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  #1  
Old July 11th, 2012, 02:17 PM
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Dennis Lynch
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Money Matters

So the wife and I have a disagreement about where to get money. We are looking at opening a small business in the next year or 2. When the thought came up of needing more money than we expected (always the way), I said that I can tap into money I have been saving for retirement. It's not in an IRA or anything, it's just in funds. Anyway, she thinks I should sell the Defender for an extra 20k or so, rather than tap into the money that is already there.
I don't know if it matters, but I am 38 and have been saving since I was 24

So what's the right move. Either way, I won't be selling the Defender.

Thanks
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  #2  
Old July 11th, 2012, 02:25 PM
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Can you take a loan against the D-90?
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  #3  
Old July 11th, 2012, 02:30 PM
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Quote:
Originally Posted by lynchee View Post
she thinks I should sell the Defender for an extra 20k
What did she say when you then told her she should sell her engagement ring?

I feel like the D's always get the short end of the stick!
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Quote:
I am talking purely from an aesthetics standpoint.
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  #4  
Old July 11th, 2012, 02:38 PM
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Dennis Lynch
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Quote:
Originally Posted by rijosho View Post
What did she say when you then told her she should sell her engagement ring?

I feel like the D's always get the short end of the stick!
HA!!! She said she would sell it if we needed money.

Yes, I could take a loan against the D, or I have a VUL that I can take a loan against for a really low rate.
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  #5  
Old July 11th, 2012, 02:39 PM
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My friend owns the largest buy here pay here type dealership in East LA/City of Commerce and he told me that he borrowed money out of his home mortage (prolonging his payments really) to be able to buy more used cars for his lot that he just expanded. So far he's been making his payments and he says business is alright. Was better during the tax return season he said. If you don't mind me asking, what type of business venture are you considering?
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  #6  
Old July 11th, 2012, 02:53 PM
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Dennis Lynch
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Bar/restaurant. I've been in the business for 20 yrs and I finally want to open my own place. Really we are talking about just if we come up short, where will the money come from.
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  #7  
Old July 11th, 2012, 02:53 PM
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Everything depends on what type of business you are going to start or buy. If it is a home based business or something you and your wife are going to start and grow, use the cash you have in hand. If you are buying a business or a franchise, you need to assess your actual cash needs. If you have good credit, you can borrow money from the bank. If you need more cash, you can try and collect money from Friends and Family, before seeking Angel or VC investment.

When you plan your budgets, always over estimate the costs. You absolutely need to know your financial numbers. Too many people wing it, until they are out of cash.
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  #8  
Old July 11th, 2012, 03:13 PM
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Having just emerged from a bad situation into a medicore one... I say what woldd90 said x100.

I had a nice money making opportunity in 2006 that foundered in 2009. I used CCs to keep it afloat "temporarily"... until I torpedoed my finances. Decide your limit AND DO NOT go past it. Luckily I hung on to my day job...
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  #9  
Old July 11th, 2012, 03:40 PM
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Cut costs, you don't "need" more money.

D90 is not losing money. Interest sucks on investments, but is relatively high to borrow money.
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  #10  
Old July 11th, 2012, 03:49 PM
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If money was being saved for retirement, but remained liquid, try to maximize the retirement vehicles available (401k and company match, if applicable, or IRA or Roth IRA, depending on your AGI). Do that first for 2012. Not sure what options are available for prior years. Then determine the cash required to live (6 or 12 month, etc.) should there be an unexpected job loss. Try not to bring cash reserves below this point. Use the cash remaining (which was retirement savings) to invest into the new venture. If you own a home with positive equity and require additional capital for your venture, then consider a HELOC. Lots of advantages there. The very last thing to do is use credit cards to raise capital. The rates and payment terms are horrible and could start a cycle that many cannot recover from without filing for bankruptcy protection. If new venture plans doesn't go as anticipated, D-90s are relatively easy to liquidate in a financial emergency should you need a contingency plan.
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  #11  
Old July 11th, 2012, 03:52 PM
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Quote:
Originally Posted by lynchee View Post
Bar/restaurant. I've been in the business for 20 yrs and I finally want to open my own place. Really we are talking about just if we come up short, where will the money come from.
I'm not a management consultant, but $20k doesn't sound like it would go far if business started slowing down. I can imagine blowing through that in a slow month or two, depending on how big the business is.
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  #12  
Old July 11th, 2012, 04:02 PM
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sell the "d" you can always buy another. i am about to do the same thing with my defender. i dont need it and with 2 kids now.... i would rather have the "just in case money" you would rather have the "business money". if the business does great buy it back or find another one.

i know you did not want to hear it. sorry.
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  #13  
Old July 11th, 2012, 04:07 PM
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I tend to agree with Soronos, $20k will not go very far in that type of business. That's less than enough cash reserves for operations for a few months in a typical <$800,000 annual gross income restaurant.
Food service businesses have the highest failure rates and require the most effort on the part of the Principals. Make sure you take advantage of any SBA-backed financing from local lending sources before you start dipping into your "rainy day" fund.

I'm in the valuation/consulting business (CRE), and have seen every echelon of food service business in my travels. I have no clue how the back of the house works, but have a good handle on the operating ratios if you ever have a question from an operation perspective. in particular, occupancy costs and demand modeling. I know that has little to do with you question, but it has everything to do with setting yourself up to get other funding sources and having a solid business model.

Another successful restaurantuer I know once told me "make sure you get divorced BEFORE you open a restaurant because god-forbid that its actually successful, she'll end up getting half of all your efforts after you end up getting caught in the coat room with the 21-yo hostess". I may be paraphrasing, but you get what I'm saying. It's a grind of an industry for the married for sure.

------ Follow up post added July 11th, 2012 04:13 PM ------

Quote:
Originally Posted by d90boy View Post
sell the "d" you can always buy another. i am about to do the same thing with my defender. i dont need it and with 2 kids now.... i would rather have the "just in case money" you would rather have the "business money". if the business does great buy it back or find another one.

i know you did not want to hear it. sorry.

LOL!
you could have guessed Keith would say that!
When you make your first business milestone in the business, you can go see Copley and he'll set you up with a sweet, low-mile D-90.

I agree that you shouldn't get too emotionally attached to cars/things, but sadly liquidating a D-90 isn't going to ensure your success if you run into money issues.
-Home equity line of credit (HELOC);
-Promotional Credit Cards with 0% interest or 2% interest;

Not the best market to sell a car/toy, but money remains very cheap to borrow. So unless you have sketchy credit you should take advantage and lever up!
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  #14  
Old July 11th, 2012, 04:41 PM
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hey he does not have to buy another one from me...... but if the ideas / thoughts / passion is there to start a business he would think and hope for it to succeed - a toy or two can go away for cash. it seems more logical than to take a loan.

but that is just me as a human being not a car salesman. =)
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  #15  
Old July 11th, 2012, 05:04 PM
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Quote:
Originally Posted by d90boy View Post
hey he does not have to buy another one from me...... but if the ideas / thoughts / passion is there to start a business he would think and hope for it to succeed - a toy or two can go away for cash. it seems more logical than to take a loan.

but that is just me as a human being not a car salesman. =)
I would definitely sell the truck, that $20k could be the difference between failing and succeding.
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  #16  
Old July 11th, 2012, 06:07 PM
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If you take a loan on the truck and business fails you lose the truck and your credit record.
Sell it.
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  #17  
Old July 11th, 2012, 09:00 PM
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You've already hired an accountant and done cash flow projections right?

Cart / horse ... important to have them in the right order.

The SBA have a very useful spreadsheet for cash flow projections...oh and check in with your local small business development center.
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  #18  
Old July 11th, 2012, 09:07 PM
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Sell the truck, and keep contributing to your savings. After the last 3 years of this wonderful economic shit storm, I would love to have my savings back. You can always buy another D-90. But it is damn hard to build up your life savings after it has been wiped out.
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  #19  
Old July 11th, 2012, 09:42 PM
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Dennis Lynch
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Thanks for all the input guys, lots of good points. You're right, 20k won't get you far in a restaurant. That number came up because I said that if we NEEDED money, I could sell the D.
Anyway, I'll hopefully revive the thread in a few years telling you guys how successful the place is.

Thanks again
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  #20  
Old July 12th, 2012, 12:07 AM
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Originally Posted by JSBriggs View Post
Keep us updated as it progresses. As long as it isn't one of those cupcake shops, I'm interested to see what you have in mind.

-Jeff
see thats not fair everyone loves cupcakes....you just crushed my dream!....seriously though those things are everywhere in Texas!
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