Retiring Rich: 5 Personal Finance Tips for Entrepreneurs

The most crucial aspect of building a successful business is staying on top of your finances and having them in order at all times. After all, business success is measured in terms of revenue. First-time entrepreneurs wanting to boost their profits and bootstrap their expenses can follow these 5 steps to succeed in a competitive business world and create a rich retirement reserve.


1. Diversify Your Financial Portfolio
Any entrepreneurial venture is more likely to fail than succeed and so, it is very important that business owners diversify their funds and minimize the risk. Consider keeping some cash in a side business, create an emergency fund and consider alternative investment options. As a first time entrepreneur, it is also very important to start a retirement savings plan that safeguards your future financially. The most favorable retirement savings options that entrepreneurs have include a simple IRA, SEP IRA, Self Directed 401K and 401(k) plans. These plans are easy to set up and affordable to maintain.

2. Explore Different Types of Retirement Savings Accounts to Maximize Your Returns
When it comes to retirement savings, entrepreneurs have several lucrative options. If you want to explore beyond traditional IRA plans and 401(k) plans, you can consider SEP IRAs which allow you to save relatively more in a tax-sheltered account. For instance, an SEP IRA allows business owners to stack as much as $52,000 in a tax-favored account and with a defined plan this amount can actually go up to $100,000!

3. Have Separate Accounts for Personal and Business Funds
Volatility is inherent in any business and finances can be tight initially so it is very important to maintain separate personal and business accounts. This will keep your business expenses in check and you won’t have to dip in to your personal savings for your side hustle.

4. Don’t let Debt Delay Your Retirement
Paying off debt should be your top priority as a business owner because if you don’t, eventually you may have to tap into to your valuable possessions when repayments become unmanageable. So don’t let debt delay your retirement and reduce all your repayments. Plan your personal finances early on and avoid becoming the victim of compounding interest where you end up paying much more that what you borrowed originally.

5. Set Personal Finance Goals to Keep Your Business Expenses Under Control
When you are running a business, setting personal finance goals that are specific and realistic will serve to motivate you, keep you on the right track and give you a framework that can be used to measure your performance and optimize your efforts. However, if you are making profits, it is likely that you may go a little overboard with your expenses. But, it is a myth that expenses are tax-favored. So even if you have cash flowing in consistently, do not indulge. You should remember that the small expenses can gradually eat away big chucks of your profits. Try to run a lean business where you only spend on what is absolutely necessary.

When you are running a business, you should always be thinking long-term. While your personal finance goals may be monthly or quarterly, all of them should be planned keeping the bigger picture in mind – Your retirement. So aim for financial stability and keep adjusting your personal finances as your business grows and your retirement savings will continue to grow along!

Rick Pendykoski is the owner of Self Directed Retirement Plans LLC, a retirement planning firm based in Goodyear, AZ. He has over three decades of experience working with investments and retirement planning, and over the last 10 years has turned his focus to self-directed accounts and alternative investments. Rick regularly posts helpful tips and articles on his blog at SD Retirement as well as, SAP, MoneyForLunch, Biggerpocket, SocialMediaToday and NuWireInvestor. If you need help and guidance with traditional or alternative investments, email him at This email address is being protected from spambots. You need JavaScript enabled to view it..


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