How's your side hustle going? Hey, it's Jon from Financial MD, welcome to today's didactic minute.
This is a question I have to ask myself as a business owner - how is my business going? I think about this all day every day as we're hanging out in California and enjoying the views and trying some really good wine up in Napa Valley. This is not a regular occurrence. This is a little bit of a business trip and a little bit of pleasure but it gives me time to think through these questions of where is my money best invested. Is it best invested in a 401(k) like I tell my clients? In a Roth IRA or any other myriad of places to invest money – in the stock market, in the S&P 500 – and get a tax deduction at the same time or some sort of tax benefit in the case of a Roth IRA. But it got me thinking as I was talking with a couple of other financial planners who we've all got our own firms, we think about how business growth is going - are we serving our clients in the best way possible, are we growing as much as we can, are we being as operationally efficient as we can, and finally, where is our money best invested. It may be in a 401(k). It may be in an IRA, but maybe it's best, from a growth standpoint, maybe I get the best return on investment putting it back into my business because I get a tax deduction just like if I put it in a 401(k) or in an IRA but I might get a better rate of return. I might grow 10 percent; one year, 20 percent. How do we duplicate that in the market?
So these are questions we have to ask ourselves. Number one, should you have a side hustle? That's another question for another time. But if you have your own business, you're self-employed…any of those kinds of things…is it best to put that money in a 401(k), or if you've got extra money in one year, should you be putting it back into yourself, into your own business, where it might have better growth potential? I don't know. That's a question for your financial planner…something for you to wrestle with as well.
So, I'd love to hear more about it. Give me some feedback in the comments and tell me if that's what you're doing...what do you think...bad idea. Share some feedback on that. Let's help each other out. Let's get the conversation going. I love this topic and we're going to do a deeper dive onto side hustles on our podcast. Check out The Financial MD Show and share this with another doctor that you know that's got a side hustle and help a friend out.
This is Jon from Financial MD, we'll see you next time.