Do I follow my own advice? It’s a reasonable question to ask of anyone who gives advice. After all, you might question an overweight dietician, a broke financial planner, or a CPA who owes back taxes. They’re supposed to know better! Of course, as you may understand, knowing and doing are different things. So, here’s how I follow my own advice.
Separate business and personal
I separate my business and personal finances and I have since the start. This one is a biggie, and I’ve written about it here. Keeping my business and personal finances serves a couple of purposes. First, it makes it much easier for me to know how my business is doing! Using separate bank accounts, credit cards, and PayPal means that even if I weren’t working with a bookkeeper I could easily compile my income and spending for reporting and taxes.
Secondarily, it makes it easier to maintain the liability shield I get from my LLC. Treating my company as a separate business on the financial side can help protect it on the legal side as well.
Estate planning
I recommend that clients, even those without a spouse or children, go through some basic estate planning steps. Not only did my wife and I do those basics but we’re now meeting with an estate planning attorney to take care of some of the bigger things. While we’re not at the point where we need a trust or anything (I wish I were that well off) we did just have a kid. Man do kids make these kinds of things more expensive.
Additionally, we moved our investments in the past year. As a part of that process we not only made sure that we had appropriate primary beneficiaries but we added contingencies to make sure things got to our daughter as needed.
Investing
This is a big one. First, all of the money that my wife and I have invested, outside of her 401(k) which we don’t directly control, is invested exactly the same way as our clients are invested. We went through a needs and risk tolerance review, moved our money to the platform that I use with clients, and add to those investments on a monthly basis.
Second, we used our investments we had in place (my previous 401(k)) to manage our taxes while I was in grad school and getting the business up and running. Basically, those were low income years which meant that we were likely to get a refund. We used that time to aggressively convert our old 401(k) accounts to Roth IRAs. It killed any hope of a refund but gives us tax free money in the future. Short-term pain, long-term benefit.
Plus, when my daughter was born we opened a 529 so we could start funding her college.
I have my own financial planner, CPA, attorney
If it makes sense for my clients to work with me then it for sure makes sense for them to also work with an accountant and an attorney. My wife and I take that advice to heart.
First, despite me being a financial planner we have our own financial planner. She helps us see things we might miss because we’re mired in our day to day and is someone who can give us an answer that works for both spouses.
We also use a CPA, Ernest Jones. He’s the same one I refer clients to. Even though I am capable of doing my own taxes having someone else who I can hand it off to frees up time for me to do my own work. Plus, it gives me someone to bounce ideas off of and who can act as a sanity check.
I mentioned before that we’re meeting with an estate planning attorney but I also have an attorney on retainer for the business. That way, if I have legal questions, need a contract reviewed, or have some other issue I have a pre-existing relationship and can quickly move to resolving any issue.
Business planning time
I recommend my clients spend time on the business and not just in the business. That means allocating time to think through their strategic planning, review financials, set goals, and overall make sure that they’re running their businesses well. After all, if you’re just working in your business you’re restricting your potential heavily. If that’s all you want to do at that point you should hire someone else to do the business stuff and you work the job. Nothing wrong with that but it’s quite different than running it yourself.
Anyways, I set aside the last two weeks of the year to do business planning. I go offsite, work without internet for at least a day, and work off a set agenda to make sure that I’m hitting all of the important areas. That means I’ve reviewing the previous year financials, doing projections, making a marketing plan, figuring out my conference schedule, putting together a list of people I should connect with, reviewing my hiring plan, setting goals, and providing staff feedback.
It’s a lot of work but it helps me start the year in the right place. I also review the plan quarterly to gauge how I’m doing and see if there are adjustments I need to make.
Outsourcing
As I’ve earned more revenue I’ve outsourced more of my tasks. That way, I can spend more time working on the things that I’m best at and that have the biggest business impact without dropping the ball on other tasks.
So far, here are some of the things I’ve outsourced. First, I hired Jay to take notes during client meetings, maintain my CRM and internal data, make sure we’re scheduling clients, do initial planning work, and help me improve internal processes.
Next, I outsourced several important tasks that I don’t enjoy doing. I hired a bookkeeper, have someone who does social media scheduling, have an outsourced compliance team that helps with regulatory issues, and have a group that helps with tech stack selection and errors and omissions insurance. All of those are very important administrative tasks but not necessarily something I love doing or need to focus on as a part of my normal work.
I recommend clients outsource as they can and I do it as well.
Conclusion
I do! It’s all well and good to have a plan or to seek advice but you need to make sure you also follow it.
