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zblundell

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Ok so I have history of being a true financial f***up. I am about to finish my Master’s degree in Radiology Administration which will hopefully make me more money (not rich slowlane) to help pay my debt. I have quite a bit of debt so it make take me a while to pay it all off. My question is do I need to focus on being completely debt free before starting a business ( will take several years) or do I focus on starting a side business now to pay off all my debt faster?? My dad was a high school drop out and hunted by the IRS for not paying taxes and my mom is doing well but has only taught me about saving and sacrificing everything in order to retire for minimal income in my 60s and 70s. I have a few business ideas and I am ready to get started but is it wise to do if I am in debt? Married with a 13 year old stepdaughter. Any and all thoughts will be greatly appreciated. And yes I am working and making roughly 50k a year and my wife works too. Lived outside my means and looking on steering my financial ship in the right direction.
 

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Conscripted

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I think the first step is to stop living above your means. It was a little unclear from your post whether you had already done that.

It isn't necessary to pay off all your debt before you start a business. Many people work their business in the evening and start with minimal money. That being said you will have more money and energy to put into a new venture if you aren't worried about high debt levels.

The important thing is to decide what you need to do and then commit to the actions required.
 
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zblundell

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Yes I have stopped living above my means. I don’t charge anything anymore and I don’t spend unnecessarily. Thank you for your input.
 

Michael Burgess

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I would suggest paying down whatever bad debts you have (eg. high-interest credit cards, auto loans, etc) ASAP. While doing that, try to keep your personal expenses as low as reasonably possible. Build up whatever "emergency fund" you need (say 2-3 months expenses), so if something catastrophic happens, you have cash to back you up. This will help you feel a bit more secure.

While doing all of this, I would start whatever business you can while ALSO working your regular job. Hopefully the business doesn't need much capital to get started. Then take all of the income you can generate from that business, and pump it into growing that business, and paying off more of those bad debts.

For what it's worth, if you have debt at a low interest rate (such as student loans, or a mortgage), it may not be worth paying them off any faster than they are already set up. If you pay off debts at a 4% interest rate, you could have possibly used that money to get a much higher return.

Good luck and all the best on your journey!
 

alexkuzmov

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Ok so I have history of being a true financial f***up. I am about to finish my Master’s degree in Radiology Administration which will hopefully make me more money (not rich slowlane) to help pay my debt. I have quite a bit of debt so it make take me a while to pay it all off. My question is do I need to focus on being completely debt free before starting a business ( will take several years) or do I focus on starting a side business now to pay off all my debt faster?? My dad was a high school drop out and hunted by the IRS for not paying taxes and my mom is doing well but has only taught me about saving and sacrificing everything in order to retire for minimal income in my 60s and 70s. I have a few business ideas and I am ready to get started but is it wise to do if I am in debt? Married with a 13 year old stepdaughter. Any and all thoughts will be greatly appreciated. And yes I am working and making roughly 50k a year and my wife works too. Lived outside my means and looking on steering my financial ship in the right direction.
I dont know much about paying off debt, but I can give you some advice about starting a business.
You dont need much if any money to start a business.
Start working on one idea and confirm a market first. See if anyone is willing to pay for what you offer. Be sure to make a few sales first.
If you confirm a market, only then look into spending money to legalize it.
After that buckle down and work on it.
 

Lyinx

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Ok so I have history of being a true financial f***up. I am about to finish my Master’s degree in Radiology Administration which will hopefully make me more money (not rich slowlane) to help pay my debt. I have quite a bit of debt so it make take me a while to pay it all off. My question is do I need to focus on being completely debt free before starting a business ( will take several years) or do I focus on starting a side business now to pay off all my debt faster?? My dad was a high school drop out and hunted by the IRS for not paying taxes and my mom is doing well but has only taught me about saving and sacrificing everything in order to retire for minimal income in my 60s and 70s. I have a few business ideas and I am ready to get started but is it wise to do if I am in debt? Married with a 13 year old stepdaughter. Any and all thoughts will be greatly appreciated. And yes I am working and making roughly 50k a year and my wife works too. Lived outside my means and looking on steering my financial ship in the right direction.
Sounds like your on the right track, being willing to learn is the biggest thing. Too many people don't want to learn or change anything and cannot figure out why they aren't changing.

1. If possible, ditch the cards
Cards are convenient, cash is not. Therefore, spending with a card is convenient and will be done a lot sooner. If you want to save $$$ then start shopping locally, in person.

Have you ever gone to a store and bought a snack (or two) while shopping?
Eat a snack before you leave the house, you are much less likely to buy snacks if you are not hungry at a store, and you won't get ripped off by marked up prices at the checkout aisle.

2. Track each $ spent, and where it went!
if possible, track it by expense types. examples could be:
Snacks, toys, misc stuff you don't need: toys
Food for family, general family items, new vacuum, etc.. : Essentials
Payments on car, house, or other long term items: Long term
$$$ into books, schooling, or business ventures (including savings, stocks, bonds, etc..) : Investments

3. For the crazy person
I've heard of someone doing this, and I thought it sounded like a good idea. I'm seriously considering doing it myself... tracking every $ that I spend, and paying for everything that I can with cash, and tracking the serial numbers of every dollar spent.
This idea sounds terribly mind-numbing and sounds like it could take some time, but I really think this would teach anyone the basic principles of money a lot faster than a lot of other methods out there.
All it would take is to put a post-it note in your wallet, and keep writing every serial number down as it passes through your wallet, and where you spent it.

4. Financial statements (a must in our family) done yearly, and then review it compared to your last few years to see what progress (if any) that you are making.

5. Tax breaks something that I want to do and have not gotten it done, is buying a few books on tax breaks and tips. If you're traveling on the fastlane it could have huge payoff. A simple tip that I heard from a businessman, he said that in their state they can sell Agricultural property and re-invest it within a year and don't need to pay taxes on it if they buy the same $$$ amount of new property as what they sold. So they sell 1000 acres at $17,500/acre and buy 10,000 acres at $1,750/acre and then increase the value of the land, rinse and repeat. Day to day operations while increasing value also make quite a bit of $$$ in the meantime until the value has risen far enough.

See the attached Financial statement that I use.

Links:




Best of luck in your adventures on the fast lane! From a fellow traveler
 

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NursingTn

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I have no debt. Since you have debt, prioritize paying them off because they can potentially decrease your quality of life.

I am maxing my Roth IRA, 401k, and HSA because I do not need the money for daily nor business expenses. I recommend contributing at least 1% to one or more of these accounts for a rainy day when you're older and possibly can no longer earn a good living - either as an employee, entrepreneur, or both.

I work FT now with incredible schedule flexibility (work every other week). So I am focusing on side hustles on my off weeks. I actually have the opportunity to engage in multiple side hustles. If your work schedule cannot, then focus on only making 1 side hustle work. You can turn it into fast lane eventually by applying CENTS principles.

All of my side hustles, I started off with no more than $100 to evaluate if they have potential value. I know there is a need and value for my side hustles because they have brought me the greatest market validation: People actually throw money at me for the goods and services. Do not make excuses for yourself, thinking you need a butt load of money to start a viable business.

Good luck.
 
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OP
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zblundell

Contributor
Read Millionaire Fastlane
I've Read UNSCRIPTED
Oct 2, 2019
60
50
49
I would suggest paying down whatever bad debts you have (eg. high-interest credit cards, auto loans, etc) ASAP. While doing that, try to keep your personal expenses as low as reasonably possible. Build up whatever "emergency fund" you need (say 2-3 months expenses), so if something catastrophic happens, you have cash to back you up. This will help you feel a bit more secure.

While doing all of this, I would start whatever business you can while ALSO working your regular job. Hopefully the business doesn't need much capital to get started. Then take all of the income you can generate from that business, and pump it into growing that business, and paying off more of those bad debts.

For what it's worth, if you have debt at a low interest rate (such as student loans, or a mortgage), it may not be worth paying them off any faster than they are already set up. If you pay off debts at a 4% interest rate, you could have possibly used that money to get a much higher return.

Good luck and all the best on your journey!
Thank you sir! I am paying off my high interest date (CCs) and trying to put back some money in savings. I am doing very thorough research as to what needs I can meet and then I will start the business process. It make take me a minute while working full time but I am persistent and have a little bit of an obssessive behavior when I really want something. I appreciate your time.
 
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OP
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zblundell

Contributor
Read Millionaire Fastlane
I've Read UNSCRIPTED
Oct 2, 2019
60
50
49
I have no debt. Since you have debt, prioritize paying them off because they can potentially decrease your quality of life.

I am maxing my Roth IRA, 401k, and HSA because I do not need the money for daily nor business expenses. I recommend contributing at least 1% to one or more of these accounts for a rainy day when you're older and possibly can no longer earn a good living - either as an employee, entrepreneur, or both.

I work FT now with incredible schedule flexibility (work every other week). So I am focusing on side hustles on my off weeks. I actually have the opportunity to engage in multiple side hustles. If your work schedule cannot, then focus on only making 1 side hustle work. You can turn it into fast lane eventually by applying CENTS principles.

All of my side hustles, I started off with no more than $100 to evaluate if they have potential value. I know there is a need and value for my side hustles because they have brought me the greatest market validation: People actually throw money at me for the goods and services. Do not make excuses for yourself, thinking you need a butt load of money to start a viable business.

Good luck.
Thank you. It is good to know that you do not need thousands of dollars to start a business. I guess it was that scripted concept that I was taught that businesses can only be started by borrowing large sums of money and hope you do not have to bankrupt the business. Thank you for your time and advice.
 

FierceRacoon

Bronze Contributor
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Jun 1, 2019
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3. For the crazy person
I've heard of someone doing this, and I thought it sounded like a good idea. I'm seriously considering doing it myself... tracking every $ that I spend, and paying for everything that I can with cash, and tracking the serial numbers of every dollar spent.
This idea sounds terribly mind-numbing and sounds like it could take some time, but I really think this would teach anyone the basic principles of money a lot faster than a lot of other methods out there.
All it would take is to put a post-it note in your wallet, and keep writing every serial number down as it passes through your wallet, and where you spent it.
Tried it more than once. I was not reviewing those notes, however, so it was not really doing much. After a while I got used to it and would overspend with a clean conscience, knowing that it was written down never to be read again. I found it a bit like trying to set up a bunch of good habits without high-level goals. Since I had no reason to save at that time, nor any particular budget to stay under, it ended up being just an abstract exercise.
 

Entre Eyes

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Traveling to Higher Conciousness
Opportunities do not wait. I think if you create something people love then that success will pay off your debt.

But of course you have to have a new system in place so you do not experience a complete circle.
 

TheCj

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Highly recommend Dave Ramsey Total Money Makeover Book.

Can see the nice graphic The Abundant Man put up there for the overview.

Hopefully you and your wife are both on the same page with the financial stuff.

Check out the Dave Ramsey Total Money Makeover Book or audiobook, can find it in most libraries. He also has youtube video's.

Start doing what is outlined to take control of your money.

After finish step 1 you will have your emergency fund. Should be feeling better month to month about having or getting control on your money. Since you will be living below your income to save/build up the emergency fund.

At this point, could be 2-3months or more, you should be feeling good about going in the right direction. So then it becomes a matter of decreasing expenses, and increasing income. You will know where your money is going, what it costs for your household to survive etc..

Focus on one thing at a time. Have a dream life/goal you both want to work for.
 

TKDTyler

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My question is do I need to focus on being completely debt free before starting a business ( will take several years) or do I focus on starting a side business now to pay off all my debt faster??
Not at all. It is all about value of return on the money you do have.

Let's say your loan interest rate is 5% - the question you should ask yourself is if the money you put into your student loans can give a higher ROI per year than 5%.

If the answer is yes, then the smart move would be to invest into that path because the value of your money goes further + you are creating an asset.

I came out of school with $120,000 in debt and was asking myself the same questions years ago - I ended up taking the risk to create a product and slowly scaled up while paying my monthly minimums.

The end result is that if I didn't do this, I would be debt free and worth $0 right about now - the situation I find myself in is that I still have ~70k in debt, but now I have an additional income stream + a business asset that I can sell if I wanted.

For me it was doing my numbers and making a choice between debt free with $0 net worth, or in debt with $(some value) of net worth. While I had no guarantee of success, I did everything possible to derisk my investment in my future.

If you want to take a read, here is the thread I posted a while ago.:
 

CaptainAmerica

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I'm adding a precursor to all of this, for people who might be reading this and not quite at your income level yet....

If you don't have steady income, get it (and take anything if you're really struggling). If the income isn't enough, get a tangible skill that will get you a better income. There is a bottom limit on how much you can earn - but there is no top limit!

ZBlundell is headed in the right direction - job, working spouse, tangible, in-demand skill. Live below your means (always) and save up for a slingshot business. A slingshot business is one where you build up resources, demand, and clientele, and then let it loose.

Also, check out Profit First! I use it for both business and my personal finances, and it's been a tremendous help.
 
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zblundell

Contributor
Read Millionaire Fastlane
I've Read UNSCRIPTED
Oct 2, 2019
60
50
49
I'm adding a precursor to all of this, for people who might be reading this and not quite at your income level yet....

If you don't have steady income, get it (and take anything if you're really struggling). If the income isn't enough, get a tangible skill that will get you a better income. There is a bottom limit on how much you can earn - but there is no top limit!

ZBlundell is headed in the right direction - job, working spouse, tangible, in-demand skill. Live below your means (always) and save up for a slingshot business. A slingshot business is one where you build up resources, demand, and clientele, and then let it loose.

Also, check out Profit First! I use it for both business and my personal finances, and it's been a tremendous help.
Thank you for your guidance and responding to this post. I will check out Profit First. Is it the book by Mike M.?
 

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