Episode 73: Securing Your Future As An Entrepreneur

Episode 73: Securing Your Future As An Entrepreneur

Are you creating a business or are you just giving yourself a job? Because if you cannot step away from your business, you just have a job, and you maybe work for yourself, but it really is just a job. And what I got very interested in was, how do I take the cash that I’m making when the business is doing well, and invest it so that it’s there when I need it, because there’s the investment for the long-term, but as an entrepreneur, sometimes you have those days where you just need money today.

Susanne Mariga:Welcome to the Profit Talk Show. In this show, we’re going to explore strategies to help you maximize profits in your business while scaling and creating the lifestyle that you want as an entrepreneur. I am your host, Susanne Mariga. I am a Certified Public Accountant, a Certified Profit First Professional and a Certified Tax Coach. And today, we’re going to talk about strategies to help you maximize profits in your business. 
Susanne Mariga:Hello Profit First Entrepreneurs and Thought Leaders. I am so excited because we have a special guest today. Her name is Tara Nolan. Now, Tara offers a unique and specialized approach to really looking at life and reinventing yourself. Tara has actually been a member of the US air force. She’s actually still a member serving in the US air force. Hats off for Tara for that. And she combined 26 years of strategic military planning with her knowledge of entrepreneurship, finance, as well as personal development to write transformational talks. And, she specialized in helping smart people who have limited time due to business and family demands really achieve and retain the lifestyle that they want. Now, Tara is the owner of Nolan Financial Services. Today, we are going to talk about really securing your future as an entrepreneur. So, please join me in welcoming Tara to the platform. Hi Tara, how are you?
Tara Nolan:Hey, Susanne, I’m so happy to be here. I get excited talking about finance and entrepreneurship. So, I’m really looking forward to this conversation.
Susanne Mariga:This is a big and important topic because if you don’t make steps along the way to start building your future, when you get there, and you’re ready to retire, it won’t be there for you especially as entrepreneurs, a lot of entrepreneurs think that when they’re building a business, that it’s their retirement, and they don’t realize that there’s a necessity to really diversify their assets. So, when you’re in Profit First, and you’ve got all this cash, we need to be really putting in away. So, typically in order to do what we needed to do, we needed to do it right.
Tara Nolan:Absolutely. I started out as an entrepreneur before I got into investment and finance, and one of the things that really resonated with me at the time is, are you creating a business or are you just giving yourself a job? Because if you cannot step away from your business, you just have a job, and you may be work for yourself, but it really is just a job. And what I got very interested in was, how do I take the cash that I’m making when the business is doing well and invest it so that it’s there when I need it, because there’s the investment for the long-term, but as an entrepreneur, sometimes you have those days where you just need money today. And so, how do you put money into an investment that is going to be accessible when you need it?
Tara Nolan:And so, it’s looking at all these different pieces. I don’t know exactly how you started out early on, but in the military, you’re a W2 earner. And so, you get used to that paycheck every month. You wake up in the morning, and you’re going to get paid. It’s a good government job. And then, you make the shift to be an entrepreneur, and all of a sudden, if you don’t get someone to give you some money, you don’t get paid. And so, you go from this space of just because you’re busy, doesn’t mean you’re getting ahead or working.  It’s like looking at how do you have your business and putting it aside? Because this is one of the goals to have that passive income stream.
Susanne Mariga:Definitely. No one wants to work forever. 
Tara Nolan:You want to, but not because you have to.
Susanne Mariga:Exactly. So, Tara, tell us about what goes into really building a secure future as entrepreneurs. What should we be doing on the everyday in order to start building that?
Tara Nolan:Well, I love this question because what you really need to do as an entrepreneur is, you have to build your team when you’re starting out with your business. You’re small. So, it’s you and yourself. And then,  you start to realize you can’t do it all yourself. So, you start hopefully bringing in the virtual assistant and bringing in the CPA to help with your taxes. You start building those people, and it’s hard because you’re starting out, and you’re like, “I have no money, everything I have needs to go into the business. I can’t build this team,’ so, you have to find that balance to say, ‘if you want to get to that next level, who else do I bring to be part of my team? So I can focus on the business and what I’m really good at,” but then all the other things that still have to happen still have to happen. And it’s hard because like a GE or Apple, all these big companies, they have human resources, and they have their tech support. They have all that. As an entrepreneur, it’s small, but you still have all those needs. And so I think one of the biggest things you have to start thinking about right away is, “What do I need and what help can I get and how do I access that help in a way I can’t go bankrupt paying for the help?” It’s that chicken and egg kind of question.
Susanne Mariga:Exactly. You have to get your business stable. That’s the first thing. And making sure that it can scale so that it can produce those cash flows to be able to grow for you. So the first step is to really start to build your foundation, build your team and get the resources behind you. What are some tips that we need to do in order to do that?
Tara Nolan:I’m a big believer in it starts with asking a good question because sometimes I think in finance, especially as it relates to your business, you don’t know what you don’t know. And so, that’s where it starts. There are 3 questions I always encourage everybody to be asking so that if you don’t know the answers to these questions, here’s where you start. So, the first question is, how much is enough? Do you need 1 million or 10 million? Or, what is the number? Because if you don’t know what target you’re aiming for, you can’t make a plan to get there. So, how much is enough? And I think there are almost levels like there’s how much you want. There’s a little bit lower level of this will cover my basic needs. And then, there’s the goal of what you really want to get to, but you need to know what that number is.
Tara Nolan:That second question you need to ask is, am I on track to get there? So, let’s just say your number is 10 million, and you’re here at the starting. It’s never a straight line. You think of that X, Y graph. You never have that nice straight line. So, you have to start thinking about how am I going to get there? And when you’re starting a business, it’s more like that little loopy gain from candy land or chutes and ladders, where you go, and then you’d go down, and you go back up, and you go around. So, you have to figure out here’s where I’m trying to go. And you look at it at least once a year ago, “Hey, am I tracking? Do I need to adjust and figure that out?” And then the third thing is, am I paying too much in taxes? You know this as a CPA with the laws that are in place today, it’s not about how much you make, it’s about how much you get to keep. You can go through, just look at how much legislation has impacted, how we’re able to save for retirement, what the pension availability is. It’s just almost like crazy because it’s not really about math or the stock market, it’s really about the tax code. It’s like almost the driver for a lot of the decisions we have to make.
Susanne Mariga:Definitely. The more you save on taxes, the larger database that you’re going to be able to reinvest. Definitely like Warren Buffet. What he says is he pays less taxes than his secretary. So, the lower you can get that bracket the better off you can, the more you can defer that, the better off you’ll be. And so, Tara, I guess in terms of securing your future, what steps should we take to do that?
Tara Nolan:So, the first thing is, it really starts with trust because I think I Googled financial planners online and there were 215 million. So, how are you going to start through that? That’s crazy. Referrals are great, but you want to find a planner that you’re going to trust because it’s very personal. Money is so much more emotion and much less about math. And, someone’s going to get in your space. It’s almost like finding a doctor that you want to work with because it’s going to get very personal, but you’re going to find someone that’s that you’re going to trust. And here are two questions I like to ask when you’re interviewing for your financial planner. One, do you know how to give my money a job? And I find good financial planners understand this idea, but you’re working hard for your money, so your money should be working for you, too. 
Tara Nolan:The other question I would ask is, how many jobs can my money have? Think about money in your bank account. That bank account has one job, it’s to be ready for emergencies. It’s liquid, you’re not really going to earn any kind of rate of return. Once it’s spent, it’s just gone. Let’s think about an IRA. An IRA has two jobs, it’s growing in a tax advantaged account. It’s going to be mostly protected from lawsuits. So, right off the bat, two jobs. And then, you can go on and think about like real estate. In real estate, you’re going to be growing some equity. You have an asset that is there for you. You get to take tax deductions from the property. Once you have this pot of money, and you need to grow it, there are different ways to grow it. What you’re going to want when you’re looking for as an entrepreneur in your financial planner, someone who understands that there’s a whole lot more to life than setting up an IRA and buying some insurance. Those are good things, but that’s not everything.
Susanne Mariga:So what other things do we need to consider with that? Because it’s important to make sure that you partner with the right people that you know can really help you set your business up for success with that. Once you find that perfect partner, what are the next steps with that?
Tara Nolan:Then the next thing is, a lot of it is really becoming aware of what your financial baggage is. We all have it from however you grew up with your family. Some people are lucky, and they learn about money as a kid. I was not one of those people. So, I’ve had to spend a lot of time playing, catch up as an adult. Figuring out what those things are, it’s really interesting how people have like a good example is I have a lot of clients that have the spreadsheet in their head that is unique to them. And so, the way they categorize and organize money and put it together is very unique. And we all have little quirks like this. So, you want to become aware of what your little quirks are so that you’re not making decisions about money that don’t make sense. 
Tara Nolan:One common thing I see a lot of people do is, they’ll put a bracket around money that like this is set aside for the special event. And then, that special event will just never materialize. This money doesn’t end up working for them though. They like to have it just stuck in a bank account. So, you want to make sure you’ve identified any resources because one of the first things to do is look at your entire financial world. Let’s say it was a pie, and you want to make sure that you don’t have any money tucked away, sitting somewhere not working for you. First, before you start saying, “Well, I can’t go to Starbucks anymore.’ You want to start going, “How do I maximize?” And then, here’s the thing with young people and entrepreneurs is you go, “I don’t make enough money right now to be investing because I have to be putting the money back into the business,” or younger folks, “I’m paying off my college debt.”
Tara Nolan:Just like working out, you got to start a habit. Even when you get started, even if it’s just 50 to a hundred bucks a month and then growing, you want to create these habit patterns where you have automatically money is growing, going into your savings account, going into your longer-term investments, going into those investments because there are different tools, especially for entrepreneurs that I would talk about with you, one-on-one that allow you to grow your asset, but then give you access to the money when you need it. So, starting your habit pattern right now is imperative because the time right time is your biggest friend. You can hear about your buddy at work that’s talking about, “Well, I invested in GE stock or whatever,” it was amazing. I’ve gotten into this groundfloor.com and that was amazing. You never hear the bad stories, you only hear the stories about when people did amazing. The best thing you do is, you start a process that you stick with. It’s not glamorous or sexy, but that’s what you need to do.
Susanne Mariga:I love that. That is really neat. And you’re right, it’s that power of compounding returns. A dollar doesn’t equal a dollar in 30 years. That can be four or five times what it was when you first started. I remember when I first started my career at Anderson, I was like 20 to 23 years old, and I ran this amortization table. They work for you guys out there to figure out how much do I need to put in order to be a millionaire by the time I think I was like 50 or something was my goal. When you’re 23, that 50 is like so old, and it ended up being like $33 a week. Just put away $33 a week and become a millionaire. If you said it was 12% interest rate or 12% growth per year, and it’s amazing just what those little things that you do, those little haves like you said, I don’t know if Starbucks will kill you today or tomorrow, but just putting away, that a little bit every single week and being consistent about it.
Tara Nolan:It’s not magic, and it is hard because I know when I was in the air force for a while, and then I was like, “I’m going all in, and I’m going to start my real estate investing business.” And, I can wait, I can spend time the next 15 years trying to figure it out, or I can just invest in education and learn. And, I did probably not the best thing, but I wiped out all of my 401ks. They were just gone. I wouldn’t probably recommend that to my clients now because you pay the penalties, and you do all that. But the thing was I did that, and I have recouped that because for me, investing in myself early on versus taking 20 years, 10 years to figure things out was the way to go.
Tara Nolan:For me, it’s such a different world. When you have a W2 job where you’re getting a paycheck and that’s kind of how big your world is because that’s paycheck. And for an entrepreneur, it’s like this rollercoaster where you all of a sudden you’re eating macaroni and cheese and digging through the cash cushions for money. And then, you take off, you make all this money, and then you go, “Oh no, what else? What am I going to do?”  And you have to figure out how to manage that. And it’s interesting because some people are not good at that. My dad is my biggest example of he just can’t stand to have money. It just burns a hole in his pocket and he’ll spend it. So, as an entrepreneur, you have to have that ability and that place to go when you make your money, where are you going to put it? And it’s good to know that before you make your money.
Susanne Mariga:Exactly. That it’s true.
Tara Nolan:If you wait until after you’ve made your money, then it’s a little overwhelming. It’s almost like those people that win the lottery. 
Susanne Mariga:And that’s why I like Profit First, too, Tara is because in Profit First, we’ve forced our business owners to pay themselves first. We forced them to take a salary. We forced them to make profits, and we forced them to put away for retained earnings. And, of course, we celebrate every quarter with that shareholder distribution, or a dividend that happens when we take half of it. And we either, if there’s no debt, we get to celebrate. I’m buying a piano on my first one, but one of the things that I like to see is, not just paying yourself first, but with a lot of times we have direct deposit for our employees, and literally just set it up the same way for you. You have direct deposit that goes straight into your investment account.
Susanne Mariga:And, you have part of the money, and it goes into your own account, but there’s a set aside, would it be a percentage or dollar amount that always goes towards that retirement account. And you’re just creating that habit where you’re building wealth. If you do it by percentage of income, it’s like Tara says, “When you have no money, you got a little bit going in, but when your business really takes off, when you got a whole lot more than you’re putting away more in, your investments are growing with you, too.” What Tara said, too, that sometimes investing doesn’t necessarily in stocks and bonds, it could be investing in your career, or investing in your knowledge and your space, and understanding how quickly are you going to get that ROI that compared to if you didn’t make that investment, too. So, a lot of really good golden nuggets with that, too.
Susanne Mariga:As a CPA, as a Profit First Professional, we’re really great at setting up systems to reach the ultimate goal. I think the financial advisory side is like a completely different side. I can recommend mutual funds and things that I do, but definitely a professional like you is more important in terms of actually looking at the portfolio, making sure that it performs the way it needs to perform so that that someone can retire when they want to versus when they have to.
Tara Nolan:Well, like you’re saying, to me, a CPA is critical on my team because I know the big questions to ask, but you get paid the big bucks to keep up with the law every year. And, it was life changing for us in our real estate business. When we went from a tax preparer who was doing things right to our CPA, who specialized in real estate, he’s like, “I see how you’re doing it, but if we just made this and this and this change, it saved us so much money,” and it was all legal, we weren’t doing anything illegal, but it was just because there’s that flexibility and working with the professional that really understands and goes, “Okay, you told me your goal is to get here. Well, let me help you get there because it’s about creating that best path to get there.” And then, just like a CPA, I have a health care specialist. I don’t try to be the expert at everything. I don’t have to be the smartest person in the room. I just have to know where they are.
Susanne Mariga:Exactly. I always figure it out. It’s about how do I get there the fastest and the best way. Sometimes that means me picking up a course and learning it myself. Sometimes it means finding someone else that’s going to be a whole lot better than I will ever be, added to have them do it. With my husband and I, what we did early on was one of the great things about if you buy your home at some point you will have no mortgage, and you will always have a lock fixed in payments. So, you’re not going to deal with rent goes up every year. It’s a fixed payment. And so, we literally were able to lock in our living expenses, which was really neat.
Susanne Mariga:And what we did was, when we first started our career, like 20 years ago, we were always going to live off like $40,000. What it did is as we got raises, or we made more money, it allowed us to invest more, and put away more in retirement. It was just being disciplined about, this is how much we live on. We might do a little teeny weeny increase for cost of living. But then eventually you’ll pay off the house., and literally that was another way that we did first from a strategic standpoint in terms of being able to retire and make sure that we got in the habit of putting away money. Now, Tara, tell me where investing goes wrong. Where does it go wrong in your experience with working with business owners and entrepreneurs? Or, even just regular clients really with it.
Tara Nolan:I can tell you exactly where it goes wrong. Investing goes wrong when you just do what you hear somebody else saying they’re super excited about, or when you have a solution that’s not solving your problem. I can give you a great example just happened last week. One of my clients came in, and he was really excited, and he was like, “I want to use municipal bonds for my emergency fund. The guy at work is doing them, and they’re tax-free.” And I said, “Well, tax-free is great. I like tax-free. But did you say emergency fund?” He said,  “Well, yes  because it’s tax-free.” I said, “Well, here’s the thing. An emergency fund is there when you have an emergency, and you need to get money quick. Have you researched these bonds? How quickly can you get the money?”
Tara Nolan:“Well, I don’t know, but they’re great.” So, we just talked about it. I said, “Why don’t we look at your plan because we can certainly incorporate some municipal bonds in your plan because they are tax-free and that’s a good thing. But for your emergency fund, we want to make sure that you have the point of that emergency fund is to stop you from putting things on credit cards and building debt. That’s what the emergency fund is.” And this is what I have happen all the time. We have another client who came, and she was in an annuity, which is a good tool when you’re trying to protect, but she’s still working. She’s not that old. And last year, it was a weird one, and she earned 0.5% when the market was going like easily 12%. All of our clients were, I think some of our clients were up in the 30%, not standard, but a lot more than 0.5%.
Tara Nolan:And so, she’s super angry about it. Obviously there was a disconnect because whoever put her into that annuity was thinking protection. Let’s make sure you don’t lose any money, but that’s not what she was thinking. And so this is where it goes wrong, when the tool that you select the investment tool, whether it’s the market, a stock or on a mutual fund is not doing the thing that you thought it was going to do for you. And so, that’s the thing. I think people try to make decisions like insurance is bad or insurance is wonderful, or the market is bad. They don’t care. They just are what they are. Then the question is, is that the tool that you need to solve your problem? Does that kind of make sense?
Susanne Mariga:Absolutely. It completely makes sense. Even things like what’s going on in the market? The market is suffering. Maybe you don’t want to be in a place where you’re keeping all everything in stocks. Maybe it’s time to start stabilizing things, withdrawing as cash, selling those out before the market goes down and, reinvesting in more stable assets or buying more as the market goes back up. Also, depending on your age, maybe, it’s time to start having more of a conservative approach where you’re not going to be affected by it. Municipal bonds, they’re not necessarily high rate of return, but they are tax-free. And just having a financial advisor like you Tara, to advise that, “Hey, market conditions are changing. It’s time to get out.”
Tara Nolan:I can think of so many stories. I have one of my clients, and they’re so funny. He’s got all his money, 100% in the market. And he’s 76 now. The only reason they came to me was they’re interviewing somebody to take care of his wife when he passes. But right now they have enough money. He could bury it in the backyard, and they would be fine. But instead he has 100% of his money in the market, and I’m like, “Do you really want to risk a 2001 or 2008 and lose 50% of your assets? Do you really want to do that?” And he likes looking online and seeing that he’s right on that tick mark of being a millionaire, he just loves it. And I was like, “Oh my gosh! Can we just protect a little bit of that?” He won’t do it, but he’s aware of it.
Susanne Mariga:I had to personally get a big chuckle. What was going on about a month ago at GameStop, where people were buying, I’m like, “You all know you all going to get burned.” You guys know that this dog is not worth that amount, but I guess more of it was, it was a cause of saving the video game industry, propelling it forward with that. And, depending on what side you are, some people made a lot of money, but a lot of people lost, too.
Tara Nolan:When you get into that part of the market and that’s always going on, so let’s not kid ourselves. Technology has made it easier, but this has always going on in the market. There are people that gamble and the people that have large pots of money to gamble with. If you win, you’re a hero, and if you lose you’re burning it off. So, it’s really looking at what are you doing and understanding because that’s the thing is when people hear the stories like GameStop and some people won, they get super excited. There’s a lot more. That’s the surface, there are layers of complexity there. So things are not like just black and white, simple, which we’d all like to think things are just super simple, but it’s not always that easy.
Susanne Mariga:You have to think about what your long-term strategy is, because there were people that lost thousands of dollars, unfortunately, in that game of GameStop with that. So, Tara, one of the things I like to ask our guests, as we wind down is, if you could leave our viewers and listeners with one piece of advice, it can be personal, it can be business, something that would be life changing, what would that advice be?
Tara Nolan:So let me think about that. I would say, first of all, if finance and taking care of yourself financially is on your should do list and you haven’t done anything about it, don’t beat yourself up about it. Give yourself permission. It’s okay because you’re not alone. But the thing to do today is take some action today to think about where you are and ask those questions. How much is enough? Am I on track to get there? And, am I paying too much in taxes? If you were just to do one thing today, though, I would say, get to that financial junk drawer, just organize everything because that’s the first step. No matter what you’re going to do is to go, “Okay, what IRAs do I have? What bank accounts do I have? What insurance do I have?” All the different puzzles and pieces, “what rental properties do you have? What’s my business doing?” And just get it all organized in one place, and then, you’ll be ready to step out and start making something happen.
Susanne Mariga:I love that. So sitting there and just planning to occur and then creating the action based upon what it is that you really want in order to get that. That’s some really great advice. Now, Tara, in terms of being able to reach you and contact you and work with you, what is the best way for our viewers to reach you?
Susanne Mariga:Thank you, Tara. That is amazing. And, I’ll go ahead and put your contact information in the show notes so that our viewers can reach out to you and work with you. Thank you. Thank you very much for being on our show today.
Tara Toran:It was so much fun. I love it.
Susanne Mariga:Thank you, Tara. 
Susanne Mariga:I want you to have your most profitable year ever. Yes, no matter what’s going on in the economy, no matter what’s going on in the world, you can have your best year ever. And, I want to show you how. Join me in our private Facebook group where I will be hosting our Free, Yes, I said, FREE Profit First Masterclass on Facebook. Please join the Profit First Master Class with Susanne Mariga. I look forward to seeing you there and watching you have your best year ever.

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