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Whenever the topic of saving for retirement comes up, I am often met with statements similar to the following " I don't earn enough to save for retirement ", " I'm waiting to get a better job before I start saving " or " I'll play catch up when I earn more ", but saving for retirement on a small or low income is very possible.
 

"Saving for retirement on a small or low income is very possible."
 

That being said, here are some suggestions on how to save for retirement if your income isn't quite where you want it to be.

 The best ways to save for retirement when you have a low income:1. Start where you are with what you have & make incremental contributions to your retirement savings over time

Although you might be earning a lower income, you can start by contributing 1% of your salary to your retirement savings and then making 1% increments every quarter, every 6 months or each time your income increases. It's a small amount and after taxes you probably won't notice that much of a difference in your pay check but over the long term, you'll be saving a substantial amount of money that can make all the difference.

 

2. Get the free money, AKA the match, your employer offers

If you work at an employer that offers a 401k or 403b etc and also offers a savings match  - take it. So many people do not take advantage of their employer sponsored match and that's a big mistake because it is essentially free money. If you are just getting started with saving for retirement, you can set an initial goal to contribute just enough money to get the match.

 

3. No 401k? Open an IRA

If you don't have a 401k plan through your employer or are self employed, then you can set up a traditional and/or Roth IRA through your bank or via a brokerage firm. The saving maximums are lower than a 401k or 403b but you can still save a lot money over time, and given time and the power of compounding your money will have a chance to grow substantially.
 

As your income grows you can also open up an IRA in addition to your 401k to increase the amount of money you save towards retirement and further take advantage of the various tax benefits these account types offer.

 

4. Automate your savings

Make saving for retirement easier by making your deposits automatic. You can have the funds auto-debited from your pay check directly into your retirement savings account i.e. your IRA. 
 

401K and 403b deposits are usually automatically pulled from your paycheck, however, if for some reason your deposits are not automated, make a payroll request to make it happen. 
 

Automatic transfers take the stress out of savings and you'll never forget to make a transfer again, plus, you won't get the chance to overthink whether or not you should make the transfer or not.
 

Have an inconsistent income? Just not ready to automate? Then set reminders on your phone around each pay period reminding you to make those transfers to your retirement accounts!
 

***


Putting off retirement savings until you make more money? Not a great idea.

The biggest risk to not saving for retirement as soon as you can or waiting until you are earning more before you start saving, is not having enough money to retire on. This basically means that you could potentially have to work longer than you expected in your old age and/or have to rely on government assistance in order to survive.

By putting it off, you lose valuable time to take advantage of the power of compounding - the key to growing your money long term. So start with what you have now, no matter how small it might be - those small amounts will add up in a big way over the long term.

Bola 

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There is always something scary happening somewhere in financial markets around the world. The sky is always falling somewhere and people always have something to say about it and let's not forget the panic and hysteria that follows.

"Don't invest in the stock market it's going to crash soon. Remember 2008? Look at Greece, look at China."
"Don't buy real estate it's going to depreciate, remember the housing bubble"
"Don't waste your money on small business it's going to fail. Look at so and so"
"Don't do this, don't do that"

With all the nay saying going on, you might as well go to the bank right now withdraw all your money, cash out all your investments and stuff it into your mattress and then put whatever doesn't fit into your pillowcase. Right? Wrong!

If you pay close attention, you'll notice that despite all of these tragedies in the world of money, some people are still able to build wealth and have successful businesses regardless of the market or economic conditions. 

The world of money, like everything else in life has its ups and its downs. Don't let fear keep your money stagnant when it could be working hard for you. If you are able to invest and save for the long term, you'll more than likely weather many storms and come out just fine.


Key things to know when investing regardless of when you do it:
1. Focus on the economy of you

Before you worry about what's happening in the world, you need to worry about what's happening in your personal and family financial situation. This is how you should always make your financial decisions.

  • Do you have an emergency fund in place?
  • Do you have debt you need to pay off?
  • What are your personal financial goals?
  • What are your long term investment objectives?
  • What is your risk tolerance?

These are all things you need to consider when it comes to your investing decisions.


2. Educate yourself

Do not, under any circumstance, invest your money in any stocks or funds or business idea that you do not understand. Do your research, learn as much as you can and understand where you are putting your money before you make any investing decisions. The more you know, the less you fear. 


3. Pay debt, save for a rainy day

Pay off any re-occurring debt you might have and build up your emergency fund before you invest in anything. Why? Because the interest rates on debt can sometimes be much higher than any returns you would make investing. Also because investing should always be for the long term, you want to make sure you have a solid emergency fund in place in the event of unplanned life occurrences this way you don't have to tap into investments when those life events comes up.


4. Plan for the short term

Put any money you need in the short term (less than 5 years) in more stable investment vehicles like certificates of deposits and savings accounts. This money should not be in the stock market right. Also create a plan to recession proof your finances.
 

5. Diversify your portfolio

It's important to have a well diversified investment portfolio to spread out the potential risk of investing and to hedge your portfolio as best as possible from severe losses and that means your investments should not all be tied up in one stock or in one real estate property. You want to make sure your investments are spread across multiple industries and areas so that if one  industry or area experiences a decline, it doesn't completely sink your entire portfolio. When it comes to diversification of your portfolio in the stock market, I'm a huge fan of index funds and you can learn why HERE.


6. Focus on long term investing to build lasting wealth; Don't try to time the market

Think 10 to 15 years or more. Remember, Rome was not built in a day and Warren Buffet did not become a billionaire overnight. Market corrections happen. The DOW will decline. Timing the market is a fool's errand. When you give your money time to work for you in the stock market, it can take advantage of the power of compounding and take advantage of the average rate of the return of the stock market over the long term has been ~ 8% irregardless of the market dips....but the key here is "long term".


But what do you do when the stock market falls or rises?

Stay consistent with your investments and remember your investment objectives (your investment goals). When investing for the long term, look at things this way; During a market decline, the market is on sale, do your research and invest more in areas where you see good opportunity. If the market rises, purchase more conservatively  but don't stop investing. 


What if there is another housing bubble?

You need to think of why you are buying real estate in the first place. Make sure it makes sense. Is it a personal or investment purchase? If you are purchasing for personal reasons determine how long you plan to stay put in the area - renting for the short term might be better if you intend to move soon. If you are purchasing investment property, you want to make sure your rent payments exceed your mortgage and monthly operating expenses so you can be profitable. Learn more here.

When the sky falls where ever you are, don't panic, remain calm and remember, your plan is for the long term. Whatever is happening in the short term shouldn't really bother you because you will have a short term plan - you are paying off debt, building a fully funded emergency account and your other short terms assets will be in safe investments. Long term, your money will continue to work for you and it will weather the short term storms.

Bola Onada Sokunbi
 

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One of the common ways to manage multiple credit cards and pay off debt quickly is by transferring your credit card balances from one or multiple credit cards to a single card that offers a much lower interest rate usually for a fixed period of time - Typically, you'll find balance transfer offers advertised at a 0% introductory interest rate.


While this approach might work if you are trying to save money on interest while you pay off your debt, it is also a huge trap people fall into and this is because credit card companies offer balance transfers and it's associated incentives, as a way to make money.


"Playing around balance transfers can be a very expensive game if you don't have a proper strategy in place."

 


How do credit card companies make money on balance transfers?

Well, it's a pretty known fact that most people do not pay off the balances they transfer before their introductory rate expires which in turn allows the credit card companies to charge more interest than normal based on the agreement you made with them.


This is because the interest rate on your balances after the introductory period is over, can be much higher than usual (details of which are highlighted in the fine print that can be pretty easy to glaze over).

 


The psychology of balance transfers - Why people don't pay off their balances

People don't pay off these balance transfer amounts because they get comfortable seeing the "new" lower interest rate and they think they have now have more time to pay.  


In addition, many people end up increasing their balances through new spending because they think that now that they've reduced their interest, the debt will be much easier to pay off. 
 

 

Tips to create a proper balance transfer strategy

When it comes to balance transfers you should only do it if you have a solid sense of the following key points:


1. You know for sure you will be paying off the entire balance transfer amount within the introductory offer period

In other words, you need to make sure you can afford to pay off your balance in full before the introductory period expires. Have you calculated how much you'd need to pay each month to pay off your balance in full by the expiration date? Here's a calculator to help you out.
 


2. Be aware of the balance transfer fees and make sure they make sense

Many balance transfer agreements require you pay a percentage of your balance as a processing fee e.g. 2% - 10%. So it's important to ask yourself when you do your calculations, if this 2%  - 10% fee is worthwhile (will you still save money?) when you compare your current interest rate vs. the fee amount broken up over the introductory period, assuming you plan to pay your balance in full within that time.


If you run your calculations and find that you can't pay your balance off in full before the introduction period offers, it might actually cost you more money in the long term if you make that balance transfer.



3. Consider focusing of paying off your balance in full where it is now

Again, the credit card companies are not doing you any favors, offering balance transfers is a strategy they use to make the maximum amount of money possible on interest and for the most part - they always win. So don't get into this game without a plan of attack.


If you feel like doing a balance transfer is going to be more trouble than it's worth, don't do it. The short term gratification of a 0% interest rate that is inevitably going to lead to you paying more interest over time is not worth it if you won't be paying off your balance in full before that 0% interest rate is gone.

The surest way to win, is to buckle down and pay off your debt as aggressively and as quickly as possible.

***

Have you successfully used balance transfers to save money on interest while you paid off your debt or was doing a balance transfer more trouble than it was worth? Share in the comments!

Bola

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People talk about this all the time - Being frugal. In a lot of cases, the consistent message seems to be that the only way to really save money is to be completely frugal and enjoy life's "little" pleasures.

But what if you don't want to be completely frugal and you prefer life's bigger pleasures? And what if by personal preference you'd rather buy brand name Frosted Flakes instead of the generic store brand that doesn't quite taste as good? Or what if you'd rather take a fabulous vacation abroad instead of vacationing at home? (random, I know but stay with me).
 

Is frugal living the only way to build real wealth?

Before I continue, let me just state that being completely frugal is not a bad thing and I have absolutely nothing against frugality but at the same time, I want to enjoy some of life's bigger pleasures like...expensive handbags, fancy afternoon tea that I don't make and fabulous vacations (Sorry but I'm not sorry) and so complete frugality does not work for me personally. I'd rather pursue frugality in a partial way. 

So how do you practice partial frugality? Well here are a couple of examples:


How to practice partial frugality
Example 1: Plan & prioritize your spending

Perhaps you'd really prefer to have your fancy brand name cereal as opposed to the generic store brand. Well then your partially frugal self will need to go shopping equipped with a fixed list (which includes your fancy cereal) and fixed budget that does not allow you to deviate by buying other items that are not on your list. i.e. you cannot go to the grocery store and be like "ohhh look at it this new Ginger Peach Apple Onion Mango Potato flavor of tea for a mere $12.99 that I just randomly walked by looks really good I should try it!" ummm...........negative.

 Example 2: Delay gratification

 Similarly, If you decide you really need to own a designer handbag for  $@#&#?? (unmentionable price) then you cannot be in the mall every Saturday buying trendy crap. Instead you should be funneling all of your "spare" money (Note the keyword here - spare, defined as money left over after your bills and debt are paid and your savings are in order) to your designated designer handbag bank account and focus on that alone.

In summary, You don't have to be completely frugal all the time. Pick where you want to splurge and practice frugality elsewhere to make up for it. Sacrifice the things you don't really want or need for the things you truly desire.

 

Remember  - it all boils down to discipline.

Your thoughts?

Bola Onada Sokunbi

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Did you know that there's a big chance that you might be overlooking some tax deductions which you may qualify for especially if you file your taxes yourself? In this post, I'm sharing some of the most commonly overlooked tax deductions that you should keep in mind when you are filing your taxes so you don't leave any money on the table.
 

Commonly forgotten tax deductions and credits
1. Your tax preparation fees

You might qualify to deduct the cost of your tax preparation as long as this deduction is for year in which you paid for the tax preparation.


2. Contributions to charity and/or volunteering at a charity

If you gave to money to a charitable organization as a donation, you can write this off on your tax return. In addition, if you volunteered at a charity and incurred mileage or travel expenses as a result, you might be able to include these costs asa tax deduction.


3. Child care costs

If you have a child or dependent under the age of 13, you may qualify for a tax credit on your costs for day care, having a babysitter or au pair, summer camp etc which could add up to 35% of qualifying expenses up to $3,000 for one child or dependent OR up to $6,000 for 2 or more children or dependents.


4. Uniforms for work

Work at a job where uniforms are required? You may be able to claim a deduction for the amount of money you spent on your uniforms and also on laundering services if your employer does not offer a reimbursement.


5. Sales tax or income tax

You have the option of deducting your state and local sales tax OR your state and local income tax which you paid over the year. What makes most the sense for you would depend on where you live and how high or low your state income tax or your state sales tax is. For example, if your state income tax is very low (or there is not at all), it might make more sense for you to deduct the sales tax. Be sure to have records!
 

6. Mortgage interest

If you own a home, you are eligible to deduct the interest you paid on your mortgage as long as the loan was $1,000,000 or less.
 

7. College credit

You may qualify to claim a Lifetime Learning Credit for any or qualified tuition and associated expenses paid for students enrolled in eligible educational institutions as long as your income is less than $65,000. This credit is worth up to $2,000 per tax return per year. This applies to for qualified education expenses you pay for a dependent child as well as for yourself or your spouse.
 

8. Investment fees

All of your investment related expenses such as commissions paid to brokers, custodial fees and other investment related expenses can be filed as deductions on your tax return.

***

Be sure to check the IRS guidelines or talk to your tax preparer for specific details before you file any of these deductions to ensure that you meet the qualification requirements. It's also important that you have proper documentation and records for any deductions that you file for.

Getting a tax refund? Check out this blog post on how to plan out that money.

Here's to NOT leaving any money on the table!

Bola

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Receiving a tax refund check can make a big difference towards improving your finances and achieving your financial goals, so it's a good idea to create a clear plan for what to do with your refund in advance of receiving it this way all that money doesn't just slip through your fingers unaccounted for.


Here are 6 things to do with your tax refund that can make a huge difference for the better when it comes to your finances. Depending on your unique financial circumstances, you may choose to do one or a combination of the suggestions I mention below:


1. Pay off your high interest debt

Your tax refund check can make a huge dent in your debt repayment process and help accelerate the timeline in which you are able to pay off your debt. Now wouldn't that be awesome? If you've been on the fence about whether to use your refund to pay off debt or not, go ahead and do it - you won't regret getting closer to your debt freedom.

 

2. Bulk up your emergency savings

Having a fully funded emergency fund can contribute to your financial peace of mind and more importantly help you weather an unplanned circumstance or emergency e.g. your car breaks down, unforeseen medical expenses etc. Using your tax refund to bulk up your emergency savings can go a long way.

Save your tax refund

Invest your tax refund

 

3. Invest in the stock market

Your tax refund could be a great way to get started with investing in the stock market if this is something you've been considering. You can either open up an account with a major brokerage firm or use a robo-advisor and start investing in things like index funds and ETFs. It's important to do your research before you start investing and at the very least have a basic understanding of how the stock market works. Here is one of my favorite investing books for beginners.

 

4. Catch up on your retirement savings

If you contribute to an IRA or other type of retirement savings, you can use your tax refund to increase your retirement savings if you haven't quite maxed out your contributions for the prior year (You have until the tax filing deadline in April of the following year to max out your contributions for the prior year).

A couple ways to do it: 1) You can pay your contributions directly to your IRA or  2) you can increase the automatic deductions your employer takes from your pay check for a couple pay periods until it equals the amount of your tax refund.

 

5. Put money towards a short or mid term goal

Thinking of starting a business? Saving to buy a house or car? Putting your tax refund towards your short or mid term savings goal can help accelerate how quickly you are able to achieve your goal.

 

6. Invest in your personal development and/ or help others

Investing in yourself is always a sound investment especially if you invest in things to improve your knowledge or skill set. It could be courses or certifications to help you get a better paying job, help you do better at work or help you excel in business. 

You can also consider giving to charity or to a worthy cause that you are passionate about - the process of giving back in itself has it's own rewards!

***

 

It's all about putting your dollars to work for you and having a plan in advance will make the process so much easier - with a plan in place, you are less likely to blow your refund on frivolous or unplanned items.

So what are your plans for your tax refund? Leave a comment below!
Bola

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Ideally, your wealth building strategy should be a based on a combination of four actions taken consistently that I would describe as the four pillars of wealth building and they include:

The four pillars of a solid wealth building strategy
  1. Reducing your expenses (debt, living expenses etc)
  2. Budgeting properly
  3. Increasing your income
  4. Putting your money to work for you the right way


Increasing your income allows you to pay off your debts faster, save more and invest more. It can greatly accelerate the time it takes for you to accomplish your financial goals so much more than if you were just solely focused on reducing your expenses.

So let's talk about the 3 types of income and different avenues through which you can increase your income and accelerate your wealth building journey.

 

The 3 types of income

You can earn income in one of 3 ways and they are:

  1. Through active income (also called earned income)
  2. Through passive income
  3. Through portfolio income

 

1. Increasing your income through active income streams

Active income is defined as the income you receive for performing a service or for trading your time for money. The money you earn from going to work for an employer or working in a business everyday is a form of active income because you are trading your time and your services for the money you earn.

Specific example of passive income include your paycheck. commissions, bonuses and tips.

You can increase your income through active income streams in the following ways:

  1. Getting a better paying job in exchange for your time and work skill if you are employed
  2. Getting a part time job in additional to your full time job
  3. Starting a side hustle or full fledged business
  4. Increasing the prices you charge in exchange for your time and services if you are a business owner

 

2. Increasing your income through passive income streams

Passive income is defined as income your assets earn for you without you having to exchange your time or services for it i.e. your active participation is not required and is commonly associated with real estate or business. For instance, receiving rent from real estate each month where no major effort has taken place for you to earn that money is a type of passive income.

More specific examples of passive income include royalties, interest income paid on bank account balances, network marketing, affiliate marketing income and other types of business income.

You can increase your income through passive income streams in the following ways:

  1. Putting in the initial ground work to add a passive income element to your business such as a eCourse or automatically delivered service or product (e.g. a  book on Amazon) that does not require you to be involved.  
  2. Become an affiliate for a product or service that you share with your network or audience base but the service delivery is provided by a 3rd part and you simply earn money for your referrals.
  3. Investing in rental real estate and charging rents that not only cover your expenses but net you a profit.
  4. Peer to peer lending (P2P) where you earn interest on the money you loan to others.

 

3. Increasing your income through portfolio income streams

Portfolio income is income that you earn from your investments. For instance, the money you earn from selling stocks in your stock portfolio at a profit is considered portfolio income.

More specific examples of portfolio income include interest, capital gains, dividends and royalties.

You can increase your income through portfolio income streams by investing in company stocks, bonds and various types of stock market funds with the goal of having your investments grow over time and in turn earning you portfolio income.

***

Having a combination of these different income streams and ideas in place is a great time because not only will you have multiple streams of income (the average millionaire has 7), you'll also have a nicely diversified portfolio.

It is also important that with every income stream or investment you pursue, you do your research in advance so you are well aware of what you are getting into including any associated risks.

How many streams of income do you currently have? Share in the comments!

Bola

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Sami is the blogger behind www.eatpraybudget.com and in this money story she shares how she went from thinking she would never be able to pay off her student loans until she was in her 50's to paying off almost 196k in debt alongside her husband in just 18 months. She talks through the specific things they did, how they stayed motivated and what they intend to do next now that they are debt free. Enjoy this interview!

What was your "enough is enough" moment?My husband kept saying, we make way too much money to be this far in debt. In the back of my head, I was thinking that we could never pay off my student loans.  I honestly expected to be paying on those well into my 50’s!

Then one day in church they announced a personal finance course so we signed up.  I’m not sure we had a major “enough is enough” moment, rather an opportunity to improve so we jumped on it!


How much debt did you pay off in total? 
We paid off a total of $194,683.52 in 18 months. During that time we only had $1,000 in savings but are now working toward buildings that savings. We hope to have 6 months of expenses saved by the end of the year.
 

How much income were you earning when you accomplished this?
When we started in January 2016 we were earning about $120k.  We had an approximately $8k increase in salaries between then and our debt payoff date of July 28, 2017. By our debt free date, we were living on less than half of our income each month so that we could pay off debt with the rest. 


What specific things did you do to save or pay off your debt?
We started zero based budgeting and actually sticking to our budget. We started to pay with cash for things like groceries and entertainment. Paying with cash really helped us stick to the budget. We cut expense anywhere we could and ended online shopping. We also sold an investment property we owed money on, we weren’t living in it and although we were receiving rent income but the sale helped boost our debt pay off substantially. 
 

How did you keep yourself motivated?
We have a small chalk board up in our kitchen that tracks our goals. It is something we see every day and are excited to update with each paycheck. We also keep motivational pictures on our phones so that we can reference those when we’re experiencing a moment of weakness.
 

How did you manage the days where you just wanted to go out and spend money?
My husband had a side hustle and I started one so we focused our time on those. We spent little money and a lot of time on both side hustles which kept us from being able to go out and spend money.
 

What would be your money advice to your 21-year-old self?
I would tell myself to take the time to learn how to handle my personal finances properly. I’m an accounting major with an MBA so I thought I knew what I was doing. There is a big disconnect from what we’re all taught in school and how we should really be dealing with our personal finances. 


What steps are you taking to ensure your debt freedom is permanent? 
We have made the decision to never go back into consumer debt again. We’ll certainly take out a mortgage after we have at least 20% for a down payment but car loans, credit cards, and other debt are a thing of the past. 

To ensure this debt freedom is permanent, we have created savings goals for things that we’ll eventually want to buy like cars or other big ticket items and we’re focusing on those goals.  We’re also fighting the norm in our consumer driven society to keep up with the Joneses. 

We’re just putting our heads down, budgeting like crazy and working hard to save our hard money responsibly. 


What advice would you give anyone reading this looking for encouragement?
Start today!! Take the leap and get started. It is no accident that you’re reading this so if you’re looking for a sign, this is it. Don’t wait until you hit rock bottom. Take control of your finances, do the work, educate yourself and before you know it, you’ll be achieving your goals. We’re regular people who simply set goals and focused on those. You can certainly do it too!  

Thanks so much for sharing your amazing story with us Sami! You can keep up with Sami on her blog www.eatpraybudget.com or on InstagramPinterest, Facebook and  Twitter.

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In this interview Emma shares her story from being a police officer to becoming a 7 figure business owner. She share's her biggest challenges and also her successes but one thing that stands out is Emma's mindset - which is critical for anyone who wants to succeed in a major way. Her advice is super valuable. Enjoy reading!

"No one can ever ever ever become successful if they've never had a vision or thought they were going to be successful. That's FACT."

 

Please introduce yourself and tell us about your business. What is it called and what services and products do you offer?
My name is Emma Cooper, I'm 35 years old and I work in the network marketing industry alongside Forever Living Products as well as running my own traditional business' that my network marketing has given me the income to invest in. 

I have a planner business My Pro Planner and also my family and I are very new YouTube vloggers - The Family Loves.
 

Can you share a bit about how you chose this line of business? What transition did you make to owning your own business? 
I had never actually heard of network marketing. I was a Police Officer & so was my husband. Between us we had served 17.5 years in the UK Police service.

I was 30 weeks pregnant and scared to start my maternity leave because I was terrified about going back to work afterwards. We didn't have much money and I knew that I'd have to go back to work after my son, William, was 6 months old - the thought terrified me.

A friend of mine had told me 4 years previously, that she could help me earn an extra income outside of the police. I was so dismissive...I turned my nose up, "I'm a police officer don't you know" was my attitude. But I watched her on social media, her life looked amazing and extremely flexible. So I finally got in contact with her when I felt desperate as my maternity leave was looming ... saying, "Come on tell me exactly what I have to do".

I worked so insanely hard for 2.5 years but I didn't miss a second with my son, I saw all of his firsts which I would never have done as a police officer. I resigned from the police within 6 months of me starting my business because my income grew to 5 times my monthly police salary. My husband went on a career leave to join the business and then resigned another 6 months later. The income became 1.5 times in a month more than I was earning in the police in a YEAR. This also allowed me to set up a business I'd always dreamed of - to design my own planner. 
 

Do you have any special training? 
I have ZERO special training. I'm completely self taught. I left school with no qualifications pretty much. I interviewed for over 50 jobs and got told no by every single one...even making tea at an accountants office. I was at the lowest that low could get. 
 

What are some of your biggest accomplishments as a business owner?
As a business owner my biggest accomplishments have been:

  • Building one of the top 5 business' in the world with Forever Living Products - the network marketing company I'm with. Just being little old me, a cop who had a dream and a mummy that wanted to see her son grow up. It still now blows my mind.
  • Earning over £2.5m - not dollars -  in the last 3.5 years just still seems insane to me...or that it's even me. But it makes me realize that by having not only a dream but a work ethic too, it's possible for anyone. 
  • Valuing my time greatly. I only want to work with people who are serious about making a change. Whether that's $100 extra per month or $100,000 extra per month. If you have the commitment I'll work with you.  


How soon after you started did you start seeing profits? Or when do you project to begin earning a profit?
In my industry I was lucky. I didn't have to set up the company myself or do product testing, make marketing materials etc.. it was all done for me. I bought my first product pack at £200 and I earned the money back selling it in 2 days, so I went straight into profit. 


What mistakes, if any, have you made with your business?
I have made so many mistakes I wouldn't care to mention or that would probably bore you. I have not valued my time being the first one. So many people say that they want to change their lives and they're excited etc but then don't do the basics that are taught in step 1.

So I've learned how to set expectations. If you do step 1 we'll move to step 2 together etc. allowing an amount of accountability. Otherwise you'll think you're going mad and that you must be special and you're the only one who can be successful. Until you have something to judge and be held accountable for, there's no consistency or effort or compound effect or real want going on. 


What have some of your biggest challenges been?
I have had challenges in all of my businesses. I've had people leave to join other people, people saying no, people saying negative things, I've been in the newspapers in an unfavorable light, I've had a lot of people internet trolling me, I've had crazy people who want to work with me - I've had the most absurd challenges but my goodness did they put me to the test.

They made me realize, I am flipping normal and these other people are mad! lol. They made me really think about me as a person and why I'm doing what I'm doing. It made me come to the conclusion that I love what I do, I want to help more women like me and I want to help people who want to make a change... seriously!


What do you consider the most important elements of running a successful business?
I consider the most important element as mindset.  No one can ever ever ever become successful if they've never had a vision or thought they were going to be successful. That's FACT. So surely the first part should be working on yourself until you believe it. 


Do you have any start-up advice you can share with women reading this who would like to launch their own businesses?
I feel running the most successful business is way past strategy, marketing, business minds etc
It's to do with people, and so many get this so wrong. You have to put out good in general before you get good back. We all know that concept about "The secret" or "The power". The ability to learn about leadership and apply it. Simply learning but most importantly putting into action everything you learn which most people don't. 

Advice - Please don't underestimate running your own business. But also please don't squash your dreams because you feel like you don't know it all. You have to be willing to learn and to work hard. Most people lack the work ethic to actually do anything about the situation they're in. Don't be that person. Be the person willing to change anything and everything if you want to change something that's important to you.


How do you balance work and life owning a small business?
A struggle. I have a 3 year old and I can't lie I find it absolutely challenging to be polite. I do not get a minute's peace, he talks constantly lol. However,  he is my son, I work hard to show him that if you work hard in life you get these amazing things that you're seeing - they don't just come easily . I think that's an important lesson to me. Make sure you show the process, show what it takes. 
 

Please share a fun fact about yourself
The fun fact about me I guess is that I can write backwards at the same speed and neatness as I can write forwards! 

Thank you so much for sharing your incredible journey Emma! You can keep up with her on Facebook here and here and also on Instagram here.

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As a mom to twins, one of my financial goals is to be able to support my kids when they go to college and as a result, I have a couple things in place to support this plan. I have split college savings for each of my children between custodial brokerage accounts and 529b plans and this article provide an overview of both account types.


What is a custodial brokerage account?

A custodial brokerage account is fairly easy to figure out in the sense that (in my instance) it is simply an account that an adult controls for minors under the age of 18 (in some states 21). In my custodial accounts, I can invest funds in the stock market towards designated financial goals I have set for my children with saving for college being one of them.

There are a few very important factors to keep in mind with custodial accounts and they include the following:
 

Important factors to consider with a custodial account
  1. When you transfer money into custodial accounts the money is no longer yours, it now belongs to your child and you are essentially the custodial manager. This means legally, you are only allowed to use the funds in this account for expenditures that benefit your child, not yourself.
  2. Once your child reaches age 18 or age 21 (depending on the state) they are no longer a minor and will gain full control of the account, so it's important to begin teaching your children financial responsibility as early as possible.
  3. Your child might need to pay taxes on any income the account makes and file a seperate federal tax return if that income exceeds $1,000, unless it's income from interest, dividends or capital gains - this you can include in your own tax returns (It's best to clarify this with a qualified tax accountant).
  4. You might be required to pay gift taxes if you put more than $14,000 a year into a custodial account for each child.


The next type of account I have for my children is 529b savings and this is slightly more complicated.


What is a 529b account?

A 529b is a college savings plan that is sponsored by a state or state agency in which you can set aside funds for your child to be used towards their future college expenses i.e. tuition, books and other educational expenses. These funds can only be used at accredited 2 or 4 year colleges, vocational and technical schools, or at eligible foreign colleges. Contribution limits are typically between $300,000 and $500,000 depending on the state.

529b's are typically set up by state but you have the option to open a 529b in a state different from where you live. Some states offer special tax deductions if you open a 529b in the state where you live but you want to make sure you are aware of all restrictions on the account including where your child can attend college as well as the fees and expenses you will be paying in comparison to the tax deduction you will get.

For example, I chose the New Hampshire 529b plan although I live in New Jersey because under this plan my kids can go to college anywhere in the country and at the time of writing this my state does not offer any sort of tax deduction or incentive around the 529b.


Benefits of the 529b

The main benefit of having a 529b in place for your child is the tax benefit. Once your begin making contributions, your earnings can grow tax deferred and if the money is used for qualified education expenses (as mentioned above and which is the purpose of the 529b)  then those distributions will not be taxed by the federal government.
 

Taking money our of a 529b

You may take money out of a 529b at any time for any reason but if the money is not being used towards your child's college education expenses, then it is subject to income tax as well as a 10% federal tax penalty.


How your money is invested in a 529b

Since the 529b is a state sponsored program, your money will typically be invested on your behalf by established brokerage firms (where you can open your 529b account) in a variety of funds and you can pick what plan works best with your objectives for your child's college savings.

One of the most popular approaches is to select that your funds are invested based the age of your child. This approach starts out investing more aggressively but as your child approaches college age, the investment mix get more conservative moving more money into cash and bonds vs. funds.

Alternatively, you can create your own investment mix from available portfolios offered by the brokerage firm in their 529b plans.

***

Are you saving for your child's college education? Do you have a custodial account or 529b in place for your child yet? Leave a comment!

To take a deeper look into 529b, visit the IRS website here.
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