4 Ways to Fund Your New Business

There are plenty of ways to get on the path to early retirement, but by far one of the best ones is to start your own business.  If you have the right idea that fills a need, you can have the pleasure of doing what you love while securing your financial future.

PF-laptop-1_1392700aOften the stumbling block is finding the funding for your business.  If you have a great idea but don’t have the money, here are some tips:

Go slowly.  No one says you have to quit your day job and jump right into the new business.  Why not start slowly, on the side, and make sure the business really can be profitable?  Once you’re sure that it is a worthwhile idea and you’re able to make money from it, then take the leap to pursuing it full-time.

This option also gives you time to save your money and fund your business on an as needed basis.  Of course, if your business idea takes off, you may need a quick infusion of cash.  Then, try one of the following options:

Take out a bank loan.  If you just need a modest amount of money to fund your business, try to find out about unsecured loans.  An unsecured loan won’t require collateral, and you usually have a limited time to pay it back.  This type of loan may give your business a boost without allowing you to go too far in debt.  You can begin the search to  find the best bank loan for you by searching the Internet.

Borrow from friends or family.  This arrangement can be risky, so only use it as a last resort.  Your friends and family may be able to loan you money and may be completely supportive of your business. . .or, they could be controlling and domineering and try to control you and your business.  Only you know which situation applies, but if it is the latter, proceed with caution.

Take out a peer to peer lending loan.  Peer to peer lending is becoming more and more popular.  You can state your reason for wanting a loan and wait for others to fund your idea.  The potential problem here is that the interest rate may be higher than what you would pay if you took out a bank loan.

Starting and running your own business can be the key to a successful early retirement.  If you need some financial assistance in the beginning, there are plenty of options available.

How Does Bankruptcy Work?

Bankruptcy may be the only solution if you find yourself piled debt with no way out. Since it is a tedious process with very serious and real consequences, understanding how bankruptcy works before following through is necessary. Also, not all debt can be cleared and filing bankruptcy will have an effect on your credit for a very very long time.

thebankruptcyTypes of bankruptcy

There are many types of bankruptcy. Some are designed for businesses (Chapter 11) while others are for individuals (Chapter 7, 13). Chapter 7 bankruptcy is called liquidation bankruptcy. When you file for this type of bankruptcy any unsecured debts are erased. Chapter 13 bankruptcy works differently as it allows you to recognize your debts by creating a repayment plan with lenders. When you file a Chapter 13 bankruptcy you are able to keep the things that you own so this option can be better for some individuals.

Who can claim bankruptcy?

Filing for chapter 7 or chapter 13 bankruptcy depends on a lot of factors. A chapter 7 bankruptcy can be filed by individuals and businesses and only be filed if your income is not enough to repay your debts on a payment plan. Chapter 13 bankruptcy can only be filed by individuals and be claimed if you have less than $383K in unsecured debt or less than 1.1MM in secured debt.

What happens to the debts?

Chapter 7: Most unsecured debts are eliminated and any assets that you have are sold. Assets such as clothing and cars are usually exempt from repossession. Any secured debts you have (ie: car loan or mortgage) can be exchanged for the item that is used to secure the loan or you can arrange a repayment plan.

Chapter 13: You will work with your creditors to set up a payment plan that states how much you will pay and how long it will take to pay your debts back.

And then what happens?

Bankruptcy does not provide you with a clean state even though is can help you get your finances back on track. The bankruptcy will stay on record for up to 10 years and will make getting any new credit extremely difficult. A personal financial management course is also mandatory to teach you the skills you need to manage your money.

What are my other options?
Debt consolidation is a good option for people who find themselves in a great deal of debt. There are counselors and companies that you can go to which can help you consolidate your debts. You can also work on a repayment plan with creditors on your own, saving you from having to file bankruptcy. Bankruptcy is not a quick fix and while it may help you, it’s not always the best option. In the long run it will hurt your credit for a very long time and make it near impossible to get any new credit for years.

Should Kids Have Debit Cards?

Today’s parents often wonder if the decision to give their kids a debit card is a wise one or a foolish one. Can having a debit card teach your kids to handle money responsibly or will it cause them to spend their money too easily? Teaching your kids to be financially responsible as they get older is so important and as a parent it is your duty to educate them, not only through words, but also through your own example.

teenager-prepaid-debit-card-300x199Make The Rules

There should always be a groundwork when giving your kids a debit card. they need to understand hoe the card works, fees that may be associated with it and where the money comes from. It is important to let them know that the use will be monitored and that there are expectations that surround the trust that you are ensuring them with by giving them a debit card.

Set a Limit

Debit card limits are important for everyone. Having a set dollar amount that can be spent daily/monthly is important not only to protect from fraudulent purchases and withdraws, but to also keep spending in check. They need to make wise purchases and learn how to budget their money. As parents it’s important to help them with these decisions and to make budgets.

Be Open to Conversation

It’s important to have an open line of communication with your child regarding their debit card use. This communication pathway should go both ways so that you and your kid can openly discuss any concerns about spending habits and limitations. For example, if kids are spending much more quickly than they should be it’s important to look together at where the money went – what was it spent on? How could it have been spent more wisely? Conversely, if they are not spending the limit let them know how great they are doing and that you are proud of them.


Five Things you should Never Carry in your Wallet

Carrying a wallet with all your important identification documents and spending accounts might seem like a good way to ensure that you have everything with you when you need it and that it’s all in one place. But what would you do if you lost your wallet, or, even worse, if it was stolen? If someone were to obtain your wallet would there be enough information in there to steal your identity or spend an exorbitant amount of money? Here are 5 things that you should never carry in your wallet or purse that could not only save you the hassle of dealing with fraudulent spending but also help you get all your missing documentation back easily.

698567-old-leather-wallet-full-of-credit-cardsYour Social Security Card: According to identify theft experts, losing your social security card or anything with your social security number on it is incredibly dangerous. Make sure that your wallet is free of this information and keep your SSN private.

Cheques: Cheques are easy to forge and just one single cheque could leave your bank account empty. Even if you have a filled out cheque in your wallet you could be putting yourself at risk. Cheques contain account and routing numbers, with which transfers could be made. It’s best to only carry a cheque when it is absolutely necessary.

Your Passport: There is honestly no good reason to carry a passport in your wallet. If your wallet were to get stolen or go missing having a piece of government issued ID handy will make the hassle of getting everything back so so much easier. On top of this, if the wrong person were to get their hands on your passport they could use it to travel in your name, get a copy of your social security card or even open bank accounts.

Your Birth Certificate: A birth certificate isn’t the best tool for an identity thief, but they could be used along side other forms of ID. Having your birth certificate will also make it easier to replace any lost or stolen wallet items.

Multiple Credit Cards: Having multiple credit cards in your wallet leaves a thief with more credit to spend, and you with more cards to cancel if you find your wallet missing. Carrying just one card is a much safer idea. It’s also a good idea to have the cancellation numbers for all your credit cards handy just in case you need them