Episode 473: How Service Workers Can Achieve Financial Freedom & Increase Their Financial Health with Barbara Sloan

Barbara Sloane 0:01

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 side of benefits and how that supported the financial health of an employee. And I was like, Oh, I just remember thinking like, Oh, my God. Why didn't anybody tell me that? Why did I not know any of these things for so long and I was able to make so many mistakes?

Jamila Souffrant 0:55

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 to listen to, stages to go through, to reach financial freedom, resources and so much more. You can go to journey to launch.com/jumpstart

Jamila Souffrant 0:28

Welcome to the journey. To launch podcast with your host Jamila Souffrant as a money expert who walks her talk, she helps brave journeyers like you get out of debt, save, invest and build real wealth. Join her on the journey to launch to financial freedom in 54321,

Jamila Souffrant 1:30

to get your guide right now. Okay, let's hop into the episode. Hey, journeyers, welcome to the journey to launch podcast Today's guest is Barbara Sloan. She's the author of the book tipped the life changing guide to financial freedom for waitresses, bartenders, strippers and all other service industry professionals. She was a homeless teen who danced 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 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 in. So welcome to the podcast.

Barbara Sloane 2:27

Barbara, thank you, Jamila, I'm so excited to be here. Yes, I

Jamila Souffrant 2:30

was saying that I get, sometimes, some pitches. And what stood out for me with your topic was I thought it was so relevant, 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 are barriers to how to achieve freedom. And I was like, 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. Yeah, so

Barbara Sloane 3:02

service industry professionals to me, and I'm sure this answer changes with whoever you're speaking to, includes 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 tits, hairstylists. 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 401, K of understanding what their health care 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 were like, oh, yeah, set aside 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 shouldn't 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 age into 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 tips 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 Social 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

Jamila Souffrant 6:00

out, 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 did you say? It was $2.13 an hour federally. So they're depending on the tips from patrons, from customers, right? Mostly, yeah. So you're,

Barbara Sloane 6:38

you are living, there's over 4 million people in the United States who are living solely or partial, solely or partially on a tip based income, right? So those are people who depend mostly on their tips that $2.13 that gets eaten by any taxes for any horse claiming or any optional claiming that you make of your tips, you're not getting a paycheck in most situations.

Jamila Souffrant 6:59

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 high scale, more money they have people working in those services, potentially will get tipped 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, but if you're not working in places that where the average cost of the meal is 50, $60 where you may get tip 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 scale, upscale and maybe they're still not getting tipped 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? As a

Barbara Sloane 8:00

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 who made $40,000 a year and retired early and ended up with millions of dollars in his bank account. 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, you know, downsizing your 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 you 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 made way more money serving family style at a restaurant than a lot of club workers that I know who you know were breaking in piles of singles. So it's not necessary, necessarily true that you make more at a higher end establishment 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 establishment 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. 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, at place, in place for yourself, you have loads of confidence. 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, right?

Jamila Souffrant 10:40

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 is working full time in the service industry, the majority of their money is could 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. For people, it's like, well, how do I budget without knowing how much I'll actually make? So what do you say when it's like a person like that who has an inconsistent income can't really determine, or feels like they can't determine what they can make every two weeks and how to get

Barbara Sloane 11:24

started there. 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 on 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 talk 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 weeks. Those are the two big, bigger things that I tell people to try to implement when they're working on a fluctuating income.

Jamila Souffrant 12:00

So for can you give an example what that looks like in a budget? Yeah, let's say

Barbara Sloane 12:04

that you have an electric bill, right? We'll, 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 in 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 the 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 at 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, right?

Jamila Souffrant 13:29

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 as an outsider looking in. You know, for most people, especially if they're doing it full time, I would have just assume it's that's not where they want to necessarily be, unless they're looking to work themselves up. I mean, I'm thinking about a restaurant, maybe in terms of, like, being the manager of the restaurant on day, 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 Sloane 14:01

I think you're wrong. Really. Okay, so I belong to a bunch of buyer 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 RE 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, he'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 be a server, and I'll jump in. And 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 network 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 getting 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 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 can achieve financial freedom and stay in the service industry. And I just had to set these 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 15:33

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, and 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 they 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 Sloane 16:12

Definitely. And I have no skin in the game. There are people coaching clients that I have talked into the industry and people that I have talked 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, seven vacation days, five PTOs. 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 are operating on working every single week without paid time off. You know, so it. I think if these 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 that you could take days off when you weren't feeling good, you weren't feeling it, I think you'd see a lot more joyful people in the industry.

Jamila Souffrant 17:16

Yeah, and it reminds me of a past guest this was so early on. I'll try to link to her episode, Ashley, 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 would be 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 you to this level?

Barbara Sloane 17:57

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 is my parents had a windfall of $6,000 as an inheritance, and that afforded them the opportunity to buy a home when I was young that was right on the edge of Detroit. So home ownership 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 maxed them out to renovate the house myself and update the house

Jamila Souffrant 18:36

myself at 18 years old. How did you do that at 18? So this was 2003

Barbara Sloane 18:43

and they were giving away loans at that point. Right there was, 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 poor 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 report to my credit score. I have medical debt from other countries report to 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 dirt in the day and dirty 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 had like, $700 in our pocket, and I got two jobs. The first job was bartending at Coyote Ugly, and so I'm singing and dancing down the bar. And the second job I got was working on. Wall Street for an unregulated firm. So they were part trading floor and part independent sales organization, which essentially means loan sharking, right? So it was a huge education for me on the markets, on financial services, on 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 own. 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.

Jamila Souffrant 21:07

Hey, journeyers, if you are loving this podcast, then you will love my book, Your journey to financial freedom, a step by step guide to achieving wealth and happiness. I wrote this book for you. This book is for you if you want a clear and enjoyable path to having more money options and a rich life. This book is for you if you hate your commute and the fact that you need to seek approval or permission from a boss. I hated that when I worked. This book is for you if you weren't born into wealth, you didn't marry rich or won the lottery, but you still want freedom. This book is for you. If you're at a crossroads, a major decision or event is imminent, maybe a career change, marriage, starting a family, pressures are reaching a tipping point, and the discomfort and the desire for more can no longer be ignored. And this book is for you. If you find yourself zoned out at meetings, looking out the window or daydreaming about the life you truly want. So go pick up your journey to financial freedom.com. So I can show you how to map out how to get from where you are today to where you ultimately want to be and enjoy the journey while you're on the path, head over to your journey to financial freedom.com. To see where you can pick the book up. It's available on Amazon, bookshop.org, Barnes and Noble, your local bookstore everywhere go to your journey to financial freedom.com. To get the book now. 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't wait to get to that part of the story, but go back a little bit. So what, what were you doing in construction before that job, in order to have the qualifications or them to have the confidence, to give you all those roles? Yeah, I

Barbara Sloane 22:56

have no credentials. I didn't graduate from college. I don't have any certifications. I'm not a financial CPA. I'm not, you know, a stock broker, none of those things. But how I got into construction was when I bought that house at I think I had 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. I was like, Oh, I work for a GC. I'll know how to renovate this house. And I spent a lot of time at the library looking up how to do things before HGTV. 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 sideshow 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 Gen. And even if you want to do this in the service industry, I think it's a great way 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 with

Jamila Souffrant 24:48

this right? So now you move into the construction company. Are you still working on the side? Well, I'm assuming Yes. What your service industry jobs? Yeah, I

Barbara Sloane 24:58

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 spun off to like 1000 other books and blog posts. And I'm sure you know how it goes. Yeah, once you 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 should be providing it 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 should be a whole lot more, whole lot more

Jamila Souffrant 25:59

people in this Yeah, and I mean, talk about just these skill sets working in the service industry like that means you're serving people whatever that is, right? There's a dish, a drink, a fantasy, right? It's pleasure 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, and how they translate so well to being able to navigate social relationships or negotiate and and be likable, right? Like that is us. 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 Sloane 26:40

Yeah. And I also think that the money side of thing, and when you're a server or a 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, as an 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 store, 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, right?

Jamila Souffrant 27:51

And just like the confidence 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, on to 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 Sloane 28:35

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 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. Where 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. Funds in a normal course of service, that 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 game changer. So I think people in the industry are really comfortable talking about money, like you said, there's that confidence. You're comfortable confident that you can make income, you're confident in your skill sets, you're confident in what you're doing. The conversation stops there. Conversation stops at the income side, which is super, super sexy and super fun, and it doesn't carry over into the money management side and to the execution of setting up those benefits systems and investments for yourself, right?

Jamila Souffrant 30:42

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?

Barbara Sloane 30:51

Yeah, so it really depends on how your employment is set up, whether you are a w2 employee, whether your employment employer is classifying you as a 1099, if you're a w2 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, right?

Jamila Souffrant 31:15

And, I mean, I advocate like so for family members who who are still maybe earning minimum wage or not, have a 401, K 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, it's that misconception that if it's not a lot of money, if it's not 1000s of dollars, and what's then, why do it? And it's just like, you could start small and build your way up. I had

Barbara Sloane 31:47

a client who had two jobs. So she had a sort of nine to 5s part time job for health insurance and for benefits, and also worked service industry job. 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 I don't want to max out this 401, k, 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 account, the separate IRA. So it might not make sense math wise, right? It's not the most math sense, but do

Jamila Souffrant 32:26

it works for you, 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 know, 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 Sloane 33:03

So everyone should be claiming some income. Everyone should at 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 fall on the campus, like I don't really know how much I make, 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 claiming, and that could be even more. They could be claiming more than what you actually even earn, which is super messed up, especially when you consider tip outs, whether it's like tipping out of a bar back or your house fees, or however you're having to tip out. So when you're claiming 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 made. Paying your taxes and claiming your income is very important for those reasons for qualifying for a 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 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 rule, but for the most part, most people should be claiming their income.

Jamila Souffrant 34:52

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 and 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 Sloane 35:12

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 401, K, and you cannot put more into a retirement account than you have claimed and 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 so well, maybe this is how much you want to claim. Maybe this is a metric you can use to figure out how much you want to claim

Jamila Souffrant 35:48

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. Yeah, because if

Barbara Sloane 36:02

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 going to, they're going to be able to say, oh, no, I can take off six grand, right, if you maxed out your IRA. So yeah, CPA can often save you more money than they cost you.

Jamila Souffrant 36:21

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

Barbara Sloane 36:28

that happen? Yeah, so it's a little bit of a tragic story. Our founder passed away at the end of 2015 and sort of he 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 37:03

And from the point of you coming in as HR,

Barbara Sloane 37:06

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 that I had a larger background. I had worked for Utility Contractors, and I'd work for a lot of capacities in construction,

Jamila Souffrant 37:21

right, right? It's just like, amazing too. 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 co owner, you you know how everything works internally, which I'm sure is 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, like the bottom steps matter, right? You still need them. And so whatever you're 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 to the you to the

Barbara Sloane 38:08

position you want. Yeah, you're getting highly skilled. And there's, there's a lot of opportunity out there. There's a lot of opportunity now.

Jamila Souffrant 38:17

Barbara, so tell everyone where they can find out more about your book and more about you.

Barbara Sloane 38:22

Yeah. So if you go to www tip finance, you can check in with me, you can schedule 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 tip, the life changing guide to financial freedom for waitresses, bartenders, strippers and all other service industry professionals. I'm sure you just have a few of those words that'll pop up. That'll pop up. It's a long book title, but I wanted people to feel included, and you can follow me at tipped finance on all the socials. I'm most active on Instagram, but I'm really trying to start on Tiktok.

Jamila Souffrant 38:55

Yeah, well, Tiktok 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 Sloane 39:18

Barbara Jamila, have a great day.

Jamila Souffrant 39:21

Don't forget, you can get the episode show notes for this episode by going to journey to launch.com or click 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

Jamila Souffrant 39:41

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 in Apple podcasts, rate review and subscribe there. I appreciate and read every single review. Number two, 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 journeyers. There 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. Four, 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. All right, that's it until next week. Keep on journeying. Journeyers. You.

Transcribed by https://otter.ai