Is that time again. It's time for the b a q a, the b a q a, the b a q a, the b a q a. Okay, it's time for brown ambition question and answers. You have questions, we have answers. Ish If you're not your mama, We're not your financial advisor, we're not your doctor, your therapist. We just two brown girls on the Internet doing the best we can. Okay.
I don't want to be served with a lawsuit in the middle of Wegmans, y'all. Nah no, no, no, no, no no. These are answers with the side of t just coming from you know, your financial besties who have ideas but not all of your information. So take it with a giant grain of salt. But we got some juicy business questions today, potentially a baby pyramid scheme. We have to save some from someone from So let's do it. Where should we start?
All right?
This from a listener who wants to remain anonymous, And they say, I took out a five thousand dollars loan to help with startup costs of a new business venture. The payments are one hundred dollars a month for five or six years. I'm expecting to profit two hundred to three hundred dollars a month initially from my business. My question is should I use those profits to pay off the loan or should I use my nine to five income to pay off the loan and use the profits
to continue to grow slash expand this new business. Thanks in advance for exclamation marks.
Well Annie aka anonymous, Honestly, me and Andy were like potato patato. I mean, well, I guess on the if we're being super techy technical right technical Tuesday, I would say, because you want to make sure ideally that the business is looping in the business. But everyone knows in the beginning. You know that it's you personally and your job likely or whatever side husele you have that is funding the business. But if your business is able to pay off the
loan that you took, certainly you can do so. But you paying it off with your nine to five it doesn't really I just say all that to say it doesn't. I want to say it doesn't matter because you personally took off the loan out the loan, not the business, so you owe it.
Yeah.
But if it was me, honestly, I probably would just say I took out the loan, I'll pay it back. I'll use my money to invest back in my business. Because I'm working, I don't necessarily need the business funds just yet, so instead I'll just reinvest. That's likely what I would do. But if you don't do that, it's not wrong technically, I don't think. What do you think, Mandra, Yeah, I mean I don't.
I'm not mad at the idea of thinking of your business and personal expenses differently. Yes, I wish, even in my first year of business, and I know this. I know that you it's better off. You're better off just keeping everything simple. But sometimes I would run out of checks from my personal account and then just like, let me get these MANDI money checks real quick. I saw so maybe the landscaper got a check from my business last week.
Maybe he did.
And it's fine. But I like the idea of putting it in two different buckets because you know, and it also it's like what we say to name your savings accounts, almost like give that money a job. And if you tell yourself, oh, this is my business profit, you're more likely to probably use it for those business expenses and maybe keep it separate and not dip into it when you know you run out of checks in your landscaper is like knock, knock my money.
In the beginning of businesses, it's really messy. You try it to be. It's like high school. You know you're gonna be messy girls high school, but try not to be as messy.
Trying, but I keep doing. It's not about me, it's about.
Yeah, so like yeah, so, like, like Bettie said, if you could keep it separating clean, that's ideal. One thing I will say. I was just telling what this one to my one of my mentees, and I was telling her because her finances she's like year two and a
half and her taxes were just a mess. And I had told her in the very beginning, look into maybe having a bookkeeper, because you know, although she has a financial background, she's got her degree in finance, still running, you know, doing your business finance on top of everything else. So I'm like a bookkeeper girl, you know, twenty thirty
bucks an hour. You want them to create a profit and law statement every month because that's what you'll give to your accountant so you're not scrambling at the end of the year. Of course, you didn't listen. We never listened, girl. I didn't do my taxes for the first two years of having a business. My accountant had to run me down in Shopwright, which is a major literal. Carlos man me down shop right, Carlo, Yes, I saw him in Shopwright, Mandy. I tried to make a youth joke. He said, no,
you come here now. Just imagine it's smaller.
You know, it was baby Budgetissa. She was a shopwright, not Whole.
Foods for those who don't know. Shop Rights, like on the East Coast, is very it's very low cost supermarket. And so Carlos is our brown and mission accountant too. He's super nice and dope.
Like yeah.
He was like, Tiffany, I have been called me what he had been calling a text me And I was like la la la la la la la la la la. So yeah, so just imagine me in Shopwright with the big old Shopwright cart, trying to make a quick turn down the aisle, and Carlos was like, Tiffany, I was like, if you know Carlos, He's like, I don't know. I won't even say he's short. Sorry Carlos, but he made me like might head a little shorter? So he was like timpany, but he has like the biggest, brightest smile.
He is so friendly, and he was like, what are you doing. I was like no, no, no. He's like, do you want to go to jail? I was like I don't, so he said honestly, he was so nice.
He was like, I want to go to jail.
He was like, what are you afraid of? I said, I'm afraid of how much I owe. He said how much do you think you o? And I said thirty thousand dollars and he looked at me like did you even make thirty thousand? I don't know why I had that. I don't know why I had that in my mind.
He said, thirty gave me like fifteen k first, girl, I just had to.
My mind it was thirty. I don't know why. And then he was like, no, you o eight. I was like, oh, he said, but you would have old. I think it was like near four. I was like, well what, I oh? Eight? He said, that's what happens when you don't find your taxes in time and you don't pay for two years. And I was like, okay, okay, that's so from then on, you know, I said, no, more of that. So Manny and I just sharing these horror stories just so you know.
And even so you are going to be a little messy you're a new business owner, try to be as little messy as possible, especially with your finances. Get yourself an accountant, get yourself a bookkeeper who can do those profit and law statements so you don't scramble. And remember that your the money part of your business is literally the life's blood, so it needs to flow in order for your business to maintain. I don't care how successful
you are. If the financial part, the taxes, the bookkeeping, all that stuff is a mess, then your business will eventually catch up and be a mess too.
Yeah. I need Carlos to come track me down sometimes because I switched to an escortor at the beginning of this year, okay, and we did all that, and then like the year just went by and I was still doing things Like you know, when I was just at a regular LLC, I would just pay myself, like write myself a check basically, and I just kept doing that.
Last week, I had like the most moments at three am when I was like ugh, email Carlos and his wife Tian, who does my bookkeeping, and I was like, you, guys, I don't know what I'm doing wrong, but I feel like someone needs.
To look at me.
Can someone come look at me? Look at I just wanted to be babysat. And they're like and he's like, no, no, no, no, Now you're an escorp. You need to be a W two And I'm like, yeah, I know, but shouldn't you be doing these things even if you have an accountant, like they don't always like they're busy. It's taxis and
all that kind of stuff. So even me, I'm like, okay, someone needs to I don't know what something's off here, but at least me reaching out and hopefully i'll I'll start paying myself with it like an actual W two employe.
I mean you can take owner's draws, you know, like a.
That's what I've been doing. I just tell myself that. I'm like yeah, but it was like, what's this? It has to look like it? What do you mean?
Well, meaning like you can't just like make a transfer from one account to another account. It has to like you know, be sent to you as like, oh, this is an owner's draw like you know, you get your cause I get my regular I'm an escort for both of my main companies as well. One of them, though
I'm considering going to a sea corp. So for those of you who are like one of these letters, so an LLC from what I remember, is like the way the state looks at you as a relation to the way you're incorporating, right, and so s corpse are also LLC's. And what makes LLC's special is that it's a pass through entity. That just means that when you pay taxes, the business passes through to you and the tax is
going your personal tax return. Right, So when you are a sole proprietor LLC or say like a partnership LLC, you are still considered like self employed. When you become an es corp. That means Mandy officially is a is an employee of her business and she no longer has to pay self employment tax. That's the benefit from adding
es corp to your LLC. It's like, ooh, but that typically you don't You shouldn't do that probably around maybe like one hundred thousand a year mark you though, because then it's like, okay, now my self employment tax is going to be too expensive if you're making under one hundred thousand dollars a year. Self employment tax you know, in relation to the other taxes you would pay as an es corp, is probably manageable. Once you start to make six figures are more considering. You want to talk
to your attorney, talk to your accountant. They'll help guide you and they'll do they'll see taxes as a sole proprietor LLC taxes as a as an es corp. And then you know, they'll let you know where you know you'll save. And so you move over to the LLC side. You are now an employee. So Mandy is no longer self employed. She has to pay herself a salary.
You know it's the worst.
Yea, Now that's what it starts to get out to pay payroll taxes though, because that's where I'm like, damn, I'm behind three months on payroll taxes.
Now, yes, I've never ahead.
I'm telling you, like, honestly, I've made so many mistakes. I'm not even because first of all, Carlo said it, I think it's time to become a sea corp. Now, when you're a sea corp, it is not an LLC. It does not pass through onto your personal taxes. And when I say passed through on your personal taxes, I mean this that your company makes one hundred thousand dollars, you spend fifty thousand, and there's fifty thousand left over. Maybe of the fifty you give yourself twenty five for payment,
and then you say, I'm going to save twenty five. Oooh, the the government does not care that saved twenty five. It's money that was earned and not spent on the business, so they look at it as your earned income. So you're going to have to pay taxes on the twenty five you received and the twenty five you do not receive. I did not know that. In the beginning, I was like,
why am I? I felt broke. I was paying so much in taxes, not realizing that my company should be chipping in because some of that money was still left over in the company for savings, and so that's just the whole thing. But then I switched to I thought a sea corp. We had felt out the paperwork, didn't realize it didn't go through. A sea corp is different in that you are now an employee, just like anes corp, but except for it's not a pass through the company.
Will pay its own taxes. It doesn't pass on to your personal like for example, Jeff Bezos. Imagine him paying, you know, taxes on the trillion dollars. You know he paid taxes in a copy now, but let's pretend like he paid so Sea Corps. As you start to make more, you know, maybe like seven figures or maybe multiple six figures than a Sea corp might make more sense. I thought I was a seed court Mandy, and we were filing taxes for like two or three telling me that
you were something like that. I was not a Sea corp.
Yo.
When I tell you the amount of undoing, the amount of undoing, I was like, say what now? So you say what now? I was like, so, I guess we applied, but you know it didn't go through or whatever happened. And I saw I'm filing taxes incorrectly when I tell you the amount of money because Sea Corps technically lowered my tax my tax burden. So they're like, oh, sis,
you wasn't supposed to get them breaks. Not only do you owe us, you owe us money on what you owed as so I know, I'm just saying all this to say, like, child, get your finances in order get your finances in order when it comes to your business. So good luck. Sorry, I hope we didn't scare you.
It's like, it's just a five thousand dollars loan dollars a month. That's a pretty good that's all. That's a nice you know, a monthly payment there. Okay, well, let's that was that. That went in the directions that I'm so glad it went in. But let's take a quick break and we'll come back with your next question for the BAQA. All right, we are back and let's get into our second question. This one's interesting from Jessica. Jessica says, I met a wonderful girl in a retail store one day.
She was so nice and invited my boyfriend and I for coffee. She was really well put together and was excited to leave her corporate job and pursue her passion. When we got to coffee with her, she started to mention a mentorship and being part of a mentorship opportunity from wealthy people. In short, I'm pretty sure it was a pyramid setup. Do you all have a point of
view on these? I don't think it's for me, but I would love to know your insights since some people seem to be successful with it, that story took a turn. I met a wonderful girl. I was like, oh, it's a love story. Oh no, it's a horror story.
I was thinking. I was like and then it was like, wait, is this a swinger story? What's happening? Because it's like me and my boyfriend, I'm like, I'm confused. Yeah, what are these?
Is there a wealthy people offering no bullship as a pyramids game? I haven't heard of this.
I well I've heard of so right now. What's really big that I've seen is that there are a lot of masterminds that that's the new thing and so, but not in the not with a pyramid structure. So not like you know, you bring somebody in and so the pyramid structure. Maybe you want to explain like what like you know, like one of these like pyramid structure looks like and then.
Blue la row And who's the people that sell the knives? I don't know. I just know I have to save several Yeah, So basically it's it's it's think of a pyramid. You have the people at the very tippy top who are actually making money, and then they recruit other people to come in and start selling the product or getting members into their into their business, and then those members bring in other recruits, and then those recruits bring in
more recruits. And the lower down the pyramid that you get, the harder it is to actually make money from it. And yeah, they it's also called the multi level marketing
yes MLMs. MLMs, and I feel like there's a very agressive public relations campaign to try to save face for MLMs, and people are like really, you know, they get kind of upset whenever you talk about them and dog on them, but they target working home sorry women so often, especially women who work from home or who are stay at home mothers or parents, like and because of that population, because they're coming for us, you know, I just feel more like we have to really be careful and be
aware of what it is. So a mastermind.
So we'll also say this real quick about MLM. The thing about MLM, the marker of it being unsavory is that there's less a push for you to actually sell the product or service and more push for you to recruit. So it's like, wait, you know, like you have like Lula Row, like literally it wasn't so much that the people who were selling Luloo were actually making money selling the leggings. It was if I can find a Mandy underneath me, then she has a mandatory amouth that she
has to buy. So it literally wasn't like Mandy's selling us, She's buying it. And so I get a percentage of anything that Mandy has bought or sold. I get a percentage of that. And so Mandy's like, well, dang, you know, I'm running out of money. Let me sign up my sister. So then her sister has to buy a certain amount. So it was less about like, oh, selling this great
product or service and more about signing people up. So, just so we're clear, that's why pyramid schemes and those MLMs are so detrimental, because the underlying business is not good business. You know, it's just about recruiting people versus selling good things. But masterminds typically are different.
You were almost going to join the mastermind or did you join the mastermind? You're gonna go to some kind of conference. I feel like that, zions you too.
So yes, my business coach environment, it was a lot of money. I want to say it was like ten thousand dollars. You know, for that week or whatever. Yeah, it's a lot. So but the thing about it is is that there's no recruiting, Like it's not like hey, Tippy, you bring somebody in, you get money. But it doesn't mean that there that their masterminds can't be scams to anything can be a scam. So a mastermind, at its core, when it's good, is a group of people who are
working toward like whatever success. You know, we could all be from different backgrounds, and then and you are supposed to share the knowledge that you know and like almost into a pot, and then people can kind of pull from that pot like, oh, I know marketing, Well that's great because I know copywriting. Well that's great because I know,
and you're supposed to you're supposed to share that. And then typically there's someone maybe who is for some masterminds, it's all peers, and for some masterminds there's like one person that might be like the mentor of the mastermind. And so like, I'm not opposed to masterminds. The only thing now they've become so expensive and you wonder, like
what's the return. I certainly have friends who are in some and they say that you know, it's been great, Like it's all these wealthy people teaching other wealthy people how to be wealthy. I've been to one, like I'm went to Vegas. I remember, I can't remember how much it was, but it was like for people who were
seven figures trying to be eight figures. And certainly I learned a lot, but there was a lot of upselling at that mastermind meaning at the end saying you learned all of this, you can learn even more for a hundred thousand dollars. Literally it was a twenty thousand dollars upsot. I was like, bruh, I flew a economy here, so yeah, but would you ever don more?
I don't know. I did invite myself to an informal like an informal group of fellow online entrepreneurs and just you know who get together on zoom every once in a while. But it's not like a Paige. It's just like a networking group because I'm really trying to want I want to like find support and find like among my peers and all that anyway, so that to me has a value. But I'm not necessarily I don't know if I'm I don't know. I'm always open to input.
And I have worked with a business coach and you know, and I'm I'm definitely open to that, but I don't know, Like I did get in. I did see an ad for like a two day sort of one of those is that what you were saying, like you're at seven figures, you want to be eight or six figures or seven or something like that. It was two days and it was like fifteen thousand dollars and nah, no, I mean, I don't think I'm able to invest that much from
what I'm making as a business. Like right now, I'm kind of looking at the math and I'm like, oh, that's a couple months worth of income, and nah, daycare is expensive. So yeah, math at math and I at a certain point, of course, you want to invest in your business, and as a business owner, you know, depending on how you structure it, those business expenses can be deducted and like it actually helps you to reduce your
text liability. But I would want to I would say to this person, you didn't mention the name of the program, but I wouldn't sign up to anything. Right then, I will google the hell out of it and look for reviews and look for testimonials and be really.
Clear of the t online.
Yeah, I'm just surprised. What an old fashioned way to recruit just meet someone in a store. I feel like I got my don't talk to me face on like stone cold, do not approach me like.
So, you know, it seems odd because it's like, now here's the thing, Like it's it's one thing for like, Okay, you are in this business space and someone says, hey, Mandy, I know you started a business and you know this is thing. This thing is working for me. But for me to just be walking in the store, you don't know anything about me. You know what what value add
are you adding? You know what I mean? So to me, this rings like scammy Versus I might tell Mandy, Hey, Mandy, you know last week last year, I spent a weekend in Cobble learning from these people. I think it's a really good idea. You should you should come. You know that's different, like you know, so then Mandy might say, okay, like I don't get paid if Mandy comes, and it might be expensive, but I'm like, you know, I really got to learn all these things and got to connect
with different people. So in general, masterminds are you know, not bad ideas, it's just as long as you're clear on what your desired outcome is. It's in alignment with where you actually want to go. And like, you know, I would definitely get some like referrals, like I said, because all my friends are so many masterminds. Somebody these masterminds Mandy fifty thousand dollars for the year, and I'm just like, are they selling gold up in there? It just and I've been in a couple and I'm not
gonna lie. We've gotten on the phone and I'm like, so I've only ever joined free one. I mean, and maybe that's why they haven't been so great. But I've been on a couple and after a couple of calls, I'm like, oh my god, this is not useful, this is not helpful. So I've left. So maybe because they're free so they weren't as focused, but pyramid schemes knew mastermind.
Maybe Yeah, I'm suspicious of like any business that's kind of built on convincing people they can't do something on their own that they need, you know, guidance or they need this particular method or strategy. And as a career coach, myself I think about that often because I want my value to always be that I'm someone who can help you see through blind spots and encourage and make you feel more capable of doing it. And I love the term coach. I've really I think in the past I
was always like coach and what is that? But I mean, what better way to describe what it is that you know I do through my work and actually helping people be the best versions of themselves. But I would tell someone immediately if I felt like I'm not probably the right person for you right now or the right you know what I mean. And even for my group coaching program, I know one of them, one of the makers wanted to know, is there a referral co a referral fee
if we refer people to makers? And I was like, no, I don't want people to feel like they need to refer people and they're going to make money off I want you to refer people because you got so much out of it, you know what I mean, And that word of mouth is powerful.
With that, I feel like, you know, and maybe as you grow you might have like a you know, someone might actually bring in genuinely their sister or whatever, and you I mean you you might reconsider because I mean I don't have any referral programs either, but for example, the Literature Academy, it's something I'm looking into because a lot of people are like, oh my gosh, this is what I'm wanting. So you know, it's been six years, so I'm open to that. But a girl, if you
need a coach, you got two coaches right here. You need a career coach, where can they? Where can she find you?
Mandy oh mandymoney dot com?
Right? And then if you want a mentor, a mentor in business, entrepreneurship, personal and professional development, and it's just my mentor Tiffany dot com. So sis, And meanwhile, it's ten months for me. So first of all, let me let me laugh. Like, so, I sent real clear guidelines about like what I will and will not do in my mentor tivity space, and a woman emailed me was like, I'm really disappointed because I expected that was gonna have
a one on one with you. I'm like, well, one, it's clear in what like the video and what I wrote, like when you sign up, But she was like, maybe I'm being unrealistic. Assis, it's ten thousand a month Yo, that's not even babysitting ten whole thouars a month. And you thought that we were going to get on, you know. And I really try to be clear. Every time I teach a lesson, I'm like, hey, let's just re establish boundaries.
This is what it's gonna look like. Mom says, you thought it's gonna get on a call, and I was gonna be like, ooh child. Anyway. Now, don't get me wrong. I do mentoring for like the ten people who are mentor and it's free. We just talk, you know. But I was just like, that's not what this is. This is really digital group mentoring. I'm trying to make it as accessible as possible. But I just thought that was
like a month. Says I would hate to be baby saying, yo, Chid, because you must be like, here's your two panties, see you next next week.
Girl. I mean, my cousin Anna makes twenty five dollars an hour babysitting. How should I be a full time? No?
The children know I can't.
Other people's children know. Well, listen, you can buy your own damn coffee. You know. You don't need someone else to buy you a coffee in a random store. But thanks for the fun, fun story, Jessica, and be safe out there, y'all, be safe out there in these streets. All right, all right, well this was your week. Be a Q and A. We will see y'all next week. If y'all want to ask your question and have it featured on the show, go to Brandambission podcast dot com
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