I came to the end of yet another year and had no idea where the money went. I said to myself, “Henry, you have a financial literacy problem.” I had another problem, though—I didn’t really know where to go to get the answers I needed.
As I continue learning and putting things in place, I feel it’s mandatory to share this information. Honestly, I would be happy if just one person would take it and do something with it.
I often think about that $10,000 I had sitting in storage, realizing that I knew I shouldn’t spend it but didn’t know what to do with it. This blog is pinned with the hope that someone will use this information to set themselves up to be millionaires—not only from their business but through their investments.
1. Roth IRA
A Roth IRA is a great way to make your money grow tax-free. When you put money into this account, you pay taxes up front, but once you retire, you can take out your funds tax-free. I remember how I used to let money sit without understanding its potential. A Roth IRA ensures that your money is working for you in the long run.
• Where to Obtain:
• Vanguard: Known for low-cost options.
• Fidelity: Offers flexibility and extensive investment choices.
2. Solo 401(k)
If you’re self-employed, the Solo 401(k) is a must. It allows you to contribute a substantial amount each year and provides tax deductions, which was something I didn’t even realize could benefit me as a business owner. What’s even better is that you can borrow from the plan before retirement—tax and penalty-free.
• Where to Obtain:
• Charles Schwab: Offers flexibility and easy setup for self-employed individuals.
• E*TRADE: Known for their comprehensive Solo 401(k) options.
3. Self-Directed IRA
This one blew my mind when I first learned about it. With a self-directed IRA, you have the ability to invest outside of stocks—you can buy real estate, businesses, or other assets. This is a great way to diversify your investments beyond traditional methods.
• Where to Obtain:
• Equity Trust: Great for investing in non-traditional assets.
• Entrust Group: Provides support for real estate and business investments.
4. Traditional Brokerage Account
A brokerage account allows you to invest freely, though it doesn’t offer tax benefits. This type of account gives you the flexibility to buy stocks, bonds, and other securities and borrow against your account if needed. It’s a great option if you want access to liquidity and the ability to manage your investments in real time.
• Where to Obtain:
• Charles Schwab: Provides a wide variety of investment options.
• Fidelity: A well-rounded choice for anyone wanting a comprehensive investment platform.
5. Health Savings Account (HSA)
The HSA is a game-changer for medical expenses. It offers triple tax benefits—tax deductions when you put money in, tax-free growth, and tax-free withdrawals for medical expenses. It’s like a secret weapon in your financial toolkit.
• Where to Obtain:
• Lively: A great choice for low-fee HSAs.
• HealthEquity: Offers various investment options for your health savings.
As I reflect on that time when I didn’t know what to do with my money, I realize that setting up these accounts would have been a game-changer. By taking the steps to create these systems, we can make our money work for us and future-proof our wealth. Take action today, and let your business and investments work in tandem to secure your financial freedom.
God Bless the Entrepreneur.