1776: Ask Farnoosh: Navigating Severance, Executing Stock Options and Home-Buying Tips for the Self-Employed

Summary

So Money with Farnoosh Torabi
Episode 1776: Navigating Severance, Executing Stock Options, and Home-Buying Tips for the Self-Employed
Release Date: January 17, 2025

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In the 1776th episode of "So Money with Farnoosh Torabi," host Farnoosh Torabi delves into listeners' pressing financial questions, offering expert advice on navigating severance packages, executing stock options, and purchasing a home as a self-employed individual. This episode, released during the podcast's 10th-anniversary week, not only celebrates a decade of financial wisdom but also introduces exciting new projects, including the Montclair Pod, a hyper-local podcast focused on news and culture in Montclair, New Jersey.

Celebrating a Decade of So Money

Farnoosh opens the episode by reflecting on the podcast's significant milestones:

[01:00] Farnoosh Torabi: "We've reached over 40 million downloads and hosted incredible guests like Queen Latifah, Margaret Cho, and Barbara Corcoran. But the real stars are you—our listeners—whose stories and questions have shaped this journey."

She expresses heartfelt gratitude to her audience and introduces the Montclair Pod, aimed at providing an in-depth look into the vibrant community of Montclair, New Jersey. This new venture underscores Farnoosh's commitment to expanding her podcasting endeavors and engaging with diverse audiences.

Listener Questions Addressed

1. Navigating Severance and 401(k) Contributions

Listener: Jackie
Timestamp: [09:00]

Jackie shares her experience of being laid off after her role was significantly altered. Facing a choice between completing a challenging performance plan or accepting a six-week severance package, she opted for the latter and seeks advice on whether to continue contributing to her 401(k) during her final paychecks.

[11:30] Farnoosh Torabi: "If you don't have a fully funded emergency savings account—typically three to six months of essential expenses—it's prudent to pause 401(k) contributions to bolster your cash reserves."

Farnoosh emphasizes the importance of financial stability during transitions:

[12:45] Farnoosh Torabi: "In times of uncertainty, having liquid cash is paramount. It provides you the flexibility to navigate your job search without the immediate pressure of financial strain."

She advises Jackie to consider the duration of her job search. If she anticipates a prolonged search, increasing her savings should take precedence over retirement contributions. However, if she expects a swift transition, maintaining some level of 401(k) contributions, especially to capture any employer match, remains beneficial.

2. Executing Stock Options and Managing Debt

Listener: Luz
Timestamp: [20:04]

Luz presents a complex financial scenario involving stock options, company stock concentration, and existing debts. She owns $8,000 in government student loans at a 6% interest rate, a $4,000 car loan at 4%, and $7,000 in credit card debt at 0% interest. Additionally, 9% of her investments are tied to her company's stock.

[22:15] Farnoosh Torabi: "When exercising stock options, prioritize a significant spread between the exercise price and the current stock price. This maximizes potential profit and ensures you have funds to cover tax obligations."

Farnoosh advises Luz to diversify her investment portfolio to mitigate risks associated with overexposure to her employer's stock:

[23:50] Farnoosh Torabi: "You never want to have more than about 10% of your overall investment portfolio in any one particular stock, including your employer's. Diversification is key to financial resilience."

Addressing Luz's debt, Farnoosh recommends prioritizing high-interest obligations:

[25:10] Farnoosh Torabi: "Focus on eliminating credit card debt before it accrues interest. With 0% rates, there's an opportunity to pay down efficiently without immediate financial penalty."

She also highlights the importance of refinancing high-interest loans where possible and leveraging the upcoming contribution changes due to her partner's increased income.

3. Home-Buying Tips for the Self-Employed

Listener: Kate
Timestamp: [28:35]

Kate, self-employed and not holding a full-time traditional job, seeks guidance on purchasing a home given her non-traditional income structure.

[29:00] Farnoosh Torabi: "Working with a real estate agent who understands the nuances of self-employment is crucial. They can guide you to mortgage brokers who are experienced in evaluating entrepreneurial income."

Farnoosh underscores the importance of comprehensive documentation:

[30:20] Farnoosh Torabi: "Prepare detailed financial records, including profit and loss statements for the past two to three years. This transparency helps lenders assess your financial stability accurately."

She recounts her personal experience to illustrate potential challenges:

[30:55] Farnoosh Torabi: "I encountered difficulties with a lender unfamiliar with my business's financial flow. Collaborating with a knowledgeable bank representative was essential to securing my mortgage."

Additionally, Farnoosh advises enhancing perceived financial security by:

• Demonstrating consistent income streams: Highlighting patterns in revenue can reassure lenders of ongoing financial reliability.
• Increasing down payments: A larger down payment reduces loan-to-value ratios, making loan approval more attainable.
• Maintaining robust savings: Showing substantial emergency funds can mitigate lender concerns about income variability.

Conclusion and Looking Ahead

Farnoosh wraps up the episode by reiterating her commitment to providing actionable financial advice tailored to diverse listener needs. She invites listeners to engage with the podcast's new Montclair Pod and encourages continued participation through questions and feedback.

[35:00] Farnoosh Torabi: "Your financial journey is unique, and I'm here to provide the strategies and insights you need to thrive. Keep those questions coming, and let's continue building a community of financial empowerment."

As the episode concludes, Farnoosh reminds listeners of the ongoing opportunities to engage with her work, including upcoming workshops and exclusive member content through the So Money Members Club.

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Notable Quotes:

• On Emergency Savings:

  "Do you have a fully funded savings account for emergencies? If the answer is yes, then I would consider contributing to the 401(k). However, if you don't have that and you don't even have close to that, I'd recommend that you prioritize building up your cash reserves."
  — Farnoosh Torabi [11:30]

• On Diversification:

  "You never want to have more than about 10% of your overall investment portfolio in any one particular stock, including your employer's. Diversification is key to financial resilience."
  — Farnoosh Torabi [23:50]

• On Mortgage Preparation:

  "Prepare detailed financial records, including profit and loss statements for the past two to three years. This transparency helps lenders assess your financial stability accurately."
  — Farnoosh Torabi [30:20]

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Key Takeaways:

1. Severance and 401(k) Management: Prioritize building an emergency fund before continuing retirement contributions, especially during job transitions.
2. Executing Stock Options: Wait for a substantial spread between exercise and current stock price to maximize profits and cover taxes; diversify investments to mitigate risk.
3. Home-Buying as Self-Employed: Collaborate with real estate and mortgage professionals experienced with self-employed clients, and maintain thorough financial documentation to facilitate loan approval.

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Resources Mentioned:

• So Money Members Club: SoMoneyMembers.com
• Montclair Pod: MontclairPod.com

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For more insights and financial strategies, subscribe to So Money with Farnoosh Torabi and join the So Money Members Club for exclusive content and personalized financial guidance.

Transcript

[Farnoosh Tarabi]

My dad works in B2B marketing. He came by my school for career day and said he was a big roas man. Then he told everyone how much he loved calculating his return on ad spend. My friends still laugh at me to this day. Not everyone gets B2B, but with LinkedIn you'll be able to reach people who do. Get $100 credit on your next ad campaign. Go to LinkedIn.com results to claim your credit. That's LinkedIn.com results. Terms and conditions apply. LinkedIn the place to be to be.

[Ryan Reynolds]

Hey, I'm Ryan Reynolds. Recently I asked Mint Mobile's legal team if big wireless companies are allowed to raise prices due to inflation. They said yes. And then when I asked if raising prices technically violates those onerous two year contracts, they said, what the are you talking about? You insane Hollywood. So to recap, we're cutting the price of mint unlimited from $30 a month to just $15 a month. Give it a [e-mail] Switch $45 upfront payment equivalent to $15 per month New customers on first three month plan only taxes and fees Extra speed slower above 40gb details so money episodes 1776 ask Farnoosh ask Farnoosh. You're listening to so Money with award winning money guru Farnoosh Kharabi. Each day get a 30 minute dose of financial inspiration from the world's top business minds, authors, influencers and from Farnoosh yourself. Looking for ways to on gas or double your double coupons. Sorry, you're in the wrong place. Seeking profound ways to live a richer, happier life. Welcome to so Money. Welcome to so Money everybody. I'm Farnoosh Tarabi. Friday, January 17, 2024 how's everybody doing? If I haven't mentioned it already, and I think I have, but maybe you're hearing it for the first time. This is so Money's anniversary week. This week, 10 years ago we launched so this podcast is now in the double digits. I just wanted to take a moment start this show by expressing my gratitude to each and every one of you who have been listening to this show, especially from the beginning. I know many of you have. Many of you have stuck with this show and have taken us to now 40 million downloads over 1700 episodes. Guests like Queen Latifah, Margaret Cho, Michelle Buteau, Barbara Corcoran. So many more and so many more to come. But the real stars, the real stars are you. Your stories, your questions, some of which we will address today and your support have really been what has made so many successful. Over the years, you've shared how the show has inspired you to save more money, invest with confidence, pay off debt, negotiate raises and even jump ship. Find better places to work, start businesses. So knowing that this podcast has even been in a small part helpful to your journey, in your life, in your career and your financial journey, there are no words and my wish for this 10 year anniversary is just really simple. And I said this again, I'll say it again. Let me know how this podcast has impacted you. Was there a piece of advice or a specific episode that resonated? Was there a guest that gave you the permission or the aha to go and do something great? Leave me a voicemail. I'll put the link in our show notes. Or you can just email me [e-mail] Whether you want to leave a little anecdote or you even want to just come on the show because you have that much to say. I'd love to hear from you. Over the next few months, I'm going to be sharing some of your stories, either through snippets or actual guests on Sew Money. So that is my invitation to you and that would be a great gift for me if you would take me up on this offer. So what is next for me for my role in the world of podcasts? Well, the priority is to make this show better than ever. And how I'm gonna do that is, well, I don't know. Just I'm gonna lean on you to tell me what to do. That's how I've built this show. I have had some ideas of my own. I will take some credit. But a lot of this has been steered by your feedback, your questions. So I'm gonna keep doing that cause that's been working. I have though an exciting announcement which is that I'm expanding my work in the podcast space with a new project that I am so pass about. I've given you a little bit of a hint to it over the weeks, the past few months, but here it is. It's called the Montclair Pod. I've teamed up with two journalist friends in town. I live in Montclair, New Jersey to launch this hyper local podcast about this Essex county suburb. We're diving into the community's news. We're going to talk politics, we're going to talk culture. And our first two episodes will drop next week. I'm actually going to go ahead and hit play on our trailer right now because I'm so excited. I know a lot of you aren't even near me. But if you are in the Tri state area or if you are in Montclair, and I know some of you are in Montclair, because you stop me on the streets and you say, hello, here's the trailer. I'm so proud of it. Our goal really is to have fun, because if we're having fun, then hopefully the audience is having fun. But here we go.

[Farnoosh Tarabi]

This is so exciting.

[Allie]

Okay, are we counting us in?

[Ryan Reynolds]

Well, like, three, two, one. Yeah, yeah.

[Farnoosh Tarabi]

Okay, but two and one are silent, right?

[Ryan Reynolds]

Yes. Oh, really?

[Farnoosh Tarabi]

Five, four, three.

[Ryan Reynolds]

Welcome to the Montclair pod, your ultimate place for all things Montclair, New Jersey.

[Allie]

Or what do they call it? The Park Slope of New Jersey. That is a lie.

[Farnoosh Tarabi]

I feel like that's completely accurate.

[Ryan Reynolds]

Okay, I'm Farnoosh.

[Allie]

I'm Allie.

[Farnoosh Tarabi]

I'm Michael.

[Ryan Reynolds]

And the three of us had a crazy idea. Let's start a podcast about this town that we love so much. What has possessed us.

[Farnoosh Tarabi]

It's a very buzzy town, and I really want this show to be a resource for people who are thinking about moving here, who just moved here and are trying to figure it out, but also for people who predate all of us and are looking for an unvarnished fun look at this place that we all live in, which is objectively an interesting place. I mean, there's an episode of Mad Men all about how cool Montclair is.

[Ryan Reynolds]

Really?

[Farnoosh Tarabi]

I wouldn't say it's not all about that, but, like, you oversold.

[Ryan Reynolds]

You oversold it. This is our first season, our debut season. We've come out with some topics that we think are some central to what this town cares about, such as what.

[Michael]

The heck is going on with the real estate market?

[Allie]

Oh, it's insane. Best and final on Tuesday, right? Whatever it is. Feels a little.

[Ryan Reynolds]

Feels a little ick.

[Allie]

We're also going to be talking to politicians, both on the national level and local level. A lot of people have a lot of opinions about this town.

[Ryan Reynolds]

It's also kind of a quirky town, and the people are super interesting. You know, you could be at Java Love or at a restaurant or in the park and you run into people. For example, Mike and I recently ran into our mayor, Dr. Renee Baskerville, at None other than just Jakes.

[Allie]

You never know who you're gonna see.

[Farnoosh Tarabi]

She's cool and she's still working as a school pediatrician in East Orange. She's gonna give a great interview. I think we also need to break some news that is a personal Goal.

[Ryan Reynolds]

Okay, you're on it. Go.

[Allie]

I wanna talk to the people that have been here a long time. I think that's really important to get their take on how the town has evolved or how it's not evolved in.

[Ryan Reynolds]

A lot of ways.

[Farnoosh Tarabi]

One of our closest friends, she grew up here and still lives in her original neighborhood. Sometimes I' and she'll just look at me and the eyes will roll and I know I've made an ass of myself. We will probably do that every now and then, but we're not going to do that. No. Oh, you guys. Just me. I'm just. I'm the only idiot. Okay. Keep us honest people.

[Ryan Reynolds]

We have a hotline, everybody. You go to montclairpod.com voice your thoughts.

[Allie]

Questions, opinions about Montclair and we'd love to share it with our listeners.

[Farnoosh Tarabi]

You can feel free to leave us compliments too, because we're very sensitive.

[Allie]

Subscribe to the Montclair Pod today. Don't miss a single episode as we explore the heartbeat of Montcl one story at a time. Thanks for listening and see you in town.

[Ryan Reynolds]

And that's our trailer. You can start following us on all your favorite podcast players. We are on Instagram as well. I'll put those links in our show notes. If you want to start following me on that podcast, you are welcome. Tell a friend. Later this quarter, I'll also be announcing another podcast. I know what is going on. I'm hosting another podcast, this time through iheartmedia. They tapped me to host a pilot show about business leadership. It's called Leading by Example. And we have some incredible executive level guests joining me to talk about really their backgrounds, you know, their childhoods, their personal relationships, their personal experiences that inform their leadership style and how they show up at work and show up for their teams and their employees. Also, recognizing that the world is a scary place, there are a lot of influences out there, a lot of pressures. And as employees, we show up to work carrying a lot of that with us. And so as leaders, as bosses, as managers, how do they meet their employees, where they're at? I'm learning so much. I consider Leading by Example sort of a tangential podcast to so money. Stay tuned for that. We go live later in February. This week in the mailbag, we have questions about stock options. We have a question about how to buy real estate when you're an entrepreneur, and it's a little bit trickier. And we have a question about what to do when you get laid off and you're still at the company for a few weeks. Do you just abandon the 401k or do you continue to optimize it? I have some thoughts, but first a couple of quick announcements. If you're interested in focusing, really focusing on your finances this year, I invite you to join me inside the so Many Members Club. Here's what's happening this month in the so Many Members Club we have a live training on creating financial goals that actually stick. We have a monthly office hour where you can walk in, ask me your biggest money questions and as always, we have an on demand library of trainings, of workshops, everything from investing to budgeting to managing money and relationships. And we have a chatboard. So if you've got a question and you're on your way to like work and you want to know how to negotiate your raise, I just might read that in time and give you some thoughts. Meeting you where you're at. So if you're interested in that, you want to join us, we're a warm crowd. You can go to so many members.com if writing a book is on your bucket list. This year there are tickets still available to my Book to Brand workshop, early bird tickets are still available and my co host Rochelle Fredson, who is my book writing coach. She and I are hosting a free virtual event later this month where you can ask us anything about books, about book proposals, about the event. I'll put that link in the show notes so you can rsvp. We will record that as well if you can't make it live, but you just have to register and we'll send you the recording when it's done. All right, let's go to the Apple Podcast review section, pick our reviewer of the week and then it's mailbag time. This week we're gonna say thank you to Mermaid Mary who left review saying this podcast is so real and informative. I love Farnouche's content, her delivery and her guests. What a gift for us to have access to this information and use it to better our lives. Thank you Mermaid Mary. I really appreciate that review that was so kind of you. Five stars. I am honored and I would love to get in touch with you if you'd like to talk about money, your career, anything. You can email me [e-mail] Let me know you're the Mermaid Mary who left this review and I'll send you a link for us to schedule a time to talk. You can also DM me on Instagram direct message me there and let me know and I'LL also put the link for you there. You'll also get a free monthly trial of our so Money members club. So if we get this going soon enough, you can join our January Live workshop. All right, let's hit the mailbag. First question's from Jackie, who writes in on Instagram. Hey, Farnooch. I was recently given notice at my job that they're letting me go. The role I was hired for has changed significantly and it was either complete a really difficult performance improvement plan or take an option to transfer out of the company and get six weeks severance. I took the transition plan, so I'll be working throughout the month of January and then I'll get a six week payout for severance. My question is, should I stop contributing to my 401k through the remaining paychecks I get so I have more cash on hand? All right, Jackie, thank you so much. I'm really sorry to hear about your job, but it sounds like you're being proactive and you're making some really thoughtful moves. So you're off to a great start. Let's break this down. Should you stop contributing to your 401k, you're going to have paychecks coming in for January. You're going to get this six week lump sum severance. The decision really depends on your finances and how comfortable you feel with what you have in savings. Do you have a fully funded savings account for emergencies? How do you know? Do you have at least three to six months of your living expenses, essential living expenses, in a savings account somewhere? If the answer is yes, then I would consider contributing to the 401k. However, if you don't have that and you don't even have close to that, I'd recommend that you prioritize building up your cash reserves. Because as someone who has gotten laid off in the past and anyone else listening who has, you know that cash is paramount in these times of Transition. Stopping your 401k contributions temporarily to free up more cash is a smart move. In that. In. In that case, the other thing to consider is do you anticipate a long job search? If you think you're going to find a new job relatively quickly, then you might feel comfortable continuing some level of 400 contributions. And I want to asterisk this by saying that if there's a match involved and even if there's a little bit of Runway for you to contribute to the 401k, I would. And take advantage of that match for as long as you can. That said, if you think you're going to be looking for a job for many months and a longer gap then. I think it's safer, honestly, to just redirect those funds towards savings and that way you'll have less financial stress. You can pick a job that you want as opposed to a job that you have to have because your bills are coming due. You didn't ask for this advice, but I'm going to give it to you anyway. As you're transitioning in between jobs, health insurance is going to be really important to secure, I assume your company because There was a 401K. There was probably also a health benefit plan. Make sure that you have that tied up before you leave. Whether it's you're getting cobra, which is an extension of your existing health insurance plan. At a premium. At a premium, or you're getting something through the marketplace. Having a gap with health insurance is scarier than a gap with your 401k, in my opinion. And then this is a great time of year actually to be job hunting. So even though you're working still at this company for a while, until the severance kicks in, I wouldn't waste any time looking for work. Begin actively networking and apply for roles while you still have your job. Because the beginning of the year is when budgets reopen, companies are more optimistic about their hiring needs and I think more offers are made in the first quarter. Thanks so much for your question. Good luck and let me know if you have any more questions as they come up. Coming up after the break, when's a smart time to exercise your stock options at work and trying to buy a house? But you're an entrepreneur or self employed? I've got some extra tips. Stay with us.

[Michael]

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[Ryan Reynolds]

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[Michael]

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[Ryan Reynolds]

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[Michael]

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[Ryan Reynolds]

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[Michael]

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[Ryan Reynolds]

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[Michael]

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[Ryan Reynolds]

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[Michael]

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[Ryan Reynolds]

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[Michael]

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[Ryan Reynolds]

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[Michael]

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[Ryan Reynolds]

All right, next is a question about stock options. When to exercise your stock options? This question comes from Luz in the audience, and here's her question. Farnoosh as part of my bonus package, I get stock options every March and I was wondering how big the spread between the exercisable price and the actual stock price should be for me to exercise the stocks. Once I exercise them, should I keep the stocks in my brokerage account or sell them off? Additionally, I have restricted stocks that become vested every bonus cycle. Should I keep those stocks or sell them to buy other stocks? Since 9% of my investments are stocks from my company, my company's in the top 50 companies in the S&P. I'm 31 years old and I do believe that my company's stock value will go up later this year. I have about $8,000 in government student loans at a 6% rate. I have a little bit of a car loan at a 4% rate and I have $7,000 in credit card debt, but that's at a 0% interest rate. She goes on. My partner started his own company and I became the breadwinner of the house these past two years. He's going to start contributing to the house expenses this May, and all my bills will be cut in half, allowing me to contribute more to my retirement account. And I can also save more and pay off my debts faster. I own my home with a less than 3% interest rate and I have about 10,000 in emergency savings. Lose. Hats off to you, my friend. You're doing great. All right, let's talk about this bonus package. This is a nice perk that rich companies like to give their employees. And you mentioned your company's in the top 50 of the S&P 500. My advice for when to exercise stock options is this. You want to obviously wait when there is a large spread between the exercise price and the current stock price. The bigger the spread, not only the greater your profit potential when you exercise those options, but you'll also have money to pay the irs. Exercising stock options triggers taxes, and it's usually based on the difference between the exercise price and the fair market value at the time of exercising. So you want to make sure you have enough funds. So when you can exercise with a big spread, that's more money in your bank account. But you'll want to hold on to some of that for the irs. So that's the rule of thumb. Just wait until there's enough of a spread where you feel like you're going to do it well. You're going to get a nice profit and from that profit you'll pay the irs. But after that subtraction, it still will be meaningful to you what to do after exercising your stock options. Okay, so whether you hold or sell the stocks once you've exercised the option depends on your overall portfolio and your risk tolerance if you decide to sell. This can help to potentially diversify your portfolio and reduce the risk of having too much tied up in one company, especially your employer. As much as we love our companies and we believe in them and we go in there every day, so we have a different perspective than the average investor on the Street. You never want to be over indexing on any particular stock, right? Even your own company. The rule of thumb that I've, that I have shared for years now, and this is gospel now in the industry, is you don't want to have more than about 10% of your overall investment portfolio in any one particular stock. If we recall during The Great Recession 2009, 2008, 2009. A lot of people, especially in the financial industry, had a great portion of their net worth tied to their company. So when they got laid off, when their companies went bankrupt and they got laid off, it wasn't just a blow to their careers, it was a blow to their investment portfolios. In fact, Sally Krawcheck, of all people, she's now the head of Elevest, which is an investment trading platform for women designed for women during the Great Recession, I believe she was at bank of America and she came on this podcast and talked about how about 30% or so of her net worth was tied up up in her company. And she ran their global wealth and investment management practice. So she believed in the firm, but maybe too much. And when she came on SO money, she talked about how losing her job in that environment wasn't just traumatic for her career at that point, but it was also really, really hard for her financial portfolio. If you hold onto the stock, then you know, again, you gotta be confident in your company's long term performance. You're okay with volatility, but you already have 9% of your investments tied to your employer. So I would consider not going too far above that and maybe even selling some shares to reduce the concentration risk. Now, you mentioned your household and you've been the breadwinner and your partner is going to start contributing to household expenses. That's great. If I were you, and I am you, because I'm the man, I'm also a breadwinner in my marriage, I would prioritize credit card debt number one. Although it's at 0% right now, I feel like that's a promotional rate. It's not going to last forever. So make a plan to pay this off before the rate jumps. Then I would focus on retirement and emergency savings. I didn't say student loans and car loans next because those have relatively low interest rates. And I think your money's going to go further in this in the market than it would paying down a 4% car loan or, you know, a 6% student loan. But if you can refinance those student loans to a lower interest rate, I would look at that. Bottom line, my friend, you're in a strong financial position. You've got some tweaks to make, potentially, like diversifying your portfolio, managing debt more strategically. But you're really doing well. You're a homeowner, you're the breadwinner, you've got investments, got low interest debt, in some cases, no interest debt. I love it. You're so money Next up, a question about buying a home. As an entrepreneur. This question comes from Kate. Are there things I should know or that are different since they don't have a full time consistently paying job? Oh don't I know this. I know a lot about buying a home. When you don't have a full time job and you are self employed, it's really important that you work not only with the right real estate agent who understands your career profile but also when you're about to go shop for that mortgage before you get pre approved. Ask around, ask your broker, in fact your real estate broker if they know any really good mortgage brokers or banks even that prefer or have a history of lending to entrepreneurs and business owners. Because I will tell you that not all banks are capable and knowledgeable on how to assess a P L from an entrepreneur to figure out can we should we lend them money? I hit a big snag when I was trying to buy this current house and I I'm recording in. I went to get my mortgage from the bank that I had been pre approved at but unfortunately the loan officer that I was working with just was so unfamiliar with reading a P and L was unfamiliar with understanding RW2 and so I ended up quickly because you have to move real fast once you've made an offer to find a different bank. And I used consulted with my real estate agent and she said you got to talk to so and so at this bank because he is the best and he will actually take the time to understand your career profile and how you make money and communicate that to the underwriters who aren't always well versed in that because ultimately what the underwriters are trying to figure out is your risk profile. If we're going to lend you all this money, we need to understand how your business operates. If you're a business that tends to make more of your money in quarters three and four and you're applying for a loan in quarter one and it doesn't look like you've made any money this year that needs to be explained and you need evidence of that. So you might show last year and the two years ago's P Ls to show that, look, my business concentrates a lot of its revenue towards the second half of the year. So things like that. When you're in the process of getting a mortgage and you don't have the right people involved, it can make or break a deal sometimes. So that's a cautionary tale, but it is something you can definitely prepare well for by taking the time to identify the people, the banks, the lenders, the real estate brokers who have worked with people like you in the sense that you operate your own business. Outside of that. There are of course other criteria, extra criteria for business owners as we're out there trying to shop for loans, especially big loans like mortgages. One is that the bank will probably want a letter from your tax preparer or your CPA or your financial advisor or both, just to verify your business is in good standing. That if your business has a bad year, it's not going to impact your personal finances. They're going to want to see about two or three even years of IRS tax returns. So make sure you're organized in that way. I keep things in cloud folders. What else can I tell you? I mean, you have to make a little bit more of an effort in demonstrating that you are risk proof. Banks want to feel confident, right, giving you money. So to the extent that you can demonstrate that, maybe it means having more in your savings, putting a higher down payment towards the home. All this is really, really critical, especially when you're a small business owner or an entrepreneur trying to secure a loan. And that's our show everybody. Thanks so much for tuning in. If you are enjoying what you're hearing, well I don't have to tell you, you gotta hit that subscribe button and follow us so that you never miss an episode. Leave us a review. If you leave a review and I catch it on a Friday episode, you know what's gonna happen next. I'm gonna invite you to have a free 15 minute phone call with me. You get a free 30 day trial of the so Money Members Club. I hope everybody has a great long weekend. I'll see you back here on Monday. And I hope your weekend is so money.

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