing the policy is important to trust and exclusions are also something to consider as well. I've had thousands of these conversations with clients and their reasons for getting life insurance often times is not the reason you think but protection is the universal constant (unless you're super rich, then there are other reasons to get it).

The bottom line is that life insurance should be part of a financial plan if a person's net worth isn't enough to provide for that person's proper burial or take care of those things that are important to that person. Personally, I see life insurance as having the single greatest impact on a financial plan for most people. It's a great way to leverage your dollars while you are trying to accumulate your wealth.

 

[fantomas318]

@bellagirl Do you sell life insurance? Honest question.

 

[bellagirl]

@fantomas318 I am a financial planner. All financial planners sell life insurance because it's part of financial planning. Just like all surgeons use a scalpel or all mechanics use a wrench.

 

[tammylovesjesus]

@manillabar Echo this. You're making enough that you need a plan customized to your particular situation. See NAPFA or XYPN for a searchable list. Once you get a list of fee-only Certified Financial Planners, check out his/her websites/social media to adjust the fit. It's entirely possible there's an XYPN advisor that specializes in DJs.

 

[marimur]

@aishling My advice is simple. Find yourself a good financial advisor. They’ll know if you should get a 401k, or if you should put your money somewhere else completely, depending on your situation

 

[bellagirl]

@marimur that's great advice!

 

[ericnbev]

@aishling You should figure out what's next, not with your money but in your life. What you do with the money is just a means to an end in my opinion. Until you know what are you aiming at I truly don't think it is possible to decide what's best to use your wealth on. Good luck and congrats man.

 

[proteched]

@aishling I second speaking with a financial planner, but also an accountant who can advise you in keeping your business expenses separate than your personal expenses to maximize your tax savings. If everything is going on one card, it’s going to be difficult to differentiate.

 

[laurenf888]

@aishling I have no real financial advice as I am only on this sub because my family too has always lived paycheck to paycheck. I am in my Mid-20s and I am building a better future for myself and my future family.

With that said, there’s something I would like to say that has stuck with me and I was reminded when you stated that different people keep giving you different advice.

If you do what everyone else does, you’ll end up like everyone else. Take advice and lessons from people that have what you want. Or at least think about what you want for your life and research what steps you need to take to get there. Everyone can give you advice on what road to take, but they will take you no where if you don’t even know where you want to go.

 

[liveoutloud]

@aishling I would find a fiduciary nearby. I started making a lot more and did ok by myself but things changed completely when I found an advisor. They help you plan for the future and also give you a reason to save more money. A $2k bill for credit card isnt bad as long as you pay it off each month. You've worked hard, you can enjoy your life. Just keep the future in mind.

 

[danielstri]

@aishling What you’re describing is often called “lifestyle creep” - the idea that as you start to make more money you start to spend more money without even realizing it. I have fought to avoid this, possibly to the point that I’ve over corrected in the other direction.

It sounds like you need a budget. If you use Quickbooks there are built-in tools that tell you where your money is going. It’s nifty. Like you, I spent way too much money going out to eat. QB was able to make this obvious to me.

 

[pklawitter]

@aishling There are a few things you can do right away that will feel good and get you started

1. Look up a monthly budget template and fill it in
2. Calculate your net worth. Do this once a year at least. There are good templates out there for this.
3. Set 1,5,10 year goals for 1,2 above.
4. Study up on conservative, long-term investing. It generates real wealth over time that goes beyond a high income.

Lastly, I heard a podcast episode of Cashflow Ninja with David Mason that reminds me of your situation. He wrote a book called The Cash Machine. I didn’t read it but the podcast episode was good enough so I’d recommend checking it out. Good luck!

 

[dolkcll]

@aishling You should separate business travel from personal travel.

 

[bellagirl]

@aishling Lots of great comments and some have merit. Your money needs to work for you. So, that is the starting point. There are some financial pillars that you can front-load that take people YEARS to accomplish. However, a discussion is more appropriate because a financial advisor/planner would want to know not only what you're making but what your near, intermediate, and long term goals are.

Based on this post, I'd say let's slow down for a moment and look at where you want to be. Do you have or want a family? If so, how big and when? Do you have real-estate experience? Are you saving a nest egg so when you reach retirement age, you have options to keep working or sail into the sunset? Do you know how much you need to retire? When do you want to stop working? Do you have debt? What kind of debt do you have? What are your career goals?

So, lots of questions that need answering. I'd say start with the basics. 3-6 mo. living expenses in savings; I'd want to know how much you have saved for retirement so far. If you do have savings, how is it being invested; who's watching them? Since you have a business, do you have adequate liability coverage? What are the risks of your business on your personal assets (LLC, S corp, C corp, Sole proprietorship).

I'd say your next steps are to simply save the money you don't know what you want to do with into a savings account. Then, you need to prepare to have this kind of conversation in order to organize your priorities and create a path of success that is tailored to you and your goals.