What a great topic and unfortunately, one that we do not spend enough time on in our industry. Quite frankly, I think in life and in general, not many people spend time covering this subject. When it comes to finances, there are so many different facets. My goal is to help others achieve their financial goals.
I am very passionate about this. I would like to spend several weeks covering some valuable information which I believe will be beneficial to all of you.
In our industry, as in any other direct sales, representatives have the opportunity to earn incredible money. The problem, in many cases, is they are never taught good financial stewardship. Sadly, I see many stories where people become reckless with their money and end up being what I call “broke at a higher level”. If you feel that I’m describing you, please don’t worry, now is the time to change.
The first topic I’d like to talk about is that dreaded word that no one loves to hear… IRS. We are fortunate to be independent representatives, which means we have all of our money sent directly to us, and we have the opportunity to have many business tax deductions. It is important that you get well organized and disciplined so you don’t have issues down the road. I’m speaking from experience with my previous business in which I made some mistakes and ended up having IRS issues. Thankfully, I’ve come a long way since then.
No matter who we are, we all have to pay taxes. There is no getting around that. Don’t let anyone tell you anything different. Please understand that what you earn, at least 20% of that is not yours. Get into the habit, first of all, of having a separate bank account and put 20% of your income into that account. That is not your money! It is also not an emergency fund. I will talk more down the road on that topic.
Every quarter, you should have a very good idea of what you need to send to the IRS. For me, I know exactly what I need to send in every quarter so I break it down into monthly payments and send it directly to the IRS. This is a good habit to get into. At the end of the year, you should now have enough money already sent in, especially with all your deductions, to have your taxes covered.
Now, the next step is to become disciplined and organized. If you have not done this already, get yourself a daily planner. Also, there are wonderful apps you can download on your phone. There are mileage apps, expense apps, etc.
I have gotten into the habit of becoming very organized in this area for years. The first thing I do when I get into the car is write down my mileage that I’m starting with for the day. Make sure that you also keep track of all your expenses; write them down and put them in your apps. This is called being organized. It’s also a great discipline habit to get into.
Keep all of your personal spending completely separate from your business expenses. I recommend going to the bank and setting up a separate debit card; you can simply call it “RMS expense card.” This will make things a lot easier for you. I know many representatives have started their own corporation. I personally have an LLC. We have big advantages with expenses. Keep track of all of them. For example—hotels, meals while you are out on the road if you are staying overnight. Anything that involves your business, pretty much can be a business deduction.
OK, there you go. I hope this helps all of you. I know when it comes to the IRS, it’s not a fun subject but certainly when you do things right, you have no worries. My goal and my passion is for all of you to become financially wealthy so you can be a true blessing financially to others around you. Believe you can do this, have a plan, and then simply go for it!
Have a fantastic week !
Regional Sales Manager RMSNPC