Building a business as a First Gen Latina comes with a lot of pressure, but there’s additional pressure if you are the eldest daughter. This blog post covers how to pay yourself first and some mindset questions that will help you create wealth.
The Eldest Daughter Experience
Growing up, you have to be ready for your brothers and sisters. You have to be ready to feed your family; you have to be ready for everything.
While we still struggle with anxiety and fear of possible outcomes of new projects that we want to take on due to past financial situational problems.
We often hear that little voice in our heads that say,
I’m not ready to do that.
It’s a mindset shift that we have to do. It is okay for us not to be prepared. It is okay for us not to have all of the answers, and it is okay for us to put ourselves out there.
You’re already ready. You don’t have to get ready; you are ready. Just go out there and do it.
Combatting Fear and Reframing Our Mindset and Money Language
Most of us don’t start a business to save money on taxes. We start because we want a better life. We want to build wealth, and we want to get out there.
When we meet with a bookkeeper or an accountant, we always ask them,
How can I save money on taxes?
And they reply, “Let me help you reframe that– How can you build wealth?”
Because learning how to take every deduction is not the same as building wealth.
Because if not, your profits are going to go down. If you take all the deductions out there or try to find a way to make an expense a deductible for your business, you’re not going to be able to pay yourself.
First, you need to decide if you want to build wealth or do you want to lower that tax bill.
Picking a Business Category with the Best Interest in Mind
At the beginning of your business, if you are a sole proprietor or an LLC, and you are able to transfer your money over from your business to your bank account, remember: Don’t get discouraged if you are not making a profit right away.
Financial habits are more important than transferring over large amounts of money. Creating a financial habit enables your mindset that you are a progressing and growing business. Whether it’s just $50 every Friday, keep Friday or any day of the week that you have designated as payday, and keep the ball rolling.
You don’t launch an online business to save money on taxes; you launch an online business to leverage wealth building to create a business that can have multiple income streams. We also need to understand the true purpose of our business. And it comes back to the why.
Why are we launching an online business?
The end goal is to make a profit. But, it becomes easier when we tie that with a movement and with the intentionality of serving.
If you are a sole proprietor or an LLC and are making a significant amount of profit to consider switching to an S Corp. Keep in mind that as an LLC, your 401K becomes an expense to the business. Therefore you are keeping some of that money and building wealth. Before switching to an S Crop, open your 401k first, rather than trying to find a way to spend it on a tax deduction.
Transitioning from a nine to five into entrepreneurship, one of the first things that I did through my business was open a 401k account right away, even before I had any money. Then I focused on cash flow projection from my business.
So I started thinking, Okay, if I assign two clients a month, what is the money that I’m gonna have, so I can funnel it into my solo 401 K, which is what I have?
When you are able to fund your own retirement accounts, the autonomy of just creating money gives you so much confidence and empowerment.
Trial and Error in Our Business Lives
Some mistakes female entrepreneurs make are putting expenses that don’t actually belong to business, through the business. Because they’re piercing the legality of the LLC, instead of doing this, try intentionally working towards paying yourself through your business, where you are able to accelerate the growth of your company, attract more clients, and transfer more money to yourself.
Another mistake female entrepreneurs make is not going out and collecting the money.
Which is why you have an accounting department to collect on your behalf.
Cultural and societal norms keep us from going after the money that is already ours.
Don’t hold yourself back, with understanding and mindful intention, approach your client.
You are building a brand. You are accomplishing your ancestor’s wildest dreams. You are creating your dream life based on purpose. You got this, mujer.
If you need additional support in your business model and business finance, apply to work with me through private business coaching. I am here to meet you where you are!
Let’s build wealth juntas!
Luzy King is an award-winning Latina Wealth Coach. She became a first-gen investor after learning about investing and wealth building by accident through her MBA program in 2019. During the same year, Luzy was denied access to financial advice because she didn’t have $100K to start investing, and she made a commitment to learn things on her own and become the first one in her family to start investing. Now she is passionate about teaching women of color all of the strategies she wishes someone would have taught her in school. Luzy is a certified trauma-informed Financial & Business Coach, contributing author, and Community Leader. Luzy is on a mission to destigmatize the idea of wanting more money, more money more options. She is ready to teach women of color how to build a legacy through stock market investing and entrepreneurship.
Follow her journey and tag along.