Dear Dave,
My husband and I have a beginner emergency fund set aside, and we’re working on paying off $30,000 in credit card debt and two cars in Baby Step 2. He would also like us to start putting money aside for a couple of trips and a few other things we have always wanted. This makes me nervous, because we have made so much progress over the last year in getting control of our finances, paying off debt and living on a budget. I understand wanting something to look forward to, but I would hate to see us slow down when we are doing so well. How do you feel about this?
Marie
Dear Marie,
Okay, so you have two car payments hanging over your heads, plus a bunch of credit card debt, and your husband wants to throw saving for toys and vacations into the mix? I’m sure he’s a good guy, and he has obviously been on-board with your financial overhaul so far, but I wouldn’t recommend doing this.
The reason people are successful following my plan is because I teach common sense methods, wrapped up in unbridled, scorchedearth intensity. There’s a process here. There’s an idea combined with passion. And when you plug into it full force, you’re going to move in a positive direction so quickly it’ll make your head spin.
You know how I say personal finance is 80% behavior and only 20% head knowledge? It’s true. Behaviors have to change. The more dramatically they change, the better the results and the faster you progress. But if you don’t plug into it, you’ll fall back into the same old things.
It’s okay to save up for a trip or buy some fun stuff in the general philosophy of life. But getting out of debt, and having control of your finances should come first. Remember when you were a kid, and you had to finish your dinner or clean up your room before going out to play? That’s what I teach. Work first, play later.
Trust me. It’ll pay off in the long run!
— Dave
Dear Dave,
I’ve been wanting to start my own small business for years. The only problem has been my current job. I make good money, but I also put in a lot of hours. About a month ago, I came up with an idea I think would be really successful. How do you feel about me handling the books of this new business, and generally overseeing things, but hiring a manager to handle the day-to-day operation?
Temple
Dear Temple,
I don’t like this idea very much. In fact, I hate it. If your idea is to crunch a few numbers, and stop by once in a while just to make an appearance, then I’d advise against the whole idea.
The big problem with your plan is that you are only a small part of the equation, when it’s supposed to be your business.
In one survey by Forbes.com, several successful entrepreneurs were asked how many hours per week they worked. Not one said less than 50, and the majority put in closer to 70 or 80 hours a week. While the latter may not be feasible if you’re already working a full-time job, the idea is the same. You have to love what you’re doing, and you must be willing to put in the time and effort to make it work.
When it comes to being a successful entrepreneur, you are the ideas. You are the passion, the vision, the energy and the desire to get things done and grow the business. If you don’t have the drive to be all those things, you’re better off not doing it at all. You’d have a better chance of making something work if you bought an existing business with a manager already in place.
I’m sorry, Temple. But in my mind, your idea—as it stands now—is a big disappointment just waiting to happen.
— Dave
Dear Dave,
What exactly is an executor, and what part do they play in someone’s will?
Gabe
Dear Gabe,
Simply put, an executor manages the last will and testament of someone who dies. Acting as an executor is an honor and a huge responsibility. As the designated representative of the deceased, executors are responsible for making sure the deceased’s assets are distributed according to the will. Executors deal with probate court, tell everyone who needs to know about the death, pay outstanding debt, distribute assets, and generally represent the deceased person whenever needed.
Think of someone you know who is trustworthy, conscientious and good at talking to people. This person also needs to be mature, capable of handling life events with a level head and have an honest heart. You need to think about where your potential executor lives, too, because they could end up spending a lot of time working with the courts in your area. If you already have someone in mind who has all the right personal qualities, but lives out of state, research your state’s requirements for an executor’s location. Virtual meetings could be a possibility.
The amount of time needed for an executor to handle your affairs when you’re gone could be enormous. Depending on the complexity of your estate, it could take months—or even years. Once you settle on someone as executor, be honest with them about all the responsibilities that come with the job. And if you’re unable to find someone appropriate, you can always hire a professional executor.
Great question!
— Dave