September 29, 2017

WTOP Interview: Smart Financial Strategies for Women Entrepreneurs

LISTEN NOW! If you are a business owner, take advantage of these smart tips to financially fuel your business.
Nina Mitchell, Principal, Senior Wealth Advisor & Co-President, Colony Sports & Entertainment

Interview Transcript:

HILLARY: This Friday is American business women’s day and it’s meant to honor the contributions and accomplishments of millions of women in the workforce, including the 11 million women who own businesses in this country.

SHAWN: Well in honor of the day Nina Mitchell; cofounder of Her Wealth and Partner at Bridgewater Wealth in Bethesda is here with us to talk about smart financial strategies to grow your business, good to have you back Nina!

NINA: Thank you, happy to be here.

SHAWN: You're a business owner yourself, so give us some idea, what are some of the strategies that work well for you when you first started?

NINA: I started my wealth management business about 11 years ago after having worked as an employee for 30 years and for me personally, it was the right time in my life financially. So, for those starting a new business, here are a few things that worked well for me.

·      Get the full support of your family members and make sure to review your family finances very carefully before you start.

·      And ideally you should have personal savings available to cover at least 12 months' worth of your living expenses and this should be separate from your business capital.

·      And I did a lot of advanced planning and created a startup checklist, so certainly don’t hesitate to use a business specialist to help you with some of the not-so-fun details like choosing the right type of business entity for tax purposes and setting up a good accounting system.

HILLARY: Well let’s talk about taxes for a minute, because that’s a really big concern for folks who are going out on their own?

NINA: Our listeners actually might not realize that the majority of women owned small business owners are sole proprietors and tend to work in the services industry. When we work with business owners, we try to claim as many tax deductions as possible, so here are three that you might want to consider, and of course, always consult your tax advisor.

  • ‍If you’re starting a business, you can deduct up to $5,000 of qualified startup costs like market research and legal fees in the year you begin your business.
  • Business owners can supercharge their retirement savings by setting up either a step IRA or a solo 401(k) and this could honestly be the best tax deduction of all. SEP IRAs and solo 401(k)s tend to have higher contribution limits than the traditional IRA and if you’re 50 or older, the maximum 2017 contribution is the lesser of your net earnings or $60,000.
  • Health insurance premiums are another great tax deduction. If you’re self-employed and your business has a net profit, you can deduct the health insurance premiums for you, your spouse and your dependents directly on your 1040 page 1 instead of as an itemized tax deduction, so that’s a great benefit too.

SHAWN: Where can women find the cash to fund their startup or maybe expand their venture?

NINA: Well, women owned firms do face an uphill battle when it comes to raising capital and so one savvy way for businesswomen to sidestep that battle is really by leveraging their personal assets, like their portfolio and using that as collateral either to margin your portfolio or using it as collateral for a small business loan or even using a home equity line, and these can be really attractive especially in today’s environment of low interest rates. The other thing is that small business owners are typically multitasking, working long hours, so it’s important to have an advisor that can objectively review your numbers and make sure that you’re not risking too much of your own personal net worth and you have a good handle on your business profitability.

HILLARY: Alright, thank you very much Nina, good to see you.

NINA: Thank you.

HILLARY: Nina Mitchell with Bridgewater Wealth in Bethesda, for more on starting and growing your business go to WTOP.com search Her Wealth.

Tweet

Shawn: Now you hear all kinds of deals about leasing cars, how can you negotiate a better deal if you want to lease?

Nina: Okay, well many people don't realize that they can actually negotiate the sticker price on a leased car in the same way that you would do that if you're buying a car. And since when you lease -- when you're, you know, your lease payments basically cover the depreciation, the difference between the sales price and the residual value. So it's definitely in your best interest to try to reduce that sales price as much as possible because then you'll pay you know, smaller dollars over the life of the lease. Make sure you pay attention to the down payment at the lease signing. And so here's an example, you might see an ad that says you know, lease payment is only 1.99 a month and that sounds like a great deal for thirty six months. The catch is, is that it might require a $3,600 down payment. So, if you amortize the down payment, then actually that 1.99 special, becomes 2.99. So, you really have to kind of look at total costs. 

And then lastly, dealerships use the term, money or lease factor, when they're calculating your financing costs and a lease factor is not the same as an interest rate. So, you have to make sure the dealer converts that lease factor into a comparable interest rate so you know what your financing charges are. 

Shawn: At the end of the day, does one method wind up being more expensive more often than the other, or can we tell that?

Nina: You know what, it really depends on how long, if you're going to hold the car for a long time, you're better off buying. But if you know, and if you're not, if you just really enjoy driving and you want to have a new car, then go ahead and lease. I mean, there's pros and cons to both, to be honest with you, it's not one size fits all.

Shawn: Alright Nina, great. Happy Thanksgiving to you. Alright, Nina Mitchell is with The Colony Group, for more go to wtop.com and search Her Wealth.

Sign up to receive the guide

Consider this your training manual to get and stay financially fit for life!

Thank you! Your submission has been received!
Oops! Something went wrong while submitting the form
Nina Mitchell, Principal, Senior Wealth Advisor & Co-President, Colony Sports & Entertainment

With over 25 years of finance, tax and investment advisory experience, Nina advises an elite group of professional athletes, executives and high net worth individuals. She is a driving force behind Her Wealth, Colony's initiative to empower women with financial knowledge, resources and confidence.