What do you do with your money when you start hitting the seven-figure revenue mark?
Heads up: We use affiliate links for our favorite products, softwares and companies. If you click and purchase, we may receive a small commission at no extra cost to you.
So you’re generating 7 figures in revenue, now what? What do you do with all of this money you are bringing in? You’ve probably heard me say this before and you are gong to keep hearing it from me because it’s just the truth. What got you here is not necessarily what is going to get you there.
Making more money is all fun and games right? It sounds great in theory, but have you ever heard the saying “more money more problems”? This holds true on so many levels, which we will explore in this week’s blog!
In this week’s blog we’re talking about:
Strategic investment planning
Tax strategy
Financial strategy
Legal Planning
It’s time to think bigger
Now that you are hitting that next-level mark in your business, you have to start thinking bigger. Especially when you go from the six to seven-figure mark, it is so important that you start thinking BIG and broadening your perspective. Here’s why…
Your mindset as someone who is making six figures is going to be wildly different from someone who is making seven figures. I’m speaking from experience here and I can tell you that once you start hitting that next milestone there’s A LOT more at play. You are going to be paying a lot more in taxes, and you are going to be dealing with way more risk because you are bringing in so much more money now. You also likely have way more team members, way more things going on, way more expenses, and just way more things to manage in general. You can start to see how that “more money more problems” statement holds true here. Even though you might not have to stress about your day-to-day bills, there are now allllll of these other things getting thrown into the mix.
I know this from experience and I know how overwhelming it can be to have thoughts like these racing through your mind:
What do I do now?
How do I save my money?
I’m tired of paying 6 figures in taxes
When you start to get to this point in business it is about being empowered as you step into that next level version of yourself because remember - what got you here is not going to get you there. You need to realize that your mindset is going to drastically change as you start making these large amounts of money and transform from the six-figure version of you to the seven-figure version of you.
As you step into this next-level version of yourself sometimes that means spending extra money to save extra money. I know that sounds counterintuitive, but the people who have experienced this understand what I am talking about. For example, I make over 7 figures annually, but I also making sure that I am working with a financial strategist and a tax strategist. I know that I need these experts to help me make it happen. If you’re hitting that seven-figure mark and you want to keep making seven figures, you want to pay less in taxes, and you want to be strategic with your money, it becomes less about this big shift happening in your business and more about the people that you have behind you. You need the right people with you to help you propel forward through these kinds of big shifts.
What is strategic investment planning?
When you get to these points in business where you really have to start thinking bigger, you have to think of ways to diversify and invest strategically. I’m not just talking about investing in your business here, it’s about investing in your personal life too. Of course, you want to support your business growth, but your business growth has a direct impact on your personal life too, so they both need to be considered when it comes to making strategic investments.
Let’s just say for an easy example that you made a million dollars in profit. If this were the case, you would end up paying TONS of money in taxes, so you have to think about what other ways can you invest that money? There are so many other things that you can do in the background to help lower your tax liability. Strategic investment planning helps you strategically take your money out of the business and use it wisely to support you personally in other ways.
Strategic investment planning is about helping you build long-term wealth and keeping more of your money in your pocket instead of paying it all to Uncle Sam. There are a lot of options you can explore with strategic investment planning like investing in your team or investing in your 401k. The reality of the matter is this…
When you are making a sh*t ton of money you have to learn to flow money out of the business and into your personal life but there are ways that you can do this strategically to lower your tax liability. Strategic Investment Planning is super important, but it is not my zone of genius! Luckily, I do know an incredible woman who I recommend to all of my clients, because she is on a similar mission as me, and she is amazing. If you’re ready to start thinking about strategic investment planning, check out Theory Planning Partners. This is one of those things where you are going to be paying a lot of money for these services, but it will be sooo worth it in the long run, especially if you are making seven figures.
Don’t dismiss tax strategy
Tax strategy is the next piece I want to touch on because I think it is extremely important and is one of the biggest game changers that people tend to dismiss very easily. You need to understand that just because you are going to a tax preparer does NOT mean that your preparer is going to strategize with you. That’s just not how it works! Tax prep and tax strategy are not the same. Your tax preparer is really just there to enter the numbers unless you are paying them for tax strategy, which is another one of those things where you might end up paying a lot of money to save a lot of money.
Tax strategy is about looking at your business and your personal life holistically to see where you could strategically lower your tax liability. Your tax strategist should work with your investment planner and your financial consultant to understand your cash flow and what is going on in the business financially.
I personally work with a tax strategist who I pay yearly and I also pay additionally to file my taxes, but throughout the year my tax strategist will let me know what I am projected to owe and if I am on track. Having this tax strategy piece of my financial puzzle really helps me feel empowered because I have an idea of how much I am going to pay and I can be proactive to prepare to pay that amount in taxes. I am never surprised by a tax bill because I have a tax strategist which means I get to be empowered and proactive.
Where does financial strategy come into play?
We’ve talked about working with a Strategic Investment Planner and a Tax Strategist, and there is one more financial expert that you’ll want to have in your corner and that is a financial strategist. This is a major component of what we do here at Magnetic Bookkeeping. Financial strategy is looking at what you can do to optimize the funds within the business? We are going to look at things like, what can we do to keep your cash flow strong while also maintaining a smart percentage to set aside for your taxes?
Your financial consultant is going to help you reanalyze everything like:
Your offers
Your business as a whole
Your finances as a whole
Your cash flow
Where you are putting everything
What you can afford
We can also be the liaison between your tax strategist and your strategic investment planner which can have a major impact because sometimes these components overlap and bleed into each other. All of these pieces have to fit together. As your financial consultant, we look at things daily, weekly, and monthly inside your business finances so we are the ones closest to home with you.
What’s Next?
When you’re at this seven-figure stage in your business you should seriously be considering succession planning. You have to take things like estate planning, your will, and other legal components so that so the legal side of things is taken care of properly. It’s about things like making sure that your entity is set up correctly to whatever structure is gonna maximize the tax strategy, and typically the legal planner will also work with the tax strategist.
All of the parts work and move together to run a well-oiled machine. You need to have these things in place for the worst-case scenario because if something happens to you, what happens to your business and all of this money you are bringing in? Succession planning outlines exactly what would happen with your business if something happened to you, and this is not to be dismissed if you are reaching that next level in your business.
You have to look at the bigger picture to see how all of these pieces fall into place together and understand that even though you are spending a lot of money on each of these professional services, it is gong to save you lots of money in the long run.
You have to ask yourself, what is it worth to you?
By investing in the right professionals and adopting a proactive mindset, you can navigate the complexities of wealth management with confidence and ease. Remember, what got you here isn’t going to get you there, so always be open to learning and evolving as you reach new heights on your financial journey.
We can handle all things bookkeeping and financial consulting for you, and outside of that, we can refer you to other professionals that we know and trust. If you’re ready to really get your ducks in a row and feel confident as you step into that next-level version of yourself and your business, grab a free consultation with us here.
Related Posts
