Owning your own small business will save you money in taxes with write-offs and tax savings. It will help you build wealth and more personal cash flow with proper planning. During my career I have seen my wealthy clients save money and build wealth with their own small business. Think about your own small business or side hustle. Wouldn’t it be great to save more of the money that you worked for?
There are so many reasons that you should have some kind of project that you are building, and not many that stand up under scrutiny not to. If you’re willing to look past the risks and the self-doubt you are on your way to unlocking your future wealth.
Reasons Why a Small Business Makes Sense
Having access to people who know how to save you money on your taxes and know the strategies and how to implement them can give you a massive step up. Here are some of the reasons that people decide to start their own business
- Having another source of income to fall back on.
- Doing something that you love.
- Turning a hobby into a business that actually pays for itself and more.
- The ability to hire your family members and build a legacy.
- Save taxes and lower your effective tax rate on your income.
- Build more personal wealth.
In today’s economy it can feel like you are stuck in a hamster wheel when it comes to just making ends meet. The honest truth is that it is really hard to become wealthy by working for someone else. It is certainly not impossible to bring in one, two, three or five hundred thousand a year. But those opportunities are rare, and the truth is each and every one of them would probably benefit from owning their own small business on the side or at least a rental property.
Don’t Quit Your Day Job
I will often council my clients on the importance of having some kind of side business. There are so many options when it comes to business. Turning a hobby into something people actually pay you to do. It doesn’t mean that you need to leave your job from the career you have been building and give up on your past work. In fact, in most cases I recommend a more measured approach that allows you to keep the security of your ‘day job’ and build on small business on your off time.
I understand that not everyone feels comfortable with the risks and the potential demands of running their own business. But I would ask that you consider having a rental property or a small business on the side. It gives you the ability to continue to grow and not be limited to the income that someone else has set for you while maintaining that safety net.
The Tax Savings Benefits are Real
The “Tax Savings” can be a very powerful motivator for some to start their own business once they see how they can convert all sorts of legitimate expenses into small businesses expenses. This allows you to keep more of the money that you work for and turn expenses you were going to pay for anyways into legitimate business write-offs. It effectively lowers your effective tax rate on your income.
The Measured Approach
On a cautionary note, please know that obvious risks and in most cases A LOT to learn about how to run a business. There are also a lot of different opinions on what those things are. Here are some steps that I teach to my clients as some of the basic first steps.
- Build a plan for each and every idea you have. By planning each step before you can weed out ideas that are impractical.
- Always continue to learn. Learn about small business, learn about investing, and retirement planning. At Cash Coach Consulting we offer Business and Wealth Coaching that covers a wide range of topics and strategies that are tailored towards your personal life and wealth goals.
- Start with the basics, don’t rush to quit your day job that will come in due time, don’t put your life savings into your business. Remember that your business is the key to greater success and personal wealth but not every idea is going to work out the way you envision it.
- The last and probably greatest thing to take into and small business venture is persistence.
To quote Calvin Coolidge “Nothing in this world can take the place of persistence. Nothing is more common than unsuccessful men with talent. Persistence and determination alone are omnipotent.”
This has rung true for me more times than I can count. Seeing good ideas that were not marketed quite right or planned out properly. It can be disheartening when things don’t turn out the way you expect them. Remember that this will take time and some trial and error. But if you persist it can open a whole new world of opportunity.
In summary, I am not asking that you quit your day job or your career. All I am asking is that you consider the idea of starting your own side business or owning a rental or two. It can earn you some extra income and potentially save you a lot. You may even find that you end of really enjoying it.