Cash Money: Mo Money Mo…Money?

This one is for all my bartenders, strippers, waitstaff, event producers, and cash-getters. Y’all got MONEY! And that money is in CASH.

I frankly love cash. It’s the real deal. The green. Paper. Benjamins. When I have a stack of $20s or $100s I will wave and throw them around because WHY NOT.

Getting cash is great! And with your cash, I’m about to teach you how to low-risk make $5.5 grand in 15 hours, by putting $20-25/week into the bank and then investing it.

But first: There’s a few problems with cash — some will be obvious and some might not be:

  1. It’s not in the bank, which means it’s not attached to your debit or credit card.
  2. It’s not in the bank, which means you can’t put it out of sight in a savings account
  3. It’s not in the bank, which means you can’t invest it and earn money on yo money.

There’s a theme here, right? The main “problem” with cash is that our money is increasingly run digitally, which means at least some of your money needs to get digital to actually help yo life.

But I don’t want to pay taxes / my IBR to go up / to go to the bank?

I hear you. But, do you want to eat when you’re old or pay off debt so you’re not funding bankers’ vacations forever? Yeah, you do.

Here are some things I bet you also want:

  1. You want your income record to have earnings, so your disability and SSI accrue.
  2. You want to have $$ you can save in an interest-bearing savings, bond, or stock investment, not in a sock drawer, so it earns interest and keeps up with inflation (~2%/year).
  3. You want to pay off debt because interest is the ultimate hustle and when we have debt we’re getting fucking hustled by the Man.

So, you want to put money in the bank, save it, and get your hustle on. Trust: if you’re banking under $36k/year, your taxes are LLLOOOOWWWW AF and it’s better to get the money handled now. Plus — if you put some of the money you bank into a tax-deferred retirement account, then you won’t pay taxes on that now AND you can write that amount you invest off of your taxes.

If that part made your eyes roll, don’t worry about it. You can also just save some damn money for a rainy day or to look good on paper and be doing yourself a big favor.

I’ve had several cash paying jobs in my life, so I’m gonna speak from experience here.

Me and my tour co-producer getting rich AF off making art. Ok we made $400 but it WAS awesome.

Make your money, get right with God the IRS, and figure out how to save some of that shit!! I put $5k away in an IRA over my late 20s and damn if it’s not $8500 a few years later. Interest! I bet you can do better: here’s how.

 

  1. Put some money in the bank
    Don’t forget to deposit extra to pay taxes if you’re just chocking it into savings! 15-20% extra should do it. If you want to save $1000, that means depositing like $1250 #realtalk

 

    2. Keep a record somewhere. Just to make your life easy later. If you have to file it on your weekly timesheet, that’ll do it. Otherwise an email you re-send yourself each time or a .txt file with the date and what you earned it doing is fine.
    3. Open a Personal and/or ROTH IRA and put up to $5500 total in using an automated weekly or monthly deposit so you can set and forget. Try for at least $1000, as in the example:
      • If you make under $36k on your taxes, I suggest a ROTH. You will pay taxes on the money, but it accrues interest post-tax and you can pull the principal out after 5 years, so it’s like a deep savings account. Example: $25/week or $110/mo
      • If you want to pay taxes later, open a Personal IRA. Example: $20/week or $85/mo
    4. Open an online savings account and set up autodeposits of some of the money. You don’t have to invest it if you don’t want to bb — and frankly having $$ you can access in an emergency is a truly fresh plan.
      • Bonus: find an account that will pay you interest, you can find over 1% these days with ALLY or CIT or Barclays…
      • Extra bonus: Set up a special account for taxes so you don’t feel the burn in your regular savings account so much
    5. Claim all that money you deposited on your taxes
      • If you make under $118k a year, you can write all the Personal IRA deposits off. No extra taxes! But a ROTH is still banging and generally worth it.

 

 

The payoff:

If you can stash $5k every year (that’s ~$100/week) in an IRA or a personal investing account, and invest it at 7% per year (like in an index fund), you’ll have $141,300 in 15 years (which will buy $105k of things after adjusting for inflation).

Mic drop.

If you don’t have a ton of money and/or are worried about the tumutuousness of stocks, consider that you can stash $1k/year in a BOND or bond fund earning 3.5% — and after 15 years you’ll have $23,604, which will buy $17,535 after inflation.

Alternately, you can put $1k a year in your sock drawer for 15 years, and then be able to buy about $12k worth of things in 15 years, meaning you lose three grand.

I don’t know about you, but I definitely have an hour a year to make a deposit and end up $2.5 grand ahead instead of $3 grand behind on my savings goals. It’s not often you can make $5.5 grand in 15 hours!!

The big takeaway

The whole bank –> declare on your taxes thing is about legitimizing your money. Once it’s legit? You can next level your money, plan ahead and have choices.

That’s what it’s about friends, so I hope you choose to #SaveYoMoney