You Are A Sole Proprietor: How About A Solo 401(k)

I am seeing more and more people quit the corporate America lifestyle and venture into becoming their own business owner.  This shape of a business owner can be a freelancer, consultant, or someone who actually starts up a ‘brick and mortar’ operation.    Many of these folks will ask questions about whether they should incorporate their business, which I have discussed in other articles.    Once they become profitable, they often ask which kind of retirement plan would suit them the best.   For someone who is a sole business owner, the Solo 401(k) has been around for about a decade and provides a great alternative to helping maximize your retirement contributions.   Here’s a little history on the Solo 401(k) and how it can be a smart money move for your business. The Solo 401k came about in 2002 after Congress passed Economic Growth and Tax Relief Reconciliation Act of 2001 (EGTRRA). EGTRRA added some small paragraphs to the tax code that put forward the solo 401(k) as the preferred retirement vehicle for…

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Entrepreneur Series – Lesson 7 – Milking The Business

Before I opened up my own business, I spent over 10 years at a very high level of senior management for a Fortune 500 corporation. While I garnered a ton of personal and professional growth over the years, nothing can still really prepare you 100% for …

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Should I Loan Money To A Friend?

All of us have had awkward money scenarios happen to us in our lives. There are the immediate face-to-face confrontations when a personal friend asks us for money while out on the town. Or what about the time that your college roommate asked you if they could borrow $5,000 or $10,000? Remember when your 2nd cousin said they would be starting a business and were wondering if you would invest $25,000 in the new venture? So, how do you handle a money situation that may make you lose sleep at night? Here are three smart money moves steps to diffuse the problem. Step 1: Empathize. Listen, and Show that you’ve heard by recapping what specifically the other person is wanting to do with the money. Make sure you initially understand it from their point of view. Indicate that you know that economic times are tough, and their individual circumstances are particularly difficult. In a certain sense you need to be able to step inside of their shoes to feel a…

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Entrepreneur Series – Lesson 4 – Avoid Rookie Mistakes

I am not a professional athlete.  However, I would imagine that the rookie year on any of the professional sports circuits has to be daunting in nature.   Not only are you in front of some type of large crowd, it takes some time getting used  to all of the decisions you have to make to be the best of the best in what you do for a living.   Far too often, new entrepreneurs can make first year decisions which can put a major dent in the first year of your new entrepreneurial venture.  Even someone who has a lot of corporate experience cannot understand the firefight of being a business owner until you have to meet your first payroll.One great idea my business partner and I have put into place in our business is the 48 hour rule.   We’ve set criteria around what a ‘key’ decision is for our business and once we have made a decision on the direction we want to go we will revisit the decision in…

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Entrepreneur Series – Lesson 3 – Know Your Role As The Owner

As an entrepreneur starting a new business, you often have to wear the hat of cook, dishwasher, accountant, and general manager.   However, one of the biggest mistakes a young owner will make is not quickly clarify their role within the organization.   Far too often, new entrepreneurs will try to control every aspect of a new business which inevitably slows the growth of the organization.  In some cases, it can make hiring and training new people so difficult it can be destructive to the success of a company. One of things I recommend to new business owners is to draw a T chart with one axis being things you like to do and one access being tasks that you are good at.    What you should quickly try to figure out in the early stage of a new company is to list all of the items that you are good at and those tasks that you like to do.    After figuring out this critical piece of analysis, you should begin to try…

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Is ‘Junk’ Ever Good For You?

I have never paid any money to listen to Sirius/XM in my car. I’m probably too cheap to get hooked on to the monthly subscription fees. On the other hand, my sister cannot live without satellite radio in her car. Whenever I bring my automobile into the dealership for a major service, they always give me Sirius/XM for some free trial period looking to bait me into paying the monthly dues. For the past couple of weeks, I’ve been throttling the dial between 70’s, 80’, and 90’s songs listening to one hit wonders that bring back childhood memories. In the 70’s Larry Groce belted out the tune “Junk Food Junkie” (http://bit.ly/cuNbVY) that was written about 35 years ago as a parity song about the proliferation of fast food. The song sounds a little like Charlie Daniels’ “The Devil Went Down To Georgia” and it got me thinking about this topic: Is JUNK a word that is ever good for you? I suppose if you do anything in moderation with food,…

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Will The Internet Change Medical Prices?

There was a time that when it came to buying our electronic devices, we would simply go to our local electronics store.   Then, the onslaught of electronics superstores came at us like Best Buy, Circuit City, and Fry’s giving us a virtual cornucopia of electronic choices.    In the late 90’s and then into the early 2000’s, the internet changed the game with websites like Buy.com, Next Tag, and Amazon where we could price compare quickly as consumers.   Between the internet and smart phones today, information is at our fingertips to quickly compare and contrast the pricing on whatever electronic devices we are potentially going to purchase. As most of us know, the health care landscape has changed over the past several years and should change dramatically when we get into 2014.   When January 1st comes, the most popular part of health reform will be the concept of guaranteed issue.   This means irrespective of pre-existing conditions health plans must be available to everyone.    We will also see the unveiling of the…

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Preventive Medicine For Your Home

We all know that one the largest assets we will own in our lifetime is our home.   I’ve never really seen a ton of good articles on the cost of home ownership, but having personally owned over a half dozen homes, I can tell you that all homes required their fair share of upkeep.    Even though we may not be in the market to sell our homes, we are constantly watching the sale of our neighbors homes or checking out the prices on websites like Zillow to see where the value of our home stands.     We can convince ourselves that our home is in tip top shape until the time we get an offer on the home contingent on the dreaded home inspection.    A good home inspector gets paid in part to look within every nook and cranny in the house to find out what may be wrong with the property.    After the inspection, we can almost become incensed that the inspector may have found something foundationally wrong or something…

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Financial Literacy Takes More Than A Month

I’ll bet that most of you don’t know that April is officially National Financial Literacy Month #finlitmonth.  In fact, almost a decade ago in 2003, the U.S. Senate designated April Financial Literacy for youth Month.   In March of 2004, the Senate passed Resolution 316 that officially recognized April as National Financial Literacy Month.    I almost thought for a minute that we had run out of months since every month seems to have designated some cause for us to heighten our sense to for the next 30 days. It’s ironic because I’ve been doing this for almost 22 years and I can tell you that I’m still constantly learning new strategies and techniques around planning for money.   Many Americans are highly educated but still not well informed when it comes to their money. Here are five smart money moves to focus on if you want to become more financially literate. Mutual Funds or Index Funds-  Many of the large mutual funds companies run advertisements on television or in print about how their…

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VIDEO | The Government Will Tell You What To Do With Your 401(k)?

Published on: Apr 11, 2013 @ 11:00

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