Author Topic: How scared are you for us? New and struggling.  (Read 4333 times)

libbyonthelabel

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How scared are you for us? New and struggling.
« on: September 04, 2018, 08:32:06 AM »
Short story: just graduated with a master's degree in a STEM field, gainfully employed with a federal agency doing a job I love. Husband is self-employed and struggling and we have debt:

$7,000 in CC debt, $1,700 is taxes from husband's business for 2017.
$88,000 in student loan debt - will pay $35,000 - $50,000 over ten years, then balance will be forgiven (PSLF)
$7,000 car loan (2014 Nissan Versa Note, manual transmission - bought after riding bike home in 115 + degree heat, puking in the bushes and passing out for a minute. No regrets - biked everywhere for the last 8 years! Also own a 95 Toyota Tacoma, free and clear.)
$113,000 left on $119,000 mortgage, estimated home value at least $150,000 and projected to increase 7% in next year in our neighborhood.

My income is $51,000 now and will tap out around $90,000, probably reach $80,000 5-6 years from now. My husband makes maybe $12,000 a year gross, but typically all in one or two months. We have not managed his income well, or managed our spending in response to his change in income (hence credit card debt).

My goal is to pay off the CC debt in the next year, which will require drastic cutbacks in our spending. After that, snowball the heck out of the car payment, and then the mortgage. If I scraped together every available nickel for the next ten years I could probably manage to pay off the student loan debt in that amount of time, so I think counting on the PSLF is the best option, and putting that money into the mortgage makes more sense. Meanwhile I'm putting 5% of my pre-tax income into a thrift savings plan, which is the maximum amount my employer will match.

I'm starting with the basics - control spending, maximize debt emergency payments....am I missing anything? Should I be more hopeful? Or more depressed? I plan to give my husband one more year of self-employment with full support before I begin to suggest he go back to work for someone else - his gross income was about $40,000 before he quit. He is extremely skilled at his work and would love it if we could buy houses he could remodel and then we could rent or resell, but I have a hard time wrapping my head around how we could make that happen when we currently can barely make it through a month without using a CC....I intend to fix that but in the meantime that plan seems years away and if he went back to work we would be SO much better off. Is anyone here doing that though? Is it working?

FWIW we are childfree by choice and will absolutely stay that way (snipped & tied and just no), so we have no childcare or education expenses to worry about.


Cranky

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Re: How scared are you for us? New and struggling.
« Reply #1 on: September 04, 2018, 08:45:30 AM »
I think you need to lay out your expenses, either as a case study or at least to yourself, and see what you can cut. Definitely pay off the cc loan, and at the same time set aside whatever your dh needs for taxes in January. That shouldn't be on the cc, ever. Then tackle the car loan.

I presume you have an emergency fund? If not, that's important.

The only thing that jumps out at me is that you've got a house and that makes it darned hard to either move for work, or just cut back and save on housing costs. Otherwise, I'd say like in the cheapest 1 bedroom apartment you can find until you're in better shape financially.

Good luck!

MDM

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Re: How scared are you for us? New and struggling.
« Reply #2 on: September 04, 2018, 09:14:53 AM »
I think you need to lay out your expenses, either as a case study or at least to yourself....
+1

E.g., if you can handle food, clothing, property and state tax, insurance, and entertainment for ~$22,000 over the next year you could
- pay off the CC debt
- be on track to pay off the SL in 10 years and the car in 3 years
- contribute the 5% to your 401k
- contribute $2K to husband's tIRA
all without dipping into savings.

After the first year, your annual spending could go up to $29,000 for the food, etc., due to no more CC payments (other than monthly to pay in full whatever you charged).

At least, that's what I get from a quick pass through the case study spreadsheet.  What do you think?

OtherJen

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Re: How scared are you for us? New and struggling.
« Reply #3 on: September 04, 2018, 09:15:43 AM »
I think you need to lay out your expenses, either as a case study or at least to yourself, and see what you can cut. Definitely pay off the cc loan, and at the same time set aside whatever your dh needs for taxes in January. That shouldn't be on the cc, ever. Then tackle the car loan.

I presume you have an emergency fund? If not, that's important.

The only thing that jumps out at me is that you've got a house and that makes it darned hard to either move for work, or just cut back and save on housing costs. Otherwise, I'd say like in the cheapest 1 bedroom apartment you can find until you're in better shape financially.

Good luck!

Yes. As someone whoís been self-employed as a freelancer for 6 years and who paid federal, state, and self-FICA taxes on a 1099 grad student stipend for 5 years before that, one of the best pieces of advice I can give to another sole proprietor is to automatically take 30-35% of any untaxed income and set it aside in an account designated for taxes. You may end up with cash leftover when you make your estimated quarterly payments, but thatís far, far better than being short. Itís also a nice buffer if a better-than-expected year bumps you into the next tax bracket.

Otherwise, itís difficult to make other suggestions without knowing where the rest of the money is going each month.
« Last Edit: September 04, 2018, 09:28:50 AM by OtherJen »

lhamo

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Re: How scared are you for us? New and struggling.
« Reply #4 on: September 04, 2018, 09:25:28 AM »
Congrats on landing a full time job with a decent salary/benefits!

Since your DH's income is bunched in a couple of months, is this something he could do as a side gig to supplement another PT or even FT job that brings in a more stable income?  Even something like using your gas-efficient car to drive for Lyft or deliver pizzas, or substitute teaching during the school year, or working catering gigs.  It would not be too difficult to wipe out the CC and car loan debts with that kind of temporary/intermittent side gig work in a year.  I would consider starting this NOW rather than waiting a year.  Even $100/week would get you well on the way to paying off one of those shorter-term debts.  But yes, you guys need to be setting aside money to pay the taxes on his income -- all of them, including the self-employment taxes -- and ideally making those payments quarterly this year so that you don't get behind again.

Once you wipe out that shorter-term debt, if you are pretty sure you will stay in the PSLF program, then yes, pay the minimums but do build up a big enough savings cushion so that you could pay the loans off sooner if you decide to leave fed/non-profit employment.

Once you have that savings cushion built up, then you can attack the mortgage if it makes sense.  Bump retirement savings (for both of you) up to the tax advantaged max before paying extra on the mortgage, though.

Agree that a case study posting your budget details would be helpful.  Your mortgage is small so it is difficult for me to see how paying off 7k in cc debt is such a challenge that requires major spending cuts -- you should be able to do that with your DH's minimal income (less taxes) alone. 

solon

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Re: How scared are you for us? New and struggling.
« Reply #5 on: September 04, 2018, 09:41:30 AM »
I'm not scared for you at all, in fact I'm extremely optimistic for you. The only problem I see in you is you think too small. Think BIG!

You're making $63,000 a year right now. It doesn't matter if you get raises or if your husband's business takes off or if he goes back to W2 employment. You have all you need right now.

I don't want you to "snowball the heck out of your car payment". I want you to pay it off by Christmas. Why wouldn't you? $1750 per month for four months and you're there.

I don't want you to spread student loan payments over 10 years, and get the rest forgiven. I want you to pay off the entire $88,000 in 3 years. You'll be completely done with it and never have to think about it again. Yes, you can.

Yes, you have to stop spending on the credit card. Put it in your underwear drawer and don't look at it again until your credit card debt is gone. But that won't take long.

You are very, very close to buying rental property. In 10 years (the amount of time you want to speard out debt repayment), you could have 5 rental houses.

Do the math, think bigger. You got this.

doggyfizzle

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Re: How scared are you for us? New and struggling.
« Reply #6 on: September 04, 2018, 09:44:38 AM »
Does your Federal agency offer student loan repayment assistance?  Mine does, and while I haven't used it, I've heard good things about it from my co-workers.  It might be worth checking with your supervisor to see if it is available to you.  While the pay-outs are taxable, and are based on the value of your outstanding loans, I'd consider these a better deal than PSLF since you can knock the loans out far quicker.

I'd suggest trying to compromise with your husband until your debt situation is knocked-out: have him work a W-2 job and make the $44k until the CC/SL debt is gone, and then he can go back to self-employment.  3 years of him at his old salary plus your GS-10 or 11 (based on salary) earnings will knock all the CC/SL debt if you really focus hard.

Also, ramp up for TSP contributions; max it if you can.  I know it seems daunting with the SL debt, but your 20s are the best possible period of time for socking away as much as possible in a tax deferred account - every year in the future is one fewer year of compounding before you reach penalty-free age of 55 or 59.5.

Also, if you and your husband are healthy, look into the FEHB HDHP/HSA plans during the upcoming open season this year:  GEHA and Aetna have good plans that kick between $1,500-$1,800 into an HSA for you, and you can plop a total of ~$6k into the account, further dropping your AGI (and Federal tax burden basically to zero).

Retire-Canada

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Re: How scared are you for us? New and struggling.
« Reply #7 on: September 04, 2018, 10:28:47 AM »
I plan to give my husband one more year of self-employment with full support before I begin to suggest he go back to work for someone else - his gross income was about $40,000 before he quit.

How long has he been working on this business? What is it? Unless there is some amazing potential there that's realistic to achieve rapidly he should go back to work. $12K/yr is not a worthwhile amount for someone who is healthy and could contribute more.

Laura33

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Re: How scared are you for us? New and struggling.
« Reply #8 on: September 04, 2018, 10:56:15 AM »
Yes, please do a case study, because we need to know the rates on the various debts.

I agree wholeheartedly with your first step:  ratchet back on the spending and get the CCs paid off ASAP.  I have been in that variable-income world, and the only way it works is if you set your budget -- including debt payoff and savings -- around the steady salary.  Anything your DH makes is a bonus that you can use for extras -- extra money to the debt, extra savings, the occasional extra date night, etc.

I would tweak your plan in one small way:  set aside a small emergency fund, maybe $1-2K -- think of it more as a month-to-month "float" fund.  When you are trying to break the CC habit, you don't want to need to resort back to the CCs because you had an unexpected car repair or something, so give yourself enough room in your bank account to cover that before the next paycheck arrives.

As part of your efforts to restrain your spending, start tracking what you spend -- you may find You Need a Budget useful, as it makes you think and plan a month ahead (so that once you are up and running, you will always have the money in the account for next month's expenses before they hit.  There are two reasons you need to do this:  first, because I guarantee you are frittering away money on stuff you don't even remember; and second, because most people get in trouble because of the "surprise" expenses, like car repairs or new tires or a medical bill or a roof leak or whatever.  The thing is, almost all of those surprises aren't really surprises; I mean, if you have a car, you know it's going to need tires and maintenance, right?  You just don't know when.  So you need to be accounting for those expenses now and saving up for them as part of your normal monthly budget -- I have heard people call it a "sinking fund" for those sorts of things.  But to do that properly, you have to remember all of those kinds of things and then figure out what is the right amount.  Ergo, you need data.  Start tracking now, and by the time you have your CCs paid off, you will have compiled at least some of the information you need to plan those contributions into your budget. 

Once you have the CCs paid off, what you should do next depends on your remaining interest rates.  If you have low interest rates, you will be far, far, far better off long-term if you just pay the minimums on those debts and throw as much as you can at your 401(k) and IRAs for you and your DH.  The reason for this is that the first dollar you invest is the most valuable dollar you will ever invest -- a dollar in the market today is worth more than a dollar tomorrow, which is worth more than a dollar the day after that, and so on -- because of the power of compounding.  My favorite example:  assume you had $10K to invest today and you put it in the market and got 7% returns on average.  The rule of 72 says that your money will double every decade.  So if you are 25 today, then at 35 you'd have $20K, at 45 $40K, at 55 $80K, and at 65 $160K -- all from that one initial investment.  But what if you spend the first ten years paying off all your other debts, and didn't start investing until 35?  At 65, you'd have only $80K -- same amount invested, same investments, but you end up with half the money, because you missed a full doubling.

Now, obviously, it's not that clean, because you would save some interest by paying the debts down earlier -- but that is why we need to know the interest rates.  If you have a car loan at 7-8%, of course you want to pay that down first, because that provides a guaranteed return of 7-8%, and the market may not do that well, after taxes and costs, over that period.  OTOH, if you have a 0-1% car loan, or like me a mortgage under 3%, then you are much, much more likely to be better off in the end if you put your spare money in the market and just pay the minimums on that debt.  The reality is that current interest rates are still very near their all-time low, so if you have debt in the 0-4% range, I would be very hesitant to pay it faster than you need to. 

For more detail and more specifics, see the Investment Order sticky (which I'm sure someone else will link to).  It's really hard to go wrong following that.

Finally, I agree with Solon:  you are making $63K a year right out of school!!  With a totally reasonable mortgage at what I bet is a pretty damn low interest rate!  And you're eligible for PSLF!  You are in a great position just as you are right now, even if your DH never works for pay again.  You just need to adjust your expectations about the kind of lifestyle you can afford on that very reasonable income.

FIRE 20/20

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Re: How scared are you for us? New and struggling.
« Reply #9 on: September 04, 2018, 06:06:51 PM »
Short story: just graduated with a master's degree in a STEM field, gainfully employed with a federal agency doing a job I love.
...
My income is $51,000 now and will tap out around $90,000, probably reach $80,000 5-6 years from now.

I only skimmed the comments so far, but I don't see anything on this topic.  With a Master's degree in a STEM field, are you getting paid what you're worth?  Obviously not all STEM fields are the same and depending on where you are, you may be adequately compensated.  However if your degree is in something like math, physics, electrical engineering, or computer science (just to name a few) your income seems pretty low.  A few years ago my company was hiring people with those degrees at 60k in a low to medium cost of living area, and salaries have gone up steadily since then.

And just to reiterate what's been said many times already - do a full case study if you want the best responses.

AccidentalMiser

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Re: How scared are you for us? New and struggling.
« Reply #10 on: September 04, 2018, 07:04:01 PM »
Since @Laura33 has weighed in, you've gotten the best free advice on the forum already. 

Having re-read your initial post, I didn't see exactly what your husband's business entails.   Does he have a marketing plan and a business plan?  I'm guessing not.  Is he working hard or just kind of coasting along?  I'm not trying to bust on him (or you) but a business that grosses 12k per year isn't much of a business.

If you are both committed to his business, I'd recommend a trip to the local small business development center (google it) and get hooked up with a business plan writing class and a mentor.  Businesses are good for one thing only and that's to make money. 

If you were debt free and making 100k per year, then more slack would be warranted.  At this point, I think he needs to dig in and pitch in.  Either the biz gets serious or he goes back to 40k plus benefits.

That's what I would advise.

lhamo

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Re: How scared are you for us? New and struggling.
« Reply #11 on: September 04, 2018, 07:27:58 PM »
So what kind of contracting does he do, exactly?  Residential remodeling?  Here in the booming (but maybe on the way to bust) Seattle market, any contractor who does half decent work for not outrageous prices is booked up several months out.  The really good ones are raking in the cash with no gaps in jobs other than the ones they want/need from time to time.  There is no real need to market -- people are so desperate to get someone they will call anybody who has even the slightest possible positive referral from friends, family, neighbors, friends of friends, random people they meet on the street, etc.  If you are in a similarly hot real estate market then if he can't make a renovation business FT and extremely profitable he is either not doing good work/getting good word of mouth referrals or he doesn't know how to bid his jobs properly and is losing money by underbidding time/materials.

Laura33

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Re: How scared are you for us? New and struggling.
« Reply #12 on: September 05, 2018, 06:57:24 AM »
He's a contractor and an extremely skilled one - just hasn't been able to advertise because all his business income has gone to our expenses.

Excellent motivation to get your expenses in order then, right??  The best dollar you can spend is the dollar that makes you many more dollars.  Using his dollars to pay for consumption is just shooting yourself in the foot.  Given that your CC debt is at 0% interest, it may make sense to take some of the money you would throw at your debt and throw it at your DH's business instead for a few months; more work for him means not only more income for you guys but more positive referrals for him that may lead to even more work.  Compounding works in other ways than just money.  ;-)

If it were me, I wouldn't push him to get a regular job just yet -- this isn't a situation where you need his income just to put food on the table, you know?  But do push him to get himself out there and make connections and go to meet-ups and set up his own website and do whatever he can to build his business.  His business needs to be his full-time job:  if he doesn't have 40 hrs a week of paying work, he should be spending 40 hrs a week trying to get more work! 

J Boogie

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Re: How scared are you for us? New and struggling.
« Reply #13 on: September 05, 2018, 08:20:11 AM »
Is he trying to build relationships with GCs, or does he try to work directly with homeowners who act as their own GC?

If he only does cabinets, it's a tough road trying to find the only homeowners that are acting as their own GC. It sounds like he needs to partner up - otherwise he's missing out on a lot of good business and will have to spend a lot of his time doing tasks that are not cabinetmaking. And it sounds like he enjoys building cabinets and not so much the other tasks associated.

Does he post on instagram?

There are many contractors, carpenters and cabinetmakers that get tons of business through instagram.

TRG home concepts, Zack Dettmore, Devol Kitchens, Hambuilt, check these accounts out. You post a few decent (definitely don't have to be pro) pics with some commentary and some hashtags and if your work is solid then you'll get a lot of attention.

It's also a fun way to share with your peers, and might be able to help him find some local contractors to partner with.




Retire-Canada

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Re: How scared are you for us? New and struggling.
« Reply #14 on: September 05, 2018, 08:26:55 AM »
You can be great at a technical task and unable or unwilling to successfully run a business. The problem with the later is it's a totally different skill set than the technical work that the person is great at. But, to have a thriving small one man business he has to embrace both sides of that equation.
« Last Edit: September 05, 2018, 01:33:40 PM by Retire-Canada »

Papa bear

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Re: How scared are you for us? New and struggling.
« Reply #15 on: September 05, 2018, 08:38:25 AM »
Where are you located? I'm sure there are plenty MMM members around that could refer business.  There are a lot of us in diy remodel work, flips, etc.


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lhamo

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Re: How scared are you for us? New and struggling.
« Reply #16 on: September 05, 2018, 10:41:38 AM »
Sounds to me like he needs to get established as a sub to some high-end remodeling/building general contractors.  He would have to give them a percentage of his profits, but if he can come in with a bid of 60k to the other company's 80, both of them will still make a decent amount on the job.

patchyfacialhair

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Re: How scared are you for us? New and struggling.
« Reply #17 on: September 05, 2018, 11:42:44 AM »
He needs to learn how to bid correctly:

Cost of materials plus a little for remnants.
Cost of wear and tear on his tools.
An appropriate hourly wage for himself as the labor component.
Something for his overhead and business expenses.

He's running a business, meaning that the goal of said business is to make money. There's a reason that the big shop bid out 80k. They're accounting for all of that plus a premium for the name recognition.

MDM

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Re: How scared are you for us? New and struggling.
« Reply #18 on: September 05, 2018, 11:59:37 AM »
FWIW he is a cabinetmaker, so he isn't licensed to do structural work.
Does he know the interior designers in your area?  More importantly, do they know him?

He might put     interior designs    into Google (and/or try similar search terms) and see what that shows for local businesses that do the design work for a new kitchen, etc., but then need someone to turn the design into reality.

Laura33

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Re: How scared are you for us? New and struggling.
« Reply #19 on: September 05, 2018, 01:32:16 PM »
Ugh -- looks like the system hung when I tried to post, so it disappeared into the ether.  Trying again:

Does he post on instagram?

And Facebook.  I know a lot of local businesses that rely on Facebook and Instagram for advertising.

I agree with Retire-Canada:  there is a huge difference between the skills/knowledge needed to run a successful business and those needed to do the actual work.  Honestly, it sounds to me like you "get" the need to hustle given your experience, and he never really learned that because of his very different experience.  Add to that that he doesn't even know what to do to build the "business" aspect of things, and that is a recipe for paralysis, ostriching, and depression.

Can you help him find free resources to learn the business end a little better?  E.g., does your small business organization offer classes on using social media to advertise (i.e., basically free)?  Or networking opportunities, or mentoring relationships?  What about a local community college?  Sometimes they have cheap, practical classes.  Etc.  Help him brainstorm his way out of the paralysis and point him toward resources he can use to learn what he needs to know. 

MDM

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Re: How scared are you for us? New and struggling.
« Reply #20 on: September 05, 2018, 05:40:04 PM »
...an architect who was also working in the building loved what he did and asked for his card - he didn't have one on him and never followed up, because he was busy at the time.
Better late than never.

kei te pai

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Re: How scared are you for us? New and struggling.
« Reply #21 on: September 06, 2018, 02:56:01 AM »
In the short term, to boost the finances along, could you rent out a room in your house? Depending on where you live this may be a relatively easy addition to your income.

libbyonthelabel

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Re: How scared are you for us? New and struggling.
« Reply #22 on: September 06, 2018, 07:40:02 AM »
In theory we could but our house is actually quite small - 2 bed 1 bath. I also struggle with severe insomnia and manage in part by excluding all living things from my own room at night, which means we are using the 2 bedrooms already.  The drop in my quality of life if I stop sleeping isn't worth an extra $450 a month.

We are looking into how his skills with wood and my budding skills with metal could be turned into a fun and creative side hustle though.

Milizard

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Re: How scared are you for us? New and struggling.
« Reply #23 on: September 06, 2018, 07:57:04 AM »
I think that you need to focus on growing your DH's main business first. Get back in touch with that architect,  and give him a card, build some Facebook and Instagram pages, and spread them around your network.  Contact some GC's, and show them his work.

My BIL makes those decorative wooden signs for home interiors, aka words as art on old looking lumber. He sells them at some craft shows, but I seriously doubt he's making much profit off it. How can you possibly compete against automation/Chinese wages on that?

DoNorth

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Re: How scared are you for us? New and struggling.
« Reply #24 on: September 06, 2018, 11:15:43 AM »
after you get the debt under control, consider setting up a solo 401k for your husband's freelance business.  I did one for my wife a few years back and deferring that income saves a lot in federal/state taxes since you're most likely filing jointly.  Vanguard makes it really easy.


libbyonthelabel

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Re: How scared are you for us? New and struggling.
« Reply #25 on: September 08, 2018, 08:10:39 AM »
Definitely a solo 401k - that's on my radar for him. With potentially only 20 years in my own retirement account that would make a huge difference for us. Otherwise he probably can never retire, although he loves making furniture and doing joinery the old-fashion way so not a huge deal for him. But arthritis is already starting up in his hands so it would suck to have to count on that.

« Last Edit: September 08, 2018, 01:28:40 PM by libbyonthelabel »

Retire-Canada

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Re: How scared are you for us? New and struggling.
« Reply #26 on: September 08, 2018, 08:52:54 AM »
If your husband is going to pursue his business you need to sit down and agree to some performance metrics - mainly net profit at firm milestones like 6months, 18months, 12, months, etc... Base them off what he could reasonably make at a job including the value of any benefits from the job. If he can't hit those milestones with his business he needs to go back to working for someone else. This gives him the opportunity to be successful at his business, but also acknowledges that not earning at his full potential is a sacrifice for the family's financial health that cannot go on indefinitely.

Just as an example if you guys want to retire in 20yrs and he could have saved/invested an extra $20K/year for say 4 years working instead of pursuing his business. At 7% return after inflation over that period you guys would have an extra $281,110.00 in your portfolio when you retired. So every dollar you save/invest now [or don't save] will make a pretty huge impact on your future.
« Last Edit: September 08, 2018, 08:56:06 AM by Retire-Canada »

BicycleB

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Re: How scared are you for us? New and struggling.
« Reply #27 on: September 08, 2018, 10:09:48 AM »
He maintains/remodels our house and does more than 50% of the cleaning - I'm content being the main cash earner given his contributions to our life in other ways. His happiness and self-value have sky-rocketed since working for himself too and that counts, though intangibly. The truth is, when he does have work, he makes about five times as much as he could in a shop. We just need to work together to develop that more - if he worked fulltime for himself he would make about $200,000 a year. There is potential there, we just both need to focus on developing it. I think this has helped me see that I need to help him with that.

If!

But it doesn't count until it's done. To answer your question, I am fairly scared.

(Entertaining source of the "if" quote: https://en.wikipedia.org/wiki/Laconic_phrase ... "Uses", "a prominent example")

I think you're finding a useful focus, Libbyonthelabel. What is needed is joint action to the point where his business makes serious money.

Looking ahead, it would be easy to work your joint behinds off for a year, build a flow of work, and be caught off guard when the work stops because a recession comes. Please ensure that as workflow grows, clients put down enough money so that you are not caught with unpaid material costs in the event that someone stiffs you and the jobs stop coming. Make hay while the sun shines. 

Anyway, good luck turning his skills into a real business. As other posters have pointed out, skill and a business are two different things. A business requires a much broader skill set. It appears that acquiring that skill set will be the biggest thing you two can do.

It wouldn't surprise me if a case study would show that you can save on your current income. This is MMM after all. You should CERTAINLY do that as well. Neither of you should be satisfied until your current spending is less than the means provided by your one job. But I recommend moving aggressively on both the income and spending sides of the FI equation.

Since your position is professional with long term benefits, his business should be the main area of focus for income improvement. Lots of improvement.

PS. As a person experienced with cases of incompletely applied talent, I am hesitant regarding your case. The shift from unrealized potential to success is not automatic. It may take some personal struggle, but you guys need to actually do this.

Remember we're in a boom now... you need to not just be ok right now, you need to move ahead, so you're strong enough to handle a recession. Build serious savings in an accessible format. If time permits after the cabinet business gets strong, expand your business knowledge to whole house rehab, but study it as a business and don't do that side until there are serious recession bargains. Just as a cabinetry business is a broader activity than cabinetry, buying property and either selling or renting it out is much broader than a cabinetry business; you need to learn the business part before you do it.

I've had friends who were specialized in high end construction, including cabinetry. Their experience suggests it's a boom and bust business. It's a bad sign to be in a personal "bust" during the boom time. Good luck and push like hell. Hubby needs to join you in full time effort until you two as a financial unit are in  a strong position for a sustained period of time.
« Last Edit: September 08, 2018, 11:01:57 AM by BicycleB »

Retire-Canada

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Re: How scared are you for us? New and struggling.
« Reply #28 on: September 08, 2018, 10:36:27 AM »
I hear you, and to some extent agree, but how many housewives knitting caps to sell on Etsy for about $3.00 per hour of their time are told to "get back to work"?

A being a house wife is a job so that $3/hr is on top of the value of the job. If he's being a house husband, looking after kids at home, doing all the chores, etc... and his business is just an occasional side-gig than $12K/yr is a reasonable extra income on top of the house husband role. OTOH if the alternative to his business is him working a FT job that brings in significant regular income to the family that's what you should be comparing it to not Etsy.

Of course you can decide him being happy making a low income in his business is worth it to the family. I'm just pointing out the metrics I would use to evaluate the opportunity cost of that decision.

I do contract work and I enjoy that a lot more than being an employee, but if I couldn't earn enough to as a contractor to match the value I'd generate as an employee I'd suck it up and get a "normal" job. It's not like one option is paradise and the other option is a Soviet era gulag. That said I would do my damndest to find a way to generate the income as a contractor to avoid the job.
« Last Edit: September 08, 2018, 10:40:07 AM by Retire-Canada »

lhamo

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Re: How scared are you for us? New and struggling.
« Reply #29 on: September 08, 2018, 08:46:23 PM »
Quote
It's not like one option is paradise and the other option is a Soviet era gulag. That said I would do my damndest to find a way to generate the income as a contractor to avoid the job.
Ha! As would he. I get your point - and we actually had a talk about maybe he should pick up work with a shop when he doesn't have a job lined up. He went out and found three small jobs the next day that will earn as much as three weeks worth of shop work! Use the prod that works I guess...

And ABSOLUTELY we can minimize our spending at the same time. Don't punch me in the face but our grocery spending alone comes in around or even over $1,000 a month. Granted we're no-carb (doctor's orders), so the cheap stuff is off the table, but still. That's just reckless and scary. And on me, as the purchaser-of-groceries.

When we get our spending under control (happening now) and he makes $30,000 a year (2019 goal) we'll be sitting very pretty in 20 years. Just have to work on those two things to make that happen!

Thanks for all your input folks, this has been extremely helpful.

You can easily cut that by $500/month or more.  Lots of threads on meal planning/grocery optimization that you can read/post on for suggestions.  Also see the various Costco threads if you have one in your area -- Costco is a great source for healthy proteins.

You can also provide more details here about your specific dietary needs and I'm sure people will have suggestions.