PAYCHECK TO PAYBACK
AT 29, THIS ENTREPRENEUR KNOWS THE STRUGGLE OF LIVING
Regret over initially not saving enough adds fuel to the fire for marketing exec
Vivian Gomez, a marketing executive, remembers the days when she was making barely enough to cover rent and the cost of her commute.
She started in the public relations business at 20 and by the time she was 21 was director of her division at a celebrity marketing firm. From there, she took what she learned and founded her own company.
“When I launched The Maven Firm in 2011, I had one client who paid a $5,000-a-month retainer,” says Gomez, now 29 and owner of the New York-based boutique marketing, public relations and branding agency with celebrity and small-business clients.
It sounds like a decent amount of money, especially for a startup, but after paying expenses, she had about $100 left in her bank account for the first three months in business.
“I was literally living paycheck to paycheck,” she says. “But I didn’t mind because feeling like I owned something that was mine made me work even harder.”
It was a tough lesson for the young entrepreneur who kept pondering: What if I had saved for a couple of years before making this decision? I wouldn’t have felt the pressure to make it work no matter what.
That pivotal thought motivated her to get the company on track fast by attracting a stream of clients, hiring freelancers and providing stellar service.
Initially, to do a really good job, she had to spend more than half of a given client’s retainer to hire additional support staff, she says.
Today, her firm, which has revenues in the six-figure range, has an average of 10 clients on retainer while employing five full-time staff members and a gaggle of independent contractors.
Never one to rely on a single stream of income, Gomez is in the process of starting two addi- tional businesses: an e-commerce site and a partnership with an AList Canadian entertainer and beverage brand. She is investing her resources and expertise into the brand while owning a major stake. “My company will be handling all of the celebrity endorsements, media coverage/outreach, event partnerships, brand campaigns and publicity for the brand,” Gomez says.
She’s also an avid saver, squirreling away $1,000 to $5,000 a month for personal emergencies in addition to saving in an IRA.
“I actually panic now if I don’t put a substantial amount of money into my savings each month,” she says.
With $15,000 left in student loan debt, she makes automatic payments to protect her credit score. She needs to leverage that A-1 score to invest in the next venture. Her take on following a dream is simple: “Yes, follow your passion but also explore all as- pects of your talent and work smarter because one single source of income will not make you wealthy.”
Carlos Dias Jr., a wealth manager and financial adviser at MVP Wealth Management Group and Excel Tax & Wealth Group in Orlando, says on the face of it, Vivian’s financials look good. But he’s concerned about her student debt.
“With a 4% interest rate on her student loan, Vivian would pay
$5,374 in interest on every
$25,000 borrowed over a 10-year period,” Dias says. “Although rates can range anywhere from
3.75% to 8.5%, it is to her advantage to pay off her student loan debt as soon as possible.”
Dias offers tips to other entrepreneurs: uDi►ersify investments.
Although every person’s risk tolerance is different, diversifying your assets is a way to mitigate risk, Dias explains. Investing in the stock market for the long term can be cost-effective (depending on who is managing your account), passive (you don’t have to be hands-on like with real estate) and rewarding. uSa►e more for emergencies. While Vivian is saving more than enough in case she needs some extra cash in a pinch, many entrepreneurs underestimate how much is needed. Dias advises: “Entrepreneurs need to have at least 12 to 15 months of expenses set aside, then they can focus on investing in the market.” uSwitch to a higher-yielding bank account. “Vivian runs the risk of receiving a negative return by keeping so much of her cash in a low-yielding (or nonyielding) bank account because of inflation,” Dias says. “We have experienced a lower inflation rate; however, a good standard would be around 3%, meaning that $1 today won’t have the same value next year.” His advice? Place the money in a money market account, Certificate of Deposit (CD) or Treasury Inflation-Protected Securities (TIPS), which require a five-year time commitment. uSecure your financial fu
ture. Look at the retirement accounts of today as your Social Security because over the next 30 years, it’s going to look totally different. “Start saving as much as possible in your retirement accounts,” he says.
“I actually panic now if I don’t put a substantial amount of money into my savings each month.”
Vivian Gomez