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Consulting Check Came In

November 7th, 2019 at 05:07 pm

Received my first consulting gig payment today, $800. I’m so excited. My mind is all over the place on what I should do, save, debt, retirement. I realize that I really need to stay focus.

I decided to deposit the funds into my savings account and not touch it. One, my legal situation with my brother hasn’t been finalized as of yet, and the goal was to beef back up the savings to at least 3 months of expenses before I tackled the debt, gazelle intense. So the key is to focus.

I’ll stick with bumping the savings, plus I’m not sure how consulting will impact my taxes.

I was playing around with the MSMoney Software and I can track so many things regarding the consulting gig. I can track projects, mileage, invoice and document payments. I was worried about how I was going to account for these things. Feeling great about this.

Other news, things were crazy at the office, I ended up missing lunch and buying a $3 slice of pizza πŸ• on the run πŸ™„πŸ€¦πŸ½β€β™€οΈ

I sat in on Vanguard’s webinar EFT vs mutual funds, I think I’m more confused than I was prior. But I’m determined to learn more about investing

4 Responses to “Consulting Check Came In”

  1. Lots of Ideas Says:

    Amber Are you trying to compare Exchange Traded Funds (ETF) with Mutual Funds?

    Both are funds made up of a group of stocks chosen by fund managers. Usually there is an underlying philosophy to each fund - like tech stocks, or a specific retirement date where the risky ness of the shares go down as you get closer to retirement.

    You buy mutual funds from the company who manages the funds - think Fidelity, Vanguard etc.

    Exchange traded funds trade publicly. You can buy them though any broker. They are bought and sold like individual stocks but instead of shares of say, Microsoft, you buy or sell shares of the fund.

    The value of a share in a mutual fund is based on the close of day or average selling price of the shares in the fund. (varies by fund)

    The value of a share of an exchange traded fund is based on what the price was that people bought/sold that fund that day. Can be closing or end of day price.

    People like mutual funds because the hope is that the fund manager is watching the market so you can trust them to buy/sell the right mix of underlying stock to meet the funds goal so you make money.

    People like exchange traded funds because they provide more diversity than individual stocks but with the freedom to buy/sell like stock. There are often lower minimums to buy in to ETFs than mutual funds.

    Since you are new to investing, I suggest you start with a fund from someplace like Fidelity or Vanguard tied to your retirement date.
    You might also like to β€˜play’ by β€˜picking’ a stock or ETF that you think is good, write down the price, and watch for a few months to see what happens. This can give you confidence nior a learning experience with no risk.

  2. Lucky Robin Says:

    You may need to consult a tax accountant on this. You are in business for yourself with this and I know that means you have to pay a lot in taxes. If I remember right you have to pay both shares of taxes, employer and employee. I would save at least half until you've gotten your tax situation figured out. I think it will be closer to a third, but better safe than sorry.

  3. Amber Says:

    Thanks everyone I appreciate it.
    LR I’m definitely reaching out to an accountant regarding the business

  4. wallstreettreasures Says:

    Congratulations on your consulting gig! It's neat when your hard work pays off, and your clients appreciate it! Talking to an accountant is the prudent thing to do in this situation. As previously stated, sole proprietors are responsible for the Self-Employment tax, which is 15.3%. When you work for yourself, you are required to pay Social Security and Medicare Taxes as both the Employer and Employee, which is 7.65% on each side. You are also responsible for Federal and State Income Taxes. As you build your business, things get more complicated. If you owe more than $1,000 in taxes, the Federal and State will expect you to pay estimated quarterly taxes. A good accountant will not be cheap, but they can get this work done relatively quickly, and you can sleep at night. They can also help you with tax planning going forward. The savings from tax planning can essentially pay for your accounting services.

    Congratulations again on the gig, the accounting stuff can be a pain, but it's a sign that things are moving forward, and that there is a bright future ahead!





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