Each week, we ask a personal finance or business expert for their money pro tips. This week we talked to Amanda Abella, business coach and author of "Make Money Your Honey."
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Last thing you resisted buying:
I’m trying to plan a trip to Greece, and I found a tour that looked pretty good. But I’m still looking for a better option that has everything I want to do.
What’s your current money goal?
Ten million in net worth. That’s my shoot-for-the-moon goal.
How you’re working toward it:
I have a business, and I’m learning how to scale that. I’m bringing in people so I don’t have to always be involved. And I’m bringing in passive income. So I get a paycheck from my company, and I save anywhere from 30% to 50% of my salary in my Roth individual retirement account. Can’t just let it sit in the bank collecting dust. The idea is the company and my investments keep growing at the same time.
A money regret:
I was extremely risk averse in the beginning. Coming from the traditional personal finance space, there was a lot of “cut out the latte, go find a house, save 40% of your income.” It took me a minute to figure that in order for me to do those things, I needed to make a lot of money. If you want to save 40% of your income in South Florida, where I live, you have to make a lot of money. And even when you make a lot of money, you need to know what to do with it. You need to build the discipline. I feel like maybe I spent too many years in the management phase and not in the earning phase. If I got the memo sooner, I’d be further along.
Best financial advice you’ve ever gotten:
Two things from the same person: Most people spend 95% of their time managing money and 5% on your earnings. You need to flip that. And if you want to comfortably save 40% of your income, shoot for a minimum of $400,000 a year in income. When I heard that, I was like, “This all makes sense for the first time ever.”
Worst financial advice you ever got:
Avoid risk. It’s impossible. And credit cards are evil.
What would you do with a $1 million windfall?
I’d probably invest it. And I’d probably blow some of it traveling. And I’d write a check to Kidz Count, a nonprofit in Florida that focuses on financial literacy.
Hardest part of starting a business:
Your mindset. I have this joke that the rules in your personal finances don’t apply in business. They’ll take you down. You can’t conserve money to have a business and you can’t avoid risk. You have to do both all the time.
Most rewarding part of starting a business:
At first, it was completely selfish. I loved the flexibility. I was making money. As it gets bigger, you’re not trying to survive anymore, and then it becomes about bigger things. It becomes more about, like, I gave someone else a salaried job. That’s so cool. My financial team recently told me we have to start a 401(k). It’s great to be able to do that for yourself and for someone else.
And the wins you hear from your clients. The money is great and it’s a mile marker. That’s important and feels good. But the stuff that gives you energy is from the clients.
Image: Nastia Kobzarenko