Finances are the great motivator for some solopreneurs. But even if money isn’t what gets your blood pumping, it is still a necessity and still plays a significant role in your life.

Here to talk with us about how best to manage your finances as a solopreneur and how to live rich even when you’re not is the one and only Farnoosh Torabi.

Farnoosh is an exceptionally talented financial diva, author and podcaster. Join us as we dive into her background and her strategies for financial success on episode 227 of The Solopreneur Hour.

More About This Show

Farnoosh Torabi has brought together two of her passions: journalism and finances. Growing up the daughter of Iranian parents in the blue collar township of Worcester, MA she wasn’t born into money and privilege. But her parents both educated her on various aspects of money and never underestimated her ability to understand financial concepts.

While in college she entered the finance program and pursued a major in Finance. But because she had long been interested in journalism and broadcasting, she looked for ways to expand her knowledge in that area as well. After completing her finance degree she applied to graduate school for journalism and was accepted at Columbia.

From there she earned a Masters degree and went on to work for Money magazine, later expanding into the digital world. But living in New York was expensive and she knew she needed extra income sources. So she wrote two columns for a daily paper and later turned those columns into her first book, You’re So Money – How to Live Rich Even When You’re Not.

And so began her brand, You’re So Money. Today she has a podcast by that same name, she’s written several more books, is a contributor for Money magazine, The Today Show and Yahoo, among many others.

The Finer Details of This Show Include:

* How did she get her first book published?

* Have incomes been stagnant for a decade?

* How to expand your income in today’s marketplace.

* Is it easier to make more money or save more money?

* Why did she decide to go into podcasting?

* And so, so much more!

On today’s show Farnoosh shares with us some specific strategies for managing our money, wherever we’re at. If you’re not yet a full-time solopreneur but you’re wanting to make the leap, she recommends having 3-6 months of income saved. And by income she means your necessities like rent or mortgage, food, and insurance…whatever it takes to keep you warm, clothed, fed and housed!

She also gives us suggestions on how much she believes is prudent to spend on rent and car payments. Housing shouldn’t be more than 30% of your net income. So if you make $10k a month spending $3k a month on rent is on target. And if you’re in the market for a car and are getting a car payment it should only be 15% of your take-home pay.

When you’re looking to invest, Farnoosh also has guidelines for saving and investing. Of the wealthiest people she’s spoken to on this subject, they are investing 20% into their savings. The usual recommendation is 10% but she says once you’re earning $5k a month start putting $1k into savings. For your retirement open up a SEP IRA which is like a 401(k) for self-employed people. Whatever you put away is tax-deductible and it stays invested until you’re ready to retire.

In terms of choosing where to invest your SEP she recommends index funds that are not actively managed. You want to spend as little as possible on management fees so you’ll be looking for an index fund that is not actively managed. Any broker can help you set this up.

Farnoosh and I also talk about debt management resources (the re...