4 retirement tips for business owners. | FinTips

Today we’re focused on retirement savings tips for small business owners. We’ll cover some of the mistakes we see business owners make when it comes to retirement saving or planning and help you get your dough straight.

Hey dustin tibbetts here financial advisor with jazz wealth managers happy friday everybody hope you’re doing good out there i’ve got a real quick one for you here our fin tips videos that you’re watching here and have maybe seen in the past real short videos just try to teach you something new get you thinking a little bit different or get to a point where you

Might ask somebody questions if you ask questions you learn if you learn you get your dose straight right all right anyways today what i’m going to do is i’m going to give four tips for uh those of you that are business owners and you’re like retirement focused or starting to get towards retirement i see a lot of mistakes there we work with a lot of business

Owners here at jazz and yeah i need to tighten this up a little bit so hang with me here here we go all right number one um i want you to know the purpose of your accounts here’s what happens i’ll just draw this out for you real quick what generally happens is along the way maybe before you started your business you had a 401k you worked for somebody you

Learned the ropes and then you decided you were going to go do it yourself you may have even thought along the way to open a roth ira or maybe that’s all you have is a roth ira because you just knew you needed to save something and you liked the idea of after-tax money well when your business starts to grow your accountant comes to you and i love working with

Accountants by the way because they’re just as interested in saving people money the problem is they’re usually trying to save you money in the short term where a financial advisor is trying to save you money in the long term so there’s a little bit of a clash there and we can work together on that so along the way you have an old 401k now maybe you rolled it

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Over or something you’ve got a roth ira but as a business owner there are advantages to potentially having a sep ira maybe a solo 401k any number of different plans and and your accountant may have come along and said hey you’re making money now things are good why don’t we open one of these for you and you start putting money away here’s the problem you were

More interested in these two accounts along the way because that was your dollars you were putting in i find that there’s a disconnect when advisors set up or i’m sorry when accountants set up accounts for their clients because all of a sudden what happens is it’s like you’re not interested in that you did it to save on your taxable income you did it to help

Reduce your business tax income or something and so you’re less interested in the investments over here you’re watching them like a hawk right i see our customers out there but over here you’re like i had to put away ten thousand dollars um just so i could bring my income down a set by ra or whatever i had to put the money in and you don’t focus on that let’s

Light that thing on fire right let’s go more aggressive here and maybe consider doing something more strategic with your post-tax money or the other way around i mean everybody’s a little bit different it depends on where you’re at but the point is the first mistake i see business owners make is that they discount those dollars because they were sort of forced

To put those away to save on taxes now and in your mind you think it’s done right the advantage is over really the advantage is just beginning there okay number two don’t rely on your business solely for retirement this has happened i’ve seen good times and bad times for customers where they say you know what i got this nice business got like 12 people working

For me or something great family business my succession plan is to back out and let my son-in-law or my my greatest employee to take over they’re going to pay me 5 000 a month and you know until i die and they get to have the business and that’s going to be awesome it’s going to be my retirement don’t do that right you’re also assuming that that person is going

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To manage the business the same way you did or not experience the great times that you did right so we want to make sure that we have a little bit of this action going on back here and we don’t 100 count on our business for retirement it could be a tough one there all right number three uh don’t invest don’t don’t have too much correlation in your investments

Right what we want to do is uh for example let’s say you’re a property manager and you built a nice property management business well we don’t want to have these accounts invested too heavily in residential reits right there’s too much correlation there if you’re a some sort of subcontractor or you have a contract with occidental petroleum for lack of thinking

Of a better company at the moment well then you don’t want to invest too heavily in occidental petroleum that makes sense right you may not want to invest too heavily in oil or that space or other contractors in that space great example that i can give you is i have a client who their family has owned a couple mcdonald’s franchises for generations now and they

Invest their extra money in the suppliers the contractors beyond meats was one of them there the farmers so they’re really correlated to the success of the not only the industry but mcdonald’s themselves try not to do that look to diversify outside of things maybe things you’re not comfortable with or you have to do a little research on but do that that’s usually

Why people do that is they’re just comfortable with the brands they know that they’re successful they know that they’re growing because of mcdonald’s et cetera so careful there i see that one a lot and number four uh don’t hurt me on this one uh plan that your business is actually worthless right for retirement’s sake right so you you know your business is worth

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Money there but for retirement sake plan as if your business is worthless maybe you can auction off some of the equipment or some of the accounts or whatever but ultimately your business is worthless so i want you to do that and if i kind of speak openly with you guys in terms of jazz wealth we obviously will act as financial advisors for clients so that’s one

Thing but i go well what if people like hate us one day right what if i happen to leave the mic on a little long and make a funny joke about jennifer aniston or something and then all of a sudden everybody hates me well then that money’s gone my business is worthless right so what we did is we built the software so we built the front end the back end all this

Great stuff we said well if everybody hates us one day maybe then we could license the software to other advisors i don’t know maybe that’s the case we also have the research site right it’s jazzwealth.com forward slash research maybe if everybody hates me i can still produce research that people would be interested in watching and so that’s something there

As well and of course youtube pays us a few dollars to make these videos so there’s a little bit of diversification there whereas i could pretend that the business was actually worthless uh if i had to so there are your tips for the day know the purpose of your business don’t rely solely on a business for retirement and number three don’t invest too correlated

To your industry if you can and number four just pretend that your business isn’t worth anything in terms of retirement hope that helped you there i hope you learned something and i hope you have a great rest of your friday and a great weekend not a long weekend just regular weekend hit the subscribe button if that did help you out in some fashion there i do

Appreciate you following along and we will talk to you again soon you

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4 retirement tips for business owners. | FinTips By Jazz Wealth Managers