Should I make husband a partner in my new business?
Dear Dave,
I?ve started my own business, and the grand opening is Saturday. I?ve done everything so far on a cash-only basis, and my husband has been a huge help along the way. I?m wondering if would be a good idea to officially make him a partner in the business.
? Beverly
Dear Beverly,
I?m really proud of the way you?ve done this without going into debt and the fact you two have been working together to make it happen. Now you have a great situation where you own the business instead of the business owning you.
But no, I wouldn?t make him my partner in this deal. A partnership is probably one of the worst forms of business ownership, especially if the partner is your spouse. It doesn?t accomplish anything, and if things go wrong you?re both standing there liable. If you?re in the type of business where you have some liability and you?re afraid someone might try to come after your personal stuff I?d look into the possibility of a Sub S Corporation.
You guys have done a fabulous job, Beverly. Grow slow and keep up the good work!
? Dave
Dear Dave,
We financed our home on a 30-year mortgage because we couldn?t afford the payments on a 15-year note. Even with this, we?re having trouble saving any money, paying our other debts and keeping up the house payment. Should we move and sell the house?
? Larry
Dear Larry,
First of all, if you couldn?t afford the house on a 15-year mortgage, then you couldn?t afford the house. Period. If you?re rolling along and you can?t get out of debt because you?re house payment is so big it?s strangling you, you?re what we call ?house poor.? This usually happens when your house payment is more than 30-35 percent of your take-home pay. That?s why I recommend your mortgage payment is no more than about 25 percent of this figure.
But of all the things I tell me people to sell or get rid of, the house is almost always the last. Having to give up your home is very draining ? financially, spiritually and emotionally. Hold onto your home as long as you can.
Let?s try living on really tight budget for the next six months. Give every dollar a name and spend everything on paper before the start of the month. You may have to cut out cable television and put vacations on hold for a while, too. Then, take a really close look and see if you?re getting out of debt and into savings. If not, then you may have to look at putting that house on the market.
? Dave