In today’s episode, I’m delving into my personal investing journey as an entrepreneur and financial coach!
Listen in while I share insights and lessons that shaped my financial path. From the importance of contributing to retirement to the power of playing with numbers and setting ambitious goals, I explain how I decide where to invest my money. Plus, I reveal my goals for the year, including maximizing retirement savings and finding the perfect real estate investment property. Finally, listen to learn what I wish I knew about finances in my 20s and what you need to understand right now to maximize wealth-building and reach your money goals.
So, if you’re ready to take charge of your financial future, gain confidence, and learn the art of intentional investing, tune in to this episode of Money Files!
Key topics discussed in this episode are:
[02:07] Keina’s thoughts on investing
[08:00] Retirement planning as an entrepreneur
[17:58] Keina’s 2024 investment goals
[22:56] What Keina wished she knew in her 20’s & what you need to know now
Tune into this episode of Money Files to learn how I invest as a self-employed financial coach.
Are you ready to start asking for help with your finances? Apply to work with me, and let’s start working towards your financial goals.
IF YOU LOVED THIS CONVERSATION ON INVESTING, PLANNING FOR RETIREMENT, AND BUILDING WEALTH AS A FINANCIAL COACH, CHECK OUT MY EPISODE ON HOW LAYRA INVESTED IN HERSELF & INCREASED HER INCOME!
Transcript for “Investing, Planning For Retirement, And Building Wealth As A Financial Coach”
Intro: Hi and welcome to Money Files. I’m Keina Newell from Wealth Over Now. I work every day with professional women and solopreneurs to help them get out of financial overwhelm and shame so they can experience more flexibility and ease with their finances. Are you ready to gain confidence and learn to manage your finances intentionally? Tune in and grab financial tips that will help you master the way you think about and manage your finances.
Keina: Hello and welcome back to another episode of Money Files. So before we get started today, I have an asked, if you have enjoyed any one of my podcasts, I ask that you would go and leave a review on Apple or Spotify. I love being able to read your reviews, but what I also enjoy is that I know that your review encourages other listeners who are going to find my podcasts this year. And so they’re able to know like oh, this is a podcast that I should listen to, to really help change my relationship with money. And so when you’re able to share your personal account of how you’ve been impacted by my podcast, consider it a gift that you’re helping someone else. So thank you so much for tuning in and I thank you for listening in this New Year.
So if you tune into my podcast last week I talked about the five steps to building wealth and there are five steps that I take my clients through. And I thought that it would be interesting to hear about how these five steps show up in my own life. And so I’m going to talk a little bit about, how does Keina invest? How does a financial coach like myself invest? And I’m also going to share with you some lessons that I wish I had known in my twenties. And I’m also going to give you some tips for things that I want you to be doing as you think about investing for yourself. And so I’m just going to go ahead and I’m going to dive in.
So when I think about investing, there are two main thoughts that kind of drive when I think about investing for myself. And one of the thoughts that I have is that I want something to show for my money. And when I think about wanting something to show for my money, I think that one definitely resonates with me the most since I’ve transitioned into being an entrepreneur. And I think the shift for me is that as an entrepreneur I have the ability to make however much money I desire to make, as like I improve my selling skill sets and shift my pricing in my business, like set different financial goals I can make whatever amount of money I desire to make. And so I want to be able to invest and contribute to my retirement. That’s specifically how I’m talking about investing in this sense. And so I don’t want to be an entrepreneur who is showing up, I’m talking about making six figures, but I haven’t also paid myself.
I think that paying myself, especially in the sense of like contributing to my retirement, it felt a lot easier when my paycheck was very consistent when I knew on the 15th and the 30th I am going to get a paycheck. It’s going to be the same amount I can talk to my HR or log into a portal and I can tell them exactly how much money I want to contribute to my retirement. So one of my driving thoughts when I think about investing is that I want something to show for my retirement. Another thought that drives me is that I want to build a legacy for myself and my family. And family is something that I value. I have had family support my entire life. My family still supports me, even the other day my dad was like oh yeah, there are so many people in Oklahoma that know about what you do. And I was like dad, what do you mean so many people? He’s like well I talked to somebody the other day and they said they follow you on Facebook.
I’m like, “so you know one person Daddy, that follows me.” But my dad, like I said, he supports me. And I was joking with my mom, I said, if I had to go to court, I don’t know that I could tell the judge that you support me because sometimes you read what I write and sometimes you don’t. But my parents are my champions and they’ve always believed in what I do. But also just thinking about as I’ve watched my family, especially at this stage in my life, my grandmother, which you probably heard me talk about her on another episode, she is, gosh, she’s 87, she’s going to be 88 and she has dementia. She still lives on her own. But when I was at home for Christmas, I was with my mom and my grandmother is on pretty much like a fixed income. She has her social security and she has some money, like she had a pension etcetera. That’s a different story. But my mom manages her finances in the background and we were out shopping like we were, I guess you could call it a girl’s day, but we were driving around and running some errands with my grandmother around town and we were at Sam’s.
And so my mom was making sure that my granny has everything that she needs and my mom just paid for all of my granny’s stuff that she needs for her house. And it’s like a simple thing. I think maybe the total bill was like $300, which if you’re at Sam’s or Costco, that really just means you got paper towels and some tissue. But when I think about having a legacy for my family, it’s being able to be in a position, as I’m getting older, as my parents are aging, that I will be in a financial position to be able to help them if they need help. It may mean helping my parents if they need something. It could mean helping my nieces and nephews. It could mean helping my brothers. I’ve even started to, especially more recently started to think about cousins that I have, especially on my mother’s side, on my maternal side and thinking about like okay, what does life look like in 10 years and if I need to be in a financial position to help someone who’s in my family, what does that look like?
And so when I think about investing, it really comes back to wanting to build a legacy for myself and for my family. I don’t have kids, maybe I’ll have kids one day, maybe I won’t, I don’t know. But also if I had kids, it’s also being able to position myself financially where my kids are going to be able to have a leg up, for lack of a better word, like where they are financially. So my parents did the best that they could in terms of helping me get through school. My parents hadn’t gone to college, they didn’t know a lot about student loans. And so, can I position myself to make sure that if I wanted to notice my words and my language here, if I wanted to, I can make sure that my kids went to school without having student loans. But I have some thoughts about teaching kids about money anyway. So I probably, I don’t know that I would pay for everything, but there’s a difference between not being able to pay for something and being in a position to pay for something and choosing not to pay for it.
And so I’m always thinking about my positioning and when I think about my finances specifically around building this legacy, I want to be in a position to be able to do things. It doesn’t mean that I will say yes even if my brother called and said hey do you have a thousand dollars I can have? I can be in a position to give him a thousand dollars. It doesn’t necessarily mean that I’m going to give him a thousand dollars. And that could be for a lot of different reasons. But I just wanted to share a little bit more about kind of two thoughts that kind of just drive how I think about and how I’ve made some decisions when I think about investing.
I wanted to actually circle back to the thoughts that I was telling you about first when I told you that I wanted something to show for my money because I think that this can just kind of be important to give you some backstory. So when I was transitioning from working full-time for someone else but also building my business, one of the things that was really top of mind for me at the time was that I wanted to be able to contribute to my retirement. I realized that by leaving my job. I left my job, first time I just left and was like hey bye. And then I realized you spend money from your savings and it can go away really quickly. And then I got another job. So the second job that I had, I was able to contribute to my retirement. I had healthcare and all these things. And so one of the things that I realized in having a job is that you have this total value proposition and all of you, if you work for someone else, you have a total value proposition, even if you compare a company A to company B, there’s a total value proposition and your total value proposition or some of the hidden things that you don’t see that don’t necessarily come through and they’re not reflected in your paycheck.
So it’s your retirement, it’s your healthcare. It could be other benefits like paid time off but things that you can’t necessarily see the dollar signs like when it hits your bank account. But if you were to add it all up you realize that you make your base salary plus whatever these benefits are that you have. And so in leaving my job and deciding to work for myself as I transitioned from 2020 to 2021, I remember talking to one of my mentors and I was telling her, I was like, you know one of the hesitations and one of the things that I kind of haven’t figured out yet is how am I going to be able to contribute to my retirement? Like it was worrying me because I have a degree in finance and so I know that there’s this whole like time value of money and the importance of being able to put money into retirement early on and the compound interest that you get to benefit from.
So I was just thinking about how there could potentially be a gap in what I was able to contribute to my retirement. And so she coached me on contributing to my retirement and just really being able to think through both sides of the coin. I love that she coached me because she’s also on the money side as well so she knew exactly where I was coming from. And so just really helping me kind of get past some of my own limiting beliefs because I think at the time I was thinking like oh my goodness, if I’m not able to contribute to my retirement then I may not be setting myself up as well as I should be and I was looking for the holes and not necessarily looking for the opportunities in that specific situation. So as a result of that, one of the things I think I tend to do with my numbers is get really curious, especially when I find something that I’m like okay, I’m trying to solve for this because this is what I desire to be true and one of the things that I desire to be true is to contribute to my retirement.
And so I’m like okay, how can I play with the numbers, which if you’ve heard me say that before, you’re like how do you play with numbers? And you’ll probably hear me talk about it again later, but I just started playing with numbers to see what it would look like if I was able to contribute to my retirement. How could I create a system for myself that would allow me to contribute to my retirement? And I like don’t have the physical work that I did back then but what I do remember doing is just like, as I transitioned from 2020 to 2021, I think I have those years right. We’re just talking about when I left my job, let’s just stick there. So all those years are a blur. But when I transitioned I had money in my savings account because I had been working.
And so the year that I left my job I had made a hundred thousand dollars in my business. And so I felt really secure being able to leave because I had hit, like one of the numbers I wanted to hit was making $10,000 months in my business. And so I hit that month and I hit that month several times. And what I was able to do was set aside money in my business to make sure that I could pay myself for three months even if I never signed another client. I had set up money for operating expenses and really just created a runway for myself. That made me feel secure. That’s what I needed to leave. I know a lot of other entrepreneurs, they don’t need the same thing that I needed but that’s what I wanted and what I needed to feel secure.
I needed to know I could pay my healthcare, I can pay my expenses. I wanted a three month runway because I didn’t want this fight or flight response that I felt would get in the way of my selling. So what I do remember doing when it came to the retirement piece was, as I made money in 2021 is I started seeing how much I could set aside for retirement. So it was like okay, I think at the time I was probably paying myself, let’s just say I was paying myself like $5,000 a month at the time and it may not even have been that much but I was paying myself. And then as I started to build more trust with myself that I could make money and that my hundred thousand dollars a year was not just a fluke and I was like oh okay I know how to actually continue to make money.
That’s when I was like oh and now I can also contribute to my retirement. So one of the things that I love to do when I’m playing with my numbers is being able to create a scenario. So let’s say for instance in that year, in 2021, if I said that I wanted to contribute $6,000 to my retirement, my goal would’ve been, can I set aside $500 every single month just in my checking account or my savings account and can I contribute to my retirement? And so it kind of like builds this proof of concept for me and it creates this trust for me and then I’m able to go and do that. And like I said, I don’t remember exactly how much I contributed in 2021 but I do know that I played with my numbers in order to make that work. And so what that has evolved into over the last several years in 2021, 2022, 2023 and now 2024 is that initially I opened up a step IRA which is a self-employment plan for retirement and then I transitioned.
When I transitioned to being an S corp, I opened up a solo 401k. So I switched from a step IRA to a solo 401k because it made more sense for my particular situation. And in doing that, that’s the vehicle that my money was going into. But then also what it looked like from a day to day, month to month kind of scenario is that I do the same thing with my money everytime I get paid, whether it’s from a client, whether it’s from a speaking engagement, whether it’s because I did a workshop, whatever it is, I do the same thing with my money every single time. Whether I make $100, whether I make $10,000, I do the same thing with my money. And a part of that is that for the last couple years I’ve basically taken 30% of whatever my gross is. So I take 30% of my gross, that’s like earmarked for owner’s pay.
I used a modified version of profit first. So 30% of that is owner’s pay. Out of that owner’s pay that’s where I start to play with the numbers. So I start to think about okay I am going to treat myself like an employee and my business is my employer. And so when I was working I told my employer, hey can you withhold a certain percentage of my pay to set it aside for retirement? And so that’s exactly what I do in a spreadsheet for myself. I set aside like 22% of that 30% and that’s what’s earmarked for retirement. And then my solo 401k holder, whatever you call them, they know to pool a certain amount of money for me every two weeks. So my retirement contributions, they’re consistent in my business.
It was really important for me to set up a system where I would be really consistent. I know that some entrepreneurs they contribute at the end of the year but I wanted to be able to take advantage of dips in the market but I also wanted to have a system where I’m investing every single month. I wanted it to be like a bill, if you will because paying myself is a priority and like I told you, I have the thought that I want something to show for my money. So that’s just a little bit on the backstory of kind of how I kind of navigated figuring out how I wanted to invest as an entrepreneur and specifically when I talk about retirement here and how I wanted to set that up for myself. And it still is like I’m still learning the different pieces of it.
I know that things change when I have employees but because I have created some level of a system for myself, I feel really confident that as my business changes and grows that I’ll be able to adapt with the growth in my business. So just to kind of dive in and tell you a little bit more in terms of my goals for this year, I want to be contributing so I’m going to increase from the 22% I told you to the 25% of my owners pay. I want to be able to contribute that to my solo 401k. So in 2023 I contributed $12,000 to my 401k and this year I’m going to make sure that I’m contributing at least 25% and so that’ll be a minimum of $15,000 that I’m contributing. And so I can contribute more than that and it will most likely be more than that but it’s kind of like the minimum and you may be asking Keina, how do you know that $15,000 is going to be my minimum?
So because I’m an S corp, I pay myself a minimum salary and so based off of my minimum salary I’m figuring that 25% off my minimum salary. My accountant and I, we talk at the end of the year and because I’m also saving, I won’t get into my spreadsheet, I’m saving more than just that $15,000 to put into my retirement. I know that I have the potential to be able to put more than just that $15,000 and that’s the goal. So hopefully you’re following along as I talk about these abstract numbers, but I just wanted to let you know that is one of my goals for this year, is to really contribute more money to my retirement. And I should tell you specifically that because I am self-employed and the solo 401k that I have the maximum amount of money in 2024 that I can put into this solo 401k and there are some little asterisks in there because there are some other things that you have to consider whether or not they’re true for you.
But what is true is that I can contribute $69,000 this year. Obviously I just gave you a number of $15,000 which is not $69,000. But because I know that that’s my goal and I told you guys I like to play with numbers. Then in playing with numbers I can identify a path for how can I get to the point where I can fully max out that number and next year it could be $71,000 and the next year after that it could be $73,000. So it’s going to change little by little but even with mapping out my goals, I’m going to be able to get to that number and so I can play with what happens if I make $500,000 in my business, like what would that mean for what I could contribute to my solo 401k? What happens if I hit the million-dollar mark in my business? What does that mean that I can contribute to my 401k?
So when I’m talking about playing with my numbers in my spreadsheet I’m literally manipulating the numbers to see what can be true based off of like revenue goals or if I change a percentage that I want to contribute, it allows me to see how I can reach this goal of $69,000. So it’s like one of the numbers that’s fun for me to play with and be able to drive towards. So that’s a little bit more about that. Then that’s not my only goal in terms of investing. So one of the tools that I want to do for investing, like I said it’s retirement. The other tool that I want to use in terms of investing is I think I’m pretty sure about this but it’s also one of these things that I’m learning about is that I actually want to have an investment property.
So in 2023 I worked with a real estate coach and that experience taught me a lot about myself. I was looking at these houses and I’m like I would never live there. I don’t think I can buy that, which isn’t necessarily the personality I don’t think that you need when you want to invest or like have an investment property because like I am probably too connected and too attached to it. But on my radar is that I would like to create another stream of income and that stream of income be an investment property. Last year I looked at like a lot of different deals. None of the deals really made sense for the type of income that I wanted to produce with the interest rates with where they were and what I was willing to spend. But I’m going to continue and I’m not going to give up. So I’m going to continue that goal in 2024 of searching for a rental property and really thinking about how can I leverage an additional stream of income for myself to continue to build wealth for myself as well. So those are my two investment goals this year is thinking about and finding a real estate or an investment property and then secondly, being able to get closer to maxing out my solo 401k.
So if you made it this far in the episode, thank you so much for listening. I wrote down a lot of notes and I’m like oh they probably don’t want to know that. That seems a little bit wordy. So I am going to shift you guys to a couple of notes that I had for you in terms of things that I wish I would’ve known in my twenties and then things that I want you to know as well. So one of the things that I wish I would’ve known in my twenties is that just getting the match on your 401k or your 403 B doesn’t mean that you’re maxing out your retirement. I remember that someone told me like oh yeah get the match and you want to get the match. But I didn’t realize that I could do more than the match. Nobody had ever really talked to me about the fact that the IRS sets a limit each and every year. And somewhere I think, like later in my twenties I figured that out that there was an IRS limit in how much you can contribute to your 401k or your 4013 b.
And I think that would’ve impacted how I chose to invest early on even on a teacher’s salary and being in education because I would’ve just made some decisions from the beginning because I wouldn’t have missed the money. I would’ve just been oh yeah, this is what we’re doing. So I will link this in the show notes. But Google IRS contribution limits. Every single year, you can do it in December but they change so this year if you have a health savings spending account, the limit this year is $4,150, it’s $8,300 for families. And so I have an HSA so I’ve manipulated my numbers to contribute to that. Then there’s a Roth IRA. The limit this year is $7,000. The 401k or the 403B, whatever your retirement vehicle is at work, the limit for that this year is $23,000. And then like I told you the step IRA and solo 401k is $69,000.
The other thing that I wish I knew in my twenties is I wish I had started contributing to my wrath IRA sooner because I think that if I had made it a habit early on then it would’ve just been something that I chose to sustain. But I learned about it. I don’t remember when I learned about Roth IRAs but by the time I learned about it I felt like I didn’t have money to be able to save in my personal life that I needed to build my emergency fund and to be able to put money in my Roth IRA. So I just wish that was something that I had taken advantage of earlier because it also would’ve just gave me another tool to have for when I think about retiring later on. So now I do have a Roth IRA that I contribute to and it’s something that is factored into my personal budget that I contribute to each month. So give you a heads up there.
And then in terms of things that I want you to know, so at your job, and this is the thing I used to like run around in my job and I feel like I can tell everybody, I want you to know especially when it comes to the retirement piece, I want you to know your vesting period. And so the vesting period is basically like if your company is like hey we contribute 5% to your retirement and you know you also get a 2% company match, well that money isn’t yours until the vesting period. Some companies they let you vest immediately and you are vested like maybe after the first year. When I worked at my charter school, we weren’t vested for three years. And so the reason I wanted other people to know is like if you were going to quit at like two years and nine months, I’m like how can we make sure that you stay an extra three months so you actually get to take the money with you that your employer has been putting into your retirement account. But I think especially as you may be someone who maybe changes jobs, just being able to know what’s your vesting period is so you don’t leave money on the table.
Also with that I would just say understanding that total value proposition as you go from one job to the next, like how much does your employer contribute to your retirement? What is your match? Because you may be going to a job with a higher salary but also being able to check some of those benefits to see if they compare. Are you comparing apples to apples or oranges to apples? And then the next thing that I want you to know is that you are your greatest investment so make sure you’re paying yourself. I challenge you to max out your retirement. You might want to do it with the next big raise that you get or the next promotion you get. My client, Ellie, we talked about it a little bit on her podcast. She got, I want to say it was like a $30,000 raise while she was working with me.
And one of the things that we did immediately was we set her up to max out her retirement and by setting her up to max out her retirement, one she did it before the age of 30, which I’m so proud of her. And then two, because she’s going to earn more money over time, like she’s not going to have to be calculating all the time, how much do I need to contribute to my retirement? It’s just going to be something that she’s going to set and forget. She’s not going to know the difference of what her paycheck would look like if she wasn’t maxing out her retirement. So it’s one of the greatest gifts you can give to yourself if you are thinking about how to leverage your promotion. And also when we were talking about her promotion, I was like hey, think about the fact that you want to put in an extra $20,000 into your retirement. So how much money do you want to ask for?
And so that’s where just asking for a $20,000 raise may not be the thing you want to do. You actually want to ask for $140,000 or 160,000 just kind of going off the base of a hundred thousand being the base. If you’re like Keina, I don’t have a promotion to kind of leverage right now. The other thing you can do is just commit to increasing your retirement 1% every quarter. And those incremental changes, you won’t feel the effects of it as you do it slowly. So by the end of the year you could have increased it by 3% just because of the fact that you’re increasing every quarter or maybe you’re going to increase 2% every single year but just making that a goal or a challenge for yourself to max out your retirement.
The next thing that I want you to know is that you can max out your retirement and get the company match, which you heard me talk a little bit about the myth of only getting the match, but then there are sometimes where people don’t know that oh I can get the $23,000 max, which is what the IRS said and I can get the match or and I can get the employer contribution and the answer is yes. So if you make $150,000 and the company is matching you 3%, then you would also get an extra $4,500. So there’s money to be had all around and I want you to be getting all of the money. So it’s not that you can just get the match at your company, you can also max out and you can get the company match and the employer match and all of those things.
Also, when it comes to investing in your retirement, I want you to know that you can pay off debt and invest at the same time. So the reason that people tell you to at least contribute to the employer or company match is because they don’t want you to leave money on the table. And so sometimes you may not be in a position where you’re like hey Keina, I’m paying off debt right now and so it doesn’t make sense for me to max out with my retirement, but this is where you want to practice that at least get the match way of thinking because of the fact that you’re going to get the free money from your company and you can also focus on paying off your debt.
And then lastly, this is for all the people out here working for yourself, make this the year that you start contributing to your retirement consistently in the same way that you pay contractors in your business. I know far too many people that are working for themselves and I’m not saying this to throw shade or do any of those things, but I want you, like one of the things I told you is you are your best investment. And so I do want you to create the space to be investing in yourself and you are quick to invest in a coach, you are quick to invest in a contractor and just like you pay those people, I want you to be paying yourself. And so think about what can you do this year and commit, do the thing that I did when I first started, like can I contribute $500 every pay cycle? Can I contribute $500 every single month?
And just set it aside in another account and you’re going to find that you don’t miss it and you are going to end up creating a process for yourself where you’re like oh, I’m just someone who contributes to my retirement and it’ll be something that you do effortlessly. And if you are one of my manifesting people where you know how to make money and you’re so good at making money, you’re going to be good at making money and you’re going to also be good at investing in yourself and you’re going to be doing both intentionally. So thank you so much for tuning into this episode and thank you for letting me share a little bit about my story and specifically about how does Keina invest and if you found this episode helpful, share it. Tag somebody or not tag, you can tag somebody but also tag me and I can re-share on Instagram. I love to just know who in the world, out there in the world is listening to Money Files. So thank you so much and I will talk to you guys next week.
Outro: Thank you so much for listening to Money Files. If you’re ready to take the next step to reach your financial goals, head to www.wealthovernow.com/appointment and let’s get started.
