Barbara Sloan 0:02
I was hired to do accounting, finance. And also they tasked me with setting up an HR department and employee retention. So they I got to see all of the sides of benefits and how they supported the financial health of an employee. And I was like, Oh, I just remember thinking like, Oh my God, why didn't anybody help me? Why did I not know any of these things for so long, and I was able to make so many mistakes.
T-Minus 10 seconds. Welcome to the journey to launch podcast with your host jameelah. So frogs as a money expert who wants her talk, she helps brave juniors like you get out of debt, save, invest and build real wealth. Join her on the journey to launch to financial freedom in three, to one.
Journey to launch is supported by first republic bank. Have you ever experienced a relationship with a banker who was available to answer all your questions, even by phone or email doesn't exist? You say it does at first republic. At first republic everyone gets a personal banker who's ready to sit down and answer your questions. No matter how complex as someone who talks about money for a living, even I still get confused or have questions about my money. No question is too small or complicated. I know I can call up my personal banker Linda, who is dedicated to helping me make the right decision. You deserve that too. And did you know that first Republic's commitment to extraordinary service extends beyond its clients? First Republic is committed to strengthening the communities it serves through meaningful partnerships with innovative nonprofit organizations. To learn more, visit first republic.com That's first republic.com Member FDIC equal housing lender.
If you want the episode show notes for this episode, go to journey to launch.com or click the description of wherever you're listening to this episode. In the show notes, you'll get the transcribed version of the conversation, the links that we mentioned and so much more. Also, whether you are an OG journeyer, or brand new to the podcast, I've created a free jumpstart guide to help you on your financial freedom journey. It includes the top episodes, so listen to stages to go through to reach financial freedom, resources and so much more. You can go to journey to launch.com/jumpstart to get your guide right now. Okay, let's hop into the episode.
Jamila Souffrant 2:39
Hey, journeyers Welcome to the journey to launch podcast. Today's guest is Barbara Sloane. She's the author of the book tip, the life changing guide to financial freedom for waitresses, bartenders, strippers and all other service industry professionals. She was a homeless teen who dance for dollars and definitely did not graduate from college. She is now a personal finance expert and money coach and has spent two decades working in every imaginable position in the service industry, all over the country, in addition to owning and running a woman owned construction company in Manhattan. And so I'm really excited to have Barbara on the podcast because this is definitely a topic that I've people have been asking me for, for people who work in the service industry, how they can obtain financial freedom. And I just can't wait to dive into welcome to the podcast. Barbara.
Barbara Sloan 3:29
Thank you. I'm so excited to be here.
Jamila Souffrant 3:32
Yeah, so I was saying that I get sometimes some pitches. And you know, a lot of people want to come on this little podcast. And what stood out for me with your topic was I thought it was so relevant to talking about how service workers can also achieve financial freedom, you know, with inconsistent paychecks, or just some things that I don't even know that, uh, barriers to how to achieve freedom and okay, this is the perfect guest to have on and talk about it. So first, I'd love to start with defining what the service industry is like, you know what jobs incorporate that. And then we can dive deeper after that.
Barbara Sloan 4:07
Yeah, so service industry professionals, to me, and I'm sure this answer changes with whoever you're speaking to. Anyone who's providing a service, but typically when people are talking about the service industry, they're talking about people who work in restaurants, clubs, people who work for tips, hairstylist, you know, people who work in beauty and body services, sex workers, strippers, jobs in places like that, right? So yes, everyone, in some capacity is providing a service. But when people talk about service industry workers, they're talking about people who work most specifically in restaurants, bars and clubs. And I think the reason that it's important to define service industry workers to restaurants, clubs and bars is because service industry professionals in those groupings are the only group of employees that have an entirely different minimum wage than every other worker in the United States. And that wage is federally $2.13 an hour. In addition to this laughable minimum wage, which is still the standard across over a dozen states, most tipped workers do not have access to a 401 K, they don't have access to health insurance, they don't have access to HR, which provides them with those automated systems of getting into a 401k of understanding what their healthcare options are. They don't get access to paid time off, they don't get access to pre tax benefits. I mean, I can go on with like the 20. Other benefits that most nine to fivers get. But service industry, people typically do not get access to traditional benefits. And when you look at the average millionaire in this country, they're a millionaire because of their 401 K. Right? And that is all because of someone in HR who gave them a form, that they checked a box on that they're like, oh, yeah, satisfied this 10% For me, every year, I don't have to see it, I don't have to think about it. There's no tension in my life about it. I don't have to say, Oh, should I do it this week? Or should I do it because I have the car broke down, you just totally forget about it. And that's how most people in America become wealthy today. And service industry, people, ages, the most economically disadvantaged population in the United States, because of a lack of financial literacy. And because of access to these benefits, which are the traditional way that people build wealth in this country. So on top of that, it's also an industry where people get to choose the amount of tax that they claim, they get to set what they claim for their income. So if you're not claiming your income, and if you're not educated about why you need to be claiming your income, then you're ineligible for the biggest safety net ever, which is supposed security. If you're not claiming your income, then that safety net, which is the biggest safety net provided for our country, is not available to you. Same thing with unemployment. So people during COVID, who were working in the service industry didn't have access to unemployment outside of maybe the booster that was provided for a short period of time. So those are just some of the ways that service industry people are left out.
Jamila Souffrant 7:08
Yeah, well, I mean, this is Oh, my gosh, so you defined what service industry workers entails. And then I mean, you just listed just like, why starting off, potentially achieving like levels of freedom, paying off debt or getting into debt? Like they just have different financial challenges. I want to go back a little bit to this idea, right, that, you know, as a service worker, you have the lowest minimum wage, what do you say it was?
Barbara Sloan 7:35
$2.13 An hour federally.
Jamila Souffrant 7:38
So they're depending on the tips from patrons from customers, right? Mostly?
Barbara Sloan 7:45
Yeah. So you're you're living there's over 4 million people in the United States who are living solely or partially based income. Right. So those are people who depend mostly on their tax, that's $2.13 that gets eaten by any taxes for any forced payment or an optional claiming that you make of your tip, you're not getting a paycheck in most situations.
Jamila Souffrant 8:06
Wow. All right. So where do we begin? Like, so I guess there's different levels, like I guess, depending on the type of place you work, like the type of restaurant and the type of customers and patrons, and this could just be maybe my ignorance, right? Like, I'm assuming if it's more a high scale, more money, they have people working in those services, potentially will get more and do Okay, there's one thing right, but then it's like, do they have the ability to manage what they're making and create wealth from that. And the second thing is, what if you're not working in places that were, the average cost of the meal is 50 $60, where you may get more, but you're working somewhere where it's not a lot of money, right for the food or for whatever the person is enjoying, then you're not going to possibly get tipped a lot. So where do people begin either way, whether they're working in a high skill upscale, and maybe they're still not getting too well? Or at the lower of the scale of budgets? How do they even begin to start to manage or the little money that they're getting?
Barbara Sloan 9:07
As a money expert, you know, that it's not about the dollars that you bring in, it's where you put them and where you deploy them that matters the most, you can be making 40 $50,000 a year and end up retiring early and having a prosperous future, you can make $200,000 a year and still end up broke. Right? So we all know the example of the janitor made $40,000 A year and retired early and ended up with millions of dollars in his bank accounts. And so we know that that's possible on a lot of different income levels. If you are somebody who is a low income earner or you're at a place where you know, you just can't make the needle move when it comes to either saving or downsizing your expenses. The first thing I usually recommend for coaching clients is that they look at other opportunities for employment. Right so I'm not a snob. It doesn't matter if you're working high end, low end, that doesn't even mean that you make the most money in those establishments, right? You go into the establishments, you have a seat at the bar at the club at the restaurant, and you take a look at the menu, right? How much is a typical sitting, and how many people do see turn, how many tables or sections or bar seats does a person get, you have to have conversations with those people. I know people who make way more money serving family style at a restaurant than a lot of sub workers that I know who you know, we're breaking in piles of singles. So it's not necessary, necessarily true that you make more at a higher end establishments than you would at maybe a dive bar or a, you know, a mom and pop restaurant. So I don't think there's rules like that, I think you have to do your research on the establishments and talk to the people that are working there to kind of get a sense of what the income is going to be like. I will say from my own personal experience that I always made more money in bigger cities, regardless of where and what type of environment like there's this hierarchy where strippers sex workers tend to think that they make more than bartenders. And bartenders tend to think that they make more than servers. But that's not necessarily always the case. If you're choosing a role within the service industry that you want to explore, one, take a look at your personality, what do you think works best for you? You know, are you someone who's great at putting boundaries that place in place for yourself? Do you have loads competence, you may want to lean towards one, one type of establishment over another. So I think knowing yourself and how you operate is, you know, number one, how well you are at putting boundaries in place number two, and then go from there and research what the money could look like in each establishment.
Jamila Souffrant 11:47
Right. And there is a difference between someone who's like that is their main job and form of income. And then, you know, we talk about often like how people can earn extra money. And sometimes that could be in the service industry after whatever main job they're doing, potentially, if it makes sense. And there's a difference there too, right? Because the person who was working full time in the service industry, the majority of their money is potentially be inconsistent. There's no, okay, every two weeks, I get this paycheck. And I know what it is. And that comes up a lot for questions. People will say like, Well, how do I budget without it without knowing how much I actually make? So what do you say when it's like a person like that, who has inconsistent income can't really determine? Or it feels like they can't determine what they can make every two weeks? And how to get started there?
Barbara Sloan 12:33
Yeah, I refer back to the book on this a little bit, I have a whole big Chapter on Budgeting, which I think is not only great for people in the service industry, but anybody who works in a fluctuating income gig worker, anytime you have a fluctuating income, you have to change a little bit how you budget. And so one of the biggest things I talked about is building in buffers, whether it is rounding up in certain areas, whether it's paying yourself first in certain areas, so that you can like stack up some savings in front of those inconsistent bills or inconsistent income we those are the two big bigger things that I tell people to try to implement when they're working on a fluctuating income, so forth.
Jamila Souffrant 13:09
Can you give an example of what that looks like in a budget?
Barbara Sloan 13:11
Yeah, let's say that you have an electric bill. Right? Well, so we'll start on the expense side, because that's how most people understand that you have a fluctuating expense bill, that is, you know, it's $100 in the winter is your electric bill, and then you put your AC in, and it's $200 in the summer. So there's two ways to get to that point of being able to pay that off, right, you can either save up in front of summer for those $200 expenses. So maybe you do that by Oh, from January until June, I will allocate $150 Each month so that I'm ready and have the money for When summer comes and my electrical bill is bigger, right. So that's, that's more rounding, rounding up. And then the other one is building a bigger buffer where you would do it all in a lump sum, whether it's January one, you slice off a big chunk, and you're like this 600 bucks is for my summer electric bill, or right before June 1, this is a big chunk that I'm saving for my electric bill. So you can do that based on your own expenses. And then oftentimes also in the service industry. It's very seasonal work. Right? Like if you're in a club environment, there are months that are dead, right summer, sports, clubs are dead. Those are great months for people who work in a bar and restaurant who have outdoor seating, right? So it depends on which way your income fluctuates, whether it fluctuates more, based on the season when you have maybe higher or lower expenses.
Jamila Souffrant 14:36
Right, that makes sense. Thanks for giving that example. Now, I'm sure you've done research for your book in this and I'd love to understand just from an outsider looking in, you know, for most people, especially if they're doing it full time, I would just assume it's that's not where they want to necessarily be unless they are looking to work them themselves up. I mean, I'm thinking about a restaurant maybe in terms of like being the manager of the restaurant de or maybe owning it, like, but most people like that's not what they want their long term career to be. But you can correct me if I'm wrong based on your research,
Barbara Sloan 15:08
I think you're wrong.
Jamila Souffrant 15:10
Barbara Sloan 15:11
So I belong to a bunch of fire groups, and one of my favorite groups, they'll talk about sequence of return risks. And they'll talk about what they want to do when they pull the plug and they become retired. And oh, what if the market drops and you have to go back to work for the first few years after you retire? And every single time we'll be like, Oh, well, I'll go back to work. And then someone will press say, Okay, well, what will you do, because you have this career gap, people will say, Oh, I'll go back and be a barista. I'll go back and be a bartender, I'll go back and do a server. And I'll jump in, I'll say why. And they'll say, that was my favorite job ever. Right? I think anyone who's worked in the service industry knows that that works is a blast, you're having a lot of fun, you're getting to especially if you're an extrovert, you know, you are getting to engage with people you are getting to build up the energy at the establishment that you're working, you're getting to connect, you're going to ask people questions about themselves, like if that is something that you enjoy. And that is your craft, where you are, you know, really good at that social engagement, you're really good at turning somebody's day around, you're really good at being the maybe the only smile that somebody gets in a day, you're really good at serving craft cocktails, or presenting food or doing a dance and you know, choreography, like, I think people who are in this industry, a lot of people love it. And if you had told me at 20, that I could achieve financial freedom, and stay in the service industry. And I just had to set the systems in place. And I just had to automate some things and learn how to invest, I would have jumped at it, I would have absolutely jumped at it.
Jamila Souffrant 16:40
I can see that. Because I guess I'm also speaking from my own experience of going into, like restaurants or bars, and I'm just like, oh, this person does not want to be here. Like there are some people who were like, serve me. I'm like, they were meant for this. Like they're so joyful, and they're into it. Right? It doesn't seem like they're pretending like you could just tell like, this is like what they enjoy doing. And there are some people, I'm just like, they do not want to be here. Maybe it was a bad day. But I just always had the impression that if they had a choice, they'd be doing something else. But I know we can't speak for everyone either. So I know that this is like how can we speak for every person listening, like, or every person who's doing a job like that. But it's just interesting to hear that point of view.
Barbara Sloan 17:20
Definitely. And I have no skin in the game. There are people, some clients that I have talked to interesting industry and people that I talked to out of the industry, it's not for everybody. And to your point about people having a bad day. I also think that a lot of people, there's a lot of hazards in this industry. And one of the hazards is also burnout, right? Working 5060 hours is not sustainable in any career long term. Right. And so when you don't have those systems of paid time off, the average American has seven holidays and vacation days by PCOS. It averages about 20 working days, which is a month, a month off every year, these 4 million people don't have access to that. So they're operating and working every single week without paid time off. You know, so if I think if the systems were in place, a lot of the people who are already in this industry would be happier and healthier people. If you had a month off, you can take days off when you weren't feeling good. You're feeling it, I think you'd see a lot more joyful people in the industry.
Jamila Souffrant 18:23
Yeah. And it reminds me of a past guest this was so early on, I'll try to link to her episode actually. And she worked as a server. And she also did some government work or in corporate work. And she was like she preferred serving way better. She was able to get her tips, it allowed her freedom and flexibility. So she was able to work on other things on the side. So I'd love to learn a bit more about your story. Right? And maybe we can use that as an example. Obviously, not everything will be relatable to everyone. But I think I always love seeing like, okay, so how did you do it? In your bio, it said, You were homeless at one point. And now you're financially free. And you can explain what that means. But like, how did you go and work and use your service industry jobs to get to this to this level?
Barbara Sloan 19:04
Yeah, so I didn't have a lot of financial literacy growing up. And the only thing that I think that was modeled Well, for me, as my parents had a windfall of $6,000 as inheritance and that afforded them the opportunity to buy a home when I was young, that was right on the edge of Detroit. So homeownership was modeled for me, which was something that was great because it taught me what was possible. And I eventually became a homeowner at the age of 18. But because I had no financial literacy whatsoever, it was 100% financed. And I took out 13 credit cards and Max them out to renovate the house myself and update the house myself
Jamila Souffrant 19:44
At 18 years old? How did you do that at 18?
Barbara Sloan 19:48
So this was 2003 and they were giving away loans at that point right there was the you know, sign your name at the bottom line and they'll give you a loan for anything. So I put myself in a really hoarse situation financially, that I ended up trying to run away from. I was in debt for a really long time. And I made, I made so many mistakes. I've truly tested the limit of the credit system, I have had libraries reports as my credit score, I have medical debt from other countries reports my credit score, like I have put myself in, in really bad positions, because I had no financial literacy. So most of the time, I was working two jobs, I've held two career paths, pretty much in tandem. I've worked construction during the day and service industry jobs at night, I like to say during the day and 30 in the evening, but a lot of times, I was only working service industry jobs. So how all of this kind of came to be in 2013 2014 is kind of pivotal to the story because I moved to New York with my wife. And we have like $700 in her pocket. And I got two jobs. The first job was bartending at Coyote Ugly. And so I'm singing and dancing on the bar. And the second job I got was working on Wall Street for an unregulated firm. So they were part trading floor and park independent sales organization, which essentially means loan sharking, right. So it was a huge education for me on the markets on financial services and predatory lending. After like the third trader went off to rehab, I was like, I gotta get out of here, I gotta get back into construction. So I went and applied for a job at the company that I now while I was there, I was hired to do accounting and finance. And also they tasked me with setting up an HR department and employee retention. So there I got to see all of the sides of benefits and how that supported the financial health of an employee. And I was like, Oh, that's a big puzzle piece for me is seeing all of these ways that these benefits support people, which I had never had access to. And then we were working for these really high net worth clients. And I was getting to see how wealthy people thought about their money and their budgets. And so I just remember thinking like, Oh, my God, why didn't anybody tell me this? Why did I not know any of these things for so long, and I was able to make so many mistakes.
Did you know I broke up the path to financial independence into what I call five journeyer stages. That's right, there are five stages that you have to travel through to reach complete financial independence. When you know your stage, you know what to focus on and how to move on to the next stage, I created a free one minute quiz. To help you determine what stage you're in at you take the quick quiz, you'll know where you are on your financial independence journey, the main thing you should focus on Plus, you'll get a curated list of 10 journey to launch podcast episodes to listen to, that will help you for your specific stage. Go to journey to launch.com/my stage right now to take the free quiz, that journey to launch.com/my stage.
Jamila Souffrant 23:03
So I want to go back just a little bit because you talked about being hired into the construction company. I love how you said that now that you own can wait to get to that part of the story. But go back a little bit. So what what were you doing construction before that job in order to have the qualifications or them to have the competence to give you all those roles?
Barbara Sloan 23:27
Yeah, I have no credential. I didn't graduate from college, I don't have any certifications. I'm not a financial CPA, I'm not a you know, a stock broker and none of those things. But how I got into construction was when I bought that house at I think I just turned 19 And I was a receptionist at a general contractor's office as well as working some other side gigs at the time. And I think that sort of gave me the confidence as like, oh, I work for GCI. I'll know how to renovate this house. And I spent a lot of time at the library, looking up how to do things this is before you shoot TV. So that experience led to another construction company doing you know administrative stuff, and another construction company, I moved around a lot. After I turned 21 I moved to California. And so I got a job there waiting tables and dancing and also working for a developer who did construction. And then I decided I wanted something to try something different. So I moved to Las Vegas and I like to say that I was a side show show girl. And I worked in construction there as well. So it's just always been I've always gotten the service industry job first whenever I moved somewhere and then I would always later on kind of find a construction job that would you know, would allow me to work both. So that's a little bit how that career path came to be. I think having two jobs is a great strategy for people. When times are tough at one job and even if you want to do this in the service industry, I think it's a great way to to build out your income, like I was talking about, if you work in the club and you have seasonal months, like in the summer, when it's slow, you can go and work at a, you know, an outdoor bar. So I think having multiple jobs if you're the type of person that can juggle that sort of setup and schedule, can support you financially very well. And so I've always had more than one job
Jamila Souffrant 25:19
with this. Right. So now you move into the construction company. Are you still working on the site? Well, I'm assuming Yes. What your service industry jobs?
Barbara Sloan 25:29
Yeah, I was working at Coyote Ugly while I was starting at this job, and then 2016 hit, and the political climate was really rough on me. And I sort of did a media blackout. And this is when I discovered personal finance as like, a genre. So I started listening to so money. And that was my intro podcast. And from there, it just been off to like 1000 other books and blog posts. And you I'm sure you know how it goes.
Jamila Souffrant 25:57
Barbara Sloan 25:58
Once you're in you're in. And I never saw anybody who looked like me. Who had made their career in the service industry, talking about the unique opportunities and the unique struggles of people within the industry. And I just thought that information is not out there. Maybe I shouldn't providing that myself. And so for a long time, I struggled with who am I to write a book and but it's an option for people. And I think that there's not enough good modeling in this industry. And there, there should be a whole lot more a whole lot more people in this.
Jamila Souffrant 26:31
Yeah. And I mean, talk about just the skill sets, working in the service industry, like that means you're serving people, whatever that is, right? Whether there's a dish or drink a fantasy, right? It's pleasure or something, and you have to be able to sell that. And you know, you think about like online businesses or starting your own business, or even working in corporate how like those skill sets, if you're doing well at that, at how they translate so well to being able to navigate social relationships or negotiate and, and be likable, right? Like that is, I would think like, if you're good in those areas, as a server, like you could thrive mostly in any career that you choose.
Barbara Sloan 27:11
Yeah. And I also think that the money side of things, and when you're a server or bartender, you are doing quick back of the envelope math constantly, constantly. It's the same skill set that you use when you're doing deal analysis, when you're anything you're doing. As a business owner and entrepreneur, you have done in the service industry, all of those skills are transferable, right, you said the social skills, which I think in some ways is the most important skills, you can have a conversation, you can ask good questions, those are the two biggest things you need in business to thrive is to be able to ask good questions and to be able to relate to people, right. And then if you understand the nuts and bolts of the money coming in and going out, which in the service industry, you know, you have your own purse, you have your own bucket, you have your own cash drawer, you have your own billfold, which however you're managing it in your system, you get so much experience, you're put in a lot of strange situations as well. A lot of interactions are really strange. And so you are having these live auditions of how to react to strange situations on a pretty much daily basis. And so I think anything the business world can throw at you and a lot of other industries can throw at you you're prepared for,
Jamila Souffrant 28:21
Right and just like the competence and rejection, because some of these jobs like I've been in strip clubs before. And I've always marveled at how confident the women working there were and how like they would go after what they wanted. And if someone wasn't interested, it was like onto the next. And I thought I literally had these thoughts while I was at club back in the day. And I was just like, if I could have that confidence in anything else that I did outside of like, somewhere like this, like I would not fail at anything. And I was just so amazed and inspired. So I just think like, in general, if you are working in any of these service jobs that we're talking about, to have the confidence in yourself that literally if there was something else that you wanted to transfer those skills to that you can do really well.
Barbara Sloan 29:06
Yeah. And I think that's the point I'm driving home is that income is typically not the problem in this industry. Right? It's not it's not by and large an income problem. Most times it is people not having the financial literacy to understand how to save how to invest a lot of people, especially people who work on the spicier side of things. You know, whether they're in strip clubs, or they're in sex work, they don't understand whether or not they can claim their income. They don't know if they can have certain bank accounts. And a lot of people live in fear and shame in those roles. And so, money is just another thing that's connected to that. So the income comes in, but it goes right out because of a scarcity mindset. You're either fearful that someone will come and take your money, you're fearful that something will happen to you and so you want it out of your hands as soon as possible. For people in the service industry have a whole chapter in the book about mindset because it really is very important for people in this industry to understand that you can set up systems to protect and support yourself within these roles. And that you have to, most people don't have an emergency fund. And I will tell you that if I had had the level of emergency fund that I do now, while I was in the service industry, I could have gotten myself out of a lot of scary situations, I could have said no a hell of a lot more to certain gigs, certain offers to certain even situations in a normal course of service. But I could have just been like No, right. And so I think the emergency fund would be such a feature in this industry for people to have, it would be a game changer. And then you add on things like investing and setting up things for retirement. And it's a it's a game changer. So I think people in the industry are really comfortable talking about money, like you said, there's that confidence, you're confident that you can make income, you're confident in your skill sets, you're competent in what you're doing. The conversation stops, their conversation stops at the income side, which is super, super sexy and super fun. It doesn't carry over into the money management side and to the execution of setting up those benefits systems and investments for yourself.
Barbara Sloan 31:13
Right? Well, when it comes to that, what are the investment vehicles that they can have access to what they do have access to that they don't know about that they should be using? Yeah, so it really depends on how your employment is set up. Whether you are a W two employee, whether your employment employer is classifying you as a 1099, if you're a W two employer, then you're going to look more towards IRAs and a brokerage account, if you're in a 1099, you're going to look more towards a solo 401 K, things like that. And a brokerage account will support anybody in any type of employment.
Jamila Souffrant 31:45
Right. And I mean, I advocate like so for family members who, who are still maybe earning minimum wage or not have a 401k job, I always tell them like you can open up your own Roth IRA, or traditional IRA, and invest in there directly on your own. You don't need an employer to do that. And it doesn't need to be a lot. I think, too, is that misconception that if it's not a lot of money, if it's not 1000s of dollars, and what then why do it and it's just like you could start small and build your way up.
Barbara Sloan 32:17
I had a client who had two jobs, she had a sort of nine to five part time job for health insurance and for benefits, and also the service industry jobs, she had access to a 401 K. But when we talked about putting money into it, she was like, No, I don't want my employer to know how much I'm making at my other job, I don't want them to know that I could max this out. So don't want to max out this 401k because then they'll know I'm making really good money, and they might not give me more money if I want to ask for it. And so that's when you have to turn towards things like brokerage accounts to the separate IRA.
Jamila Souffrant 32:52
Barbara Sloan 32:52
So it might not make sense math wise, right and stuff, most math sense, but do what works for you.
Jamila Souffrant 32:59
Right. The other thing you brought up earlier, which I thought it just important to circle back to is this idea of not reporting your income, you know, like it's good to get the cash and say, All right, I don't have to deal with like taxes or the government. But it can also turn around and be a disadvantage. Now when you are looking to potentially qualify for whether that is a mortgage government programs. So let's talk a little bit more about that, why it's so important. And how maybe some Is there a level at which you shouldn't claim or No, like no matter what you should be claiming something, or some income because it helps you so much more than you think it hurts you.
Barbara Sloan 33:34
So everyone should be claiming some income, everyone should get first, claiming all of your income is what's required by the law. Most people either fall into the camp of I don't want to claim a lot of tips, because I don't want to pay those taxes. And they have that sort of short term thinking or they found the camp like, I don't really know how much me so I'll either just guess, or, you know, just put this number on here. Maybe they're not tracking their tips, maybe their employer doesn't track for them. There are a lot of employers who do automatic tip planning. And that can be even more they can be claiming more than what you actually even earn, which is super messed up, especially when you consider timeouts, whether it's like jumping out of a bar back or your house fees, or however you're having to tip out. So when you're planning your income, most people fall into either I don't want to pay taxes on it, or I don't really even know what I'm paying your taxes and claiming your income is very important. For those reasons for qualifying for home, qualifying for good rates on a home. More importantly, right, qualifying for maybe a car loan, unemployment, Social Security. The government doesn't really care. The tax side of the government doesn't care what you're doing. They want your money. They don't care what you're doing. If you're a fetish worker, and you're buying things like ball gags and whips, those are business expenses, claim it claim all of your income, keep your receipts for everything you purchase, the government doesn't care, they don't care. They just want you to claim your income and pay your taxes and move on. For the most part, right, there are always exceptions to that role. But for the most part, most people should be claiming their income.
Jamila Souffrant 35:23
Thank you for reiterating that. And hopefully that encourages someone to do that. Is it beneficial for them to have a CPA? I mean, maybe they don't think they make enough to have that or go into like, h&r block, or still have someone to help them with their taxes and pay that person or they can mostly do that on their own online with the free software.
Barbara Sloan 35:43
Yeah, I mean, I think it really depends. Getting in front of a CPA is always a great opportunity to ask questions, you have to have claimed income in order to participate in an IRA in a 401k. And you cannot put more into a retirement account than you have claimed in earned income. So talking to a CPA is great because they will help guide you, especially if you don't know what you've made in the year, they can sort of walk you through how to think about that, that will maybe this is how much you want to play. Maybe this is a metric you can use to figure out how much you want to play.
Jamila Souffrant 36:19
And to like for all the credits or things that you may can qualify for. It's important to just do your own research on making sure you're maximizing the resources you can based on your income level.
Barbara Sloan 36:33
Yeah, because if you're putting money into an IRA, and you can deduct that, you know, you may not know that if you're doing that on TurboTax for yourself, you may not be putting things into the right field. So a CPA is gonna, they're gonna be able to say, oh, no, I can take off six grand, right? If you max out your IRA, so yeah, CPA can often save you more money than they cost you.
Jamila Souffrant 36:52
I'd love to just go back a little bit to your story about now you working in the construction company, and then eventually owning it. How did that happen?
Barbara Sloan 37:01
Yeah, so it's a little bit of a tragic story, our founder, passed away at the end of 2015. And sort of Hugh and I were running the company. And you know, when he passed away, his wife, then stepped in to help run the company. And she and I worked together for a while. And eventually she made me a partner. She and I are now partners in this company. And if you like looking at apartments, high end apartments in New York City, please check us out. It's Manhattan renovations.com, we do really beautiful work.
Jamila Souffrant 37:34
And from the point of view coming in as HR.
Barbara Sloan 37:37
Yeah, I did accounting and finance. I was employee number four. And so we were we were growing, and I was afforded to grow with it. And so but I had a larger background, I had worked for Utility Contractors, and I'd work for a lot of capacities in construction.
Jamila Souffrant 37:52
Right, right. It's just like amazing to just like, it doesn't matter necessarily where you where you come in. Obviously, there are a lot of benefits coming into a smaller company and working in every aspect of the company. So even now, as a co owner, you you know how everything works internally, which I'm sure it's very helpful. But it just goes to show you like no matter what position that you're in, I would say like, it's like steps that create the ladder, right? Like each each part holds it up and makes it important. And you may be at a lower step than you want to be. But eventually, to get to that top step. But like the bottom steps matter, right, you still need them. And so whatever your if you're still working in the service industry, or in a position at a job that you feel like, oh, I want to be the owner, but I'm not there yet. Using all the things you're learning and the skill sets you're obtaining, knowing that it's will eventually help you get you to the position you want.
Barbara Sloan 38:40
Yeah, you're getting highly skilled. And there's there's a lot of opportunity out there. There's a lot of opportunity.
Jamila Souffrant 38:47
Now, Barbara, so tell everyone where they can find out more about your book and more about you.
Barbara Sloan 38:53
Yeah, so if you go to WW dot tips, finance, you can check in with me, you can schedule a one on one coaching, you can sign up for my newsletter, the book is available through a link there or you can just go to Amazon and type in the life changing guide to financial freedom for waitresses, bartenders, servers and all other service industry professionals. I'm sure if you just have a few of those words that will pop up. It's a long book title, but I wanted people to feel included. And you can follow me at Tim to finance on all the socials. I'm most active on Instagram, but I'm really trying to start on tick tock
Jamila Souffrant 39:26
Yeah, well tick tock is another beast. Oh my gosh. But I will link all of that into the episode show notes. And yeah, if you're listening to this as a service worker, we I'd love for you to screenshot this and tag me and Barbara on your social media. Let me know if this inspired you or you learned something. I always like getting that kind of real time feedback when these conversations are useful. So thanks again Barbara.
Barbara Sloan 39:50
Jamila, have a great day.
Don't forget you can get the episode show notes for this episode by going to journey to launch.com or play The description of wherever you're listening to this, and you can still grab your jumpstart guide for free to help you on your journey to financial freedom by going to journey to launch.com/jumpstart.
If you want to support me and the podcast and love the free content and information that you get here, here are four ways that you can support me in the show. One, make sure you're subscribed to the podcast wherever you listen, whether that's Apple podcasts, that purple app on your phone, your Android device, YouTube, Spotify, wherever it is that you happen to listen, just subscribe so you are not missing an episode. And if you're happening to listen to this and Apple podcasts, rate, review and subscribe there. I appreciate and read every single review number to follow me on my social media accounts. I'm at journey to launch on Facebook, Instagram, and Twitter. And I love love love interacting with journeys. They're three support and check out the sponsors of this show. If you hear something that interests you, sponsors are the main ways we keep the podcast lights on here. So show them some love for supporting your girl for and last but not least, share this episode this podcast with a friend or family member or co worker so that we can spread the message of Journey to launch. Alright, that's it until next week, keep on journeying journeyers
Sign up to receive email updates
Enter your name and email address below and I'll send you periodic updates about the podcast.
(This post may include some affiliate links)