The Official Blog for Hairdresser Career Development Systems » financial planning

Seven Tips to Achieving Financial Security

Jon — Sat, 17 Sep 2011 05:49:46 +0000

” A big part of financial freedom is having your heart and mind free from worry about the what-ifs of life.” – Suze Orman

To many people in our profession, this topic will probably be ignored. Financial planning does not sell tickets. Sadly many in our profession are in denial and will profess everything is going well.

Even worse, far too many of our hairdressers are struggling to make a good living, while far too many of our salons are failing. This need not happen to you.

Many hairdressers, salon owners and people working in the beauty profession, develop an artistic mind set and refuse to invest in their financial future and in knowledge.

They’ll spend more time arguing about products and not their financial future.

We cannot afford to trust government or special interest groups for our financial security.

You and you alone must take full responsibility for your own financial and retirement planning.

If your open minded, I think you know that today’s economy is in turmoil. Unemployment is at an all-time high, and the future will be challenging.

People who have spent a life time working hard earning money, did not plan for their future and are now paying a heavy price.

Despite these alarming trends I see windows of great opportunities for those committed to ongoing self-improvement and who are committed to learning and planning their financial future.

Follow these tips with an open mind :

Invest in Your Skills – the more you learn, the more you earn. As you create a demand for your services your income will grow allowing yourself extra money to invest in your future. Work hard at self improvement every day.

Avoid Excuses and Procrastination – far too many will always look for excuses to fail, excuses such as I can’t afford to save any money. Do you have the self-discipline to avoid excuses to fail?

Learn About Money – you take classes developing your artistic skills; why not add taking classes on money management and financial planning? It is not how much you earn that matters, it’s what you do with what you earn will determine your financial future.

Open and Ira or Roth Ira – don’t delay, learn the power of compounding. You must start now on planning for your retirement. You’ll thank me 20 years from now.

Money Management – learn how to save your money. Be careful how you spend your hard earned money. Instead of paying $ 7.00 for a martini , maybe instead add that money to your savings.

Stay Out of Debt – especially credit card debt. Need I say more! Pay close attention to your credit score.

Invest Your Money – you work hard for your money, make your money grow and work hard for you.

A good start will be in owning your own home or condo, great time to buy.

We live in very difficult and challenging times. I personally was able to retire financially independent using these guidelines. It is my wish that you and your family can benefit from these tips. Your invited to view my educational resources.

Financial and Retirement Planning

Jon — Sun, 26 Sep 2010 07:29:55 +0000

Money Management Starts Here

‘”Becoming wealthy is not a matter of how much you earn,who your parents are,or what you do — it is a matter of managing your money properly” — Noel Whittaker

One of the pitfalls we face as hairdressers and salon owners is that, more often than not, our jobs do not provide us with pension plans, medical insurance, paid vacation, or other benefit packages like other professions. As a result, many in our profession end up living paycheck to paycheck and seldom take the time to think about their futures when it comes to financial and retirement planning, which is a mistake none of us can afford to make, especially in today’s fragile economy.

In spite of these challenges, a career in the beauty industry can be your ticket to financial independence if you plan ahead,learn to save your money, and set financial goals.

It isn’t how much you earn that determines your ultimate financial security, it’s what you do with what you earn that makes all the difference. This is one of the few professions where you can get all the overtime you want once you create a demand for your services. You control your own financial future,do you have the self discipline to save your money,work a little harder, and learn about money management.

Saving is the Key to Your
Long-Term Financial Stability

It is never too soon to start saving for retirement. In fact, the younger you start the better. The compound interest you can earn over forty years, compared to the interest you’d earn over ten or twenty years, is simply extraordinary.

For example, if you started saving for retirement at age 20 and contributed $5,000 a year to an IRA with an 8% average annual return, by age 65 you’d wind up with over $1.93 million—that’s over eight times the amount you contributed! But if you wait until you’re 40 to start saving $5,000 a year, at the same rate you’ll only end up with $365,000 when you retire at age 65.

You see, every year you delay saving for retirement makes an enormous difference in the size of your nest egg down the road. Don’t worry if you didn’t start early, though. The important thing is to start now.

Choosing a Retirement Plan

The easiest way to start saving for your future is to open a Traditional Individual Retirement Account (IRA) or a Roth IRA. With both of these IRA options, you can invest up to $5,000 a year if you are age 49 or under, or up to $6,000 annually if you are age 50 or above. If possible, try to invest the maximum allowed contribution in January every year to maximize the interest you’ll earn on your investment. Even if you can only invest $50 or $100 each month, do it. The power of compounding interest, over time, will make your money grow more than you could have ever imagined.

Now here is a comparison of these two popular IRA options to help you decide which one might be best for you:

Traditional IRA

Advantages:

No income restrictions, available to everyone.
Deposits are tax deductible (depending on your income) and can reduce your taxable income.
You can invest your money in stocks, mutual funds, and other insured investment vehicles.

Disadvantages:

Earnings are taxed after the funds are withdrawn.
Early withdrawals made before age 59½ are subject to a 10% penalty (subject to exception).
You must begin taking distributions from the account by age 70½ .

Roth IRA

Advantages:

Offers greater long-term tax savings.
Earnings left in a Roth IRA account for at least five years and withdrawn after age 59½ are tax tree.
There is no mandatory distribution age, which means you can leave your funds in longer.
No penalty on early withdrawal of principal contributions (subject to some conditions). However, there is a penalty for withdrawing any earnings your money has made before age 59½.
You can invest your money in stocks, mutual funds, and other insured investment vehicles.

Disadvantages:

Contributions are not tax deductible.
Income restrictions apply. The ranges for the 2008 tax year are:
Single-filers earning no more than $101,000 annually can make the maximum Roth contribution, and earning $101,000-$116,000 are eligible to make a partial contribution.
Married couples filing jointly earning no more than $159,000 combined annually can make the maximum Roth contribution, and earning $159,000-$169,000 are eligible to make a partial contribution.

There are also other options for setting up an IRA account such as an IRA certificate, where you can invest fixed amounts for a predetermined amount of time called a “term,” at a fixed dividend rate. Consider speaking with a financial adviser to determine which plan will work best for you.

If you are a salon owner, you might also think about offering an IRA package to your staff. Setting up an IRA for your employees provides greater tax savings for you and is a great incentive that will help you attract top quality hairdressers.

Don’t wait any longer to start planning for your financial future. Learn to save your money, stay out of debt, protect your good credit, build a history of job stability, invest in your skills through knowledge, buy your own home or condo, open an IRA, and read information on money management and financial planning.

Although you may not have access to the same benefits other professionals do, you do have the potential to develop your skills to create a demand for your services. The more you learn, the more you earn. A top professional hairdresser will always be in demand, even during a recession. You control your own financial destiny and opportunities. The sky is the limit.

To learn more about financial planning, I encourage you to check out the following websites:

www.bloomberguniversity.com

You’ll also find more information about financial planning on the HCDS website, www.hcds4you.com, under articles of interest.

Additional resources

To learn more about Hairdresser Career Development Systems and how we can help you move to the next level in your journey—personally, professionally, and financially—please call toll free (800) 390-4237 or visit www.hcds4you.com.

Financial and Retirement Planning

Jon — Sun, 10 Jan 2010 21:36:43 +0000

Financial and Retirement Planning

You work hard for your money–
make your money work hard for you

One of the pitfalls we face as hairdressers and salon owners is that, more often than not, our jobs do not provide us with pension plans, medical insurance, paid vacation, or other benefit packages compared to other professions. As a result, many in our profession end up living paycheck to paycheck and seldom take the time to think about their futures when it comes to financial and retirement planning, which is a mistake none of us can afford to make.

In spite of these challenges, a career in the beauty industry can be your ticket to financial independence if you plan ahead and set financial goals,because it isn’t how much you earn that determines your ultimate financial security, it’s what you do with what you earn that makes all the difference.

Saving is the Key to Your Long-Term Financial Stability

Choosing a Retirement Plan

The easiest way to start saving for your future is to open a Traditional Individual Retirement Account (IRA) or a Roth IRA. With both of these IRA options, you can invest up to $5,000 a year if you are age 49 or under, or up to $6,000 annually if you are age 50 or above. Keep in mind that these numbers will vary due to changing tax laws,consult with your accountant or financial planner. If possible, try to invest the maximum allowed contribution in January every year to maximize the interest you’ll earn on your investment. Even if you can only invest $50 or $100 each month, do it. The power of compounding interest, over time, will make your money grow more than you could have ever imagined.

Now here is a comparison of these two popular IRA options to help you decide which one might be best for you:

Traditional IRA

Advantages:

No income restrictions, available to everyone.
Deposits are tax deductible (depending on your income) and can reduce your taxable income.
You can invest your money in stocks, mutual funds, and other insured investment vehicles.

Disadvantages:

Earnings are taxed after the funds are withdrawnsusally at a lower rate when you retire.
Early withdrawals made before age 59½ are subject to a 10% penalty (subject to exception).
You must begin taking distributions from the account by age 70½ .

Roth IRA

Advantages:

Offers greater long-term tax savings.
Earnings left in a Roth IRA account for at least five years and withdrawn after age 59½ are tax tree.
There is no mandatory distribution age, which means you can leave your funds in longer.
No penalty on early withdrawal of principal contributions (subject to some conditions). However, there is a penalty for withdrawing any earnings your money has made before age 59½.
You can invest your money in stocks, mutual funds, and other insured investment vehicles.

Disadvantages:

Contributions are not tax deductible.
Income restrictions apply. The ranges for the 2008 tax year are:
Single-filers earning no more than $101,000 annually can make the maximum Roth contribution, and earning $101,000-$116,000 are eligible to make a partial contribution.
Married couples filing jointly earning no more than $159,000 combined annually can make the maximum Roth contribution, and earning $159,000-$169,000 are eligible to make a partial contribution.

Although you may not have access to the same benefits other professionals do, you do have a strong earning potential when you take time to develop your skills and create a demand for your services. A top professional hairdresser will always be in demand, even during a recession. You control your own financial destiny and opportunities. The sky is the limit.

To learn more about financial planning, I encourage you to check out the following websites:

www.bloomberguniversity.com

You’ll also find more information about financial planning on the HCDS website, www.hcds4you.com, under articles of interest.

Additional resources