Five easy ways to invest your money as a hairstylist or salon owner. Invest in yourself and your future!
How to invest your money as a hairstylist can be confusing. I made a TikTok and IG reel talking about investing money, and to be honest, I had no idea it would have blown up the way it did. I mean, it didn’t go viral but LOTS of you had so many questions about what I was saying.
But just to get you up to speed, I made a post sharing how some hairstylists think they level up buying liabilities like shoes, bags, and cars when really, we should be learning to invest in ourselves. I got some people who said “well shoes and bags can be assets” and yes they can be but I’m going to chat with you about why you shouldn’t do that just yet if you are new to getting your financial shit together. I’m also going to answer a lot of your questions you left in the comment section about investing which is why I thought I’d make an episode about it.
So let’s talk about How to level up your money game [5 EASY WAYS TO INVEST YOUR MONEY]
Here’s a little glimpse into what I’m talking about:
I thought this episode was a great one to start 2022 off because so many of us are setting goals for the new year and I want to help you level up! Now I know what some of you may be thinking, Mirella, I don’t really have a lot of money to invest with. And the truth is you don’t need a lot to get started.
Everything that I’m going to share with you today is really easy tips and some of them you can even get started with just as little as $5. I want you to throw away the myth that you need hundreds and thousands of dollars to invest. I want to start off this episode by saying this; if your money is sitting in the bank it is not working for you and I want to help you make passive income.
What is passive income?
Passive income is money you make while you sleep! I don’t know about you, but making money while you sleep is probably everybody’s dream. Don’t get me wrong, there is a little bit of work involved to get the wheel turning, but when it does, I promise you will be so excited to know that you are making all the right moves to invest in your future.
Ps. I am not a financial advisor. If you have questions about finances, please talk to a CPA. I’m only sharing things that I have done to hopefully inspire you to level up and stop spending money on liabilities, but start collecting assets.
Remember: Assets represent a net gain in value, while liabilities represent a net loss in value.
So let’s breakdown How to level up your money game [5 EASY WAYS TO INVEST YOUR MONEY]
Save your money for a rainy day
This one seems Like a no-brainer but many of us don’t save for a rainy day. You’re going to find lots of financial gurus that tell you to save up to 3 to 6 months for all of your expenses just in case anything happens. But most of us don’t have that much in savings.
A great rule of thumb to get started is to have a jar, a box, an envelope, or separate savings that are not related to your business. You can put away 10% of your earned money in this secure place. Personally, I have my savings inside of a credit union. This way I can take advantage of all of the credit union member perks.
Most of you may be self-employed meaning you have complete control over the income you earn. So I would suggest getting in the habit of putting 10% of your money away daily or weekly. Do this at the end of the day or when the deposit hits, and don’t forget about those lovely taxes. You’re going to want to put away an additional 25% of your income earned. That way it’s readily available when you pay your quarterly taxes. If you are employed, congrats! Your taxes are pretty much-taken care of, so mainly focus on that 10% savings.
Once you have enough savings, you can then have the freedom to invest in assets like real estate, mutual funds, a side hustle,or a business. The list goes on, but remember, invest in yourself first by setting aside that 10%
Enroll in an IRA account
And Ira accounts stands for an individual retirement account. What’s great about an IRA account is you get to decide what and you invest your money. Now you can go through a bank that will help decide for you. If you like the option of knowing where your money is invested, you can open up a TD Ameritrade account. This will give you more control.
One of the benefits of an IRA, but specifically a Roth IRA, Is the ability to grow that account tax-free. Your account will grow without being taxed. You’ll be able to make tax-free withdrawals starting at the age of 59 ½.
This type of investment becomes a deduction for your business. You have a $6000 maximum contribution limit to invest yearly. Think of this as a $500 car note that will earn money while you grow old. And if you can’t afford $500, I get it. But create a goal that works for you, start with $100 a month or even $50 a month. You can always add more toward the end of the year. When you can afford to invest in a little more as your business grows, add to it!
Whatever you can contribute to an IRA will be a much better investment than it sitting in your bank account.
Invest your money in the stock market
OK, OK. I know this one might scare you a little bit, but you have to learn this stuff. Plus you don’t need a gazillion dollars to invest. You literally could buy a fraction of a stock for $1 if you really wanted to.
But if this still scares you, let me put it you this way….
You know how you love to shop at Target, Khols, Ulta, or buy Starbucks? Hell, I know you all dreamed of having a Tesla! Instead of spending your hard-earned money on these depreciating liabilities you are buying from these companies, why not invest in the brands you believe in? Earn money for being a shareholder!
For example, did you know that Olaplex has openly traded stock? Most of the popular beauty brands you love are publicly traded stocks! Some of them offer dividends, meaning they will pay you out just for being invested with them. All you have to do is open a trade account literally on your phone on an app! If you are new, a great one is Public.com. Come invest with me and take advantage of the free $5 you get to invest with.
What’s cool about the app is it’s kind of like a social app. It’s where people share what they are investing in and why. It’s a great starter investment app where people like helping newbies like you and me. All you have to do to get your $5 is click on the link and it will take you right to the app. Then you can follow me so we can follow each other.
Invest your money in Crypto
This one is a little controversial but if you haven’t noticed, the world is changing drastically! Everything is becoming automated. For example, did you see that robots can now paint your nails for only $5? Or how about paying in bitcoin on Venmo?
The bottom line is crypto is new and now is the best time to get in on this new currency. Crypto is a volatile market! However, there are many people who have invested with little money who have made some big bucks! I would suggest learning how to invest in NFTs and virtual coins now, so you are not left in the dark.
You can get started with very little cash since some coins are literally fractions of pennies. Honestly, don’t sleep on this and start learning how to invest in Cyrpto.
Invest your money in real estate
I know that this may seem out of reach for some of you, but getting your money right and looking into the future, owning a piece of real estate is very possible. There are plenty of other ways to invest if you don’t have the down payment right now.
Believe it or not, you no longer need a lot of money (or even good credit) to invest in real estate. Real estate crowdfunding makes it possible to own fractional shares of commercial properties without the headache of being a landlord.
Crowdfunded real estate investments require larger minimum investments like $5,000. They’re riskier investments because you’ll be putting that entire $5,000 into one property rather than a diversified portfolio of hundreds of individual investments, like your IRA or Trade account.
The upside is owning a piece of a real physical asset that’s not always correlated with the stock market meaning it’s so up and down. And I don’t know about you, but owning a piece of a physical asset vs some YSL shoes gets me super excited! Just knowing the return on my investment is much more than what shoes can offer me. Overall, you share the risk and cost with other investors, plus you have no responsibility for maintaining the property or doing the paperwork to buy it!
I think real estate crowdfunding can be a great way to learn about real estate investing. This also diversifies your assets. I personally wouldn’t put all of my money in one basket, but they do make a great investment option. If owning real estate sounds like something you want to do, go back to number 1! Start saving that 10%!
