Posted by Canadian Dream on May 21, 2009
Should everyone try be an entrepreneur at least once? I know most kids at least try a ice tea/ lemonade stand once during their childhood, but should everyone try running a small business as an adult at least part time?
The reason this idea came to my head was thinking about my wife the other day. To be honest I wouldn’t expect her to be good at running a business, but other than the odd accounting question or tax issue she does do a great job running her daycare. She has also learned a lot from running the daycare.
As I’m setting up my publishing business I’ve been thinking about how many different skills you use have to use to set up a business and run it. Then there is all the little things you learn while doing it. Actually after watching my wife do her business for a few years I’ve got a much deeper appreciation how difficult it can been to keep a business up and running.
In general the following are some skills you learn:
- Crisis Management: It’s a miracle if something doesn’t go wrong at some point with a business that is a minor crisis.
- Client Relationships: Learning that fine balance between being friendly, but firm when you need to be.
- Accounting & Tax: Having a clue on how to keep the books and do your taxes or even paying someone else to is usually a educational experience.
- Cash Flow: So far I’m avoiding spending money I don’t need to to avoid the classic trap of a crappy cash flow which can kill off a business rather quickly.
- Time Management: You can’t be everyone at once. So you pick what you can do and when.
Overall these skills I think make just about anyone a bit better of an employee and certainly help you when you get to a management position. So in general I feel a lot of people could benefit from trying their hand at a small business, but I’m not convinced everyone should do it. Some people just don’t seem to have the drive to keep a business going for long or they don’t think out the idea all that much.
What’s your thought? Should everyone try their hand at a small business?
Posted by Canadian Dream on May 20, 2009
First off let’s clear up something, Payback: Debt and the Shadow Side of Wealth by Margaret Atwood is not a personal finance book. Rather it’s a book-sized essay on the nature of debt.
So even though I was expecting something a bit different I gave Margaret the benefit of a doubt and keep reading. So for the first four chapters I read her rambling points in the hope that she would get to some excellent conclusion or insight that would make up for my stolen time in the early parts of the book.
The last chapter was called Payback and I was brutally disappointed. She spends the first four chapters discussing financial debt mostly, with the odd side part into personal debts. Then in the last chapter she goes onto this long-winded rant on our debt to the environment and the debt we collective owe it.
To say the book disappointed me is an understatement. I found it a long winded, poorly thought out book that failed to really provide me one insight into the nature of debt that I didn’t already know. Actually well reading the book I realized many of her themes she brings up in relation to debt is already covered well in a movie called Fight Club.
At least Fight Club is entertaining to learn that without a record there is no debt. Hence the plan to blow up the credit card office buildings, because if they can’t prove you own it, you don’t have to pay. In addition the movie does a damn good job of bring up the concept of your shadow self, which Margaret goes on and on over and yet doesn’t really make an good point with.
Overall the book sucked so badly I would suggest you avoid reading it. Watch Flight Club instead and you would have learned more.
Posted by Canadian Dream on May 19, 2009
So I was recently talking with my banks about renewing my mortgage which comes up for renewal at the end of summer. After a bit of back and forth I’ve got the following offers on the table:
- Variable Rate: Prime +0.8% (3.05%), Closed, Five Year
- Fixed Rate: 3.75%, Closed, Five Year
My first thought was to go for a variable rate mortgage if I could get a cheap rate, but the banks aren’t moving on that rate. I asked can you do better than the posted rate and the answer was no. My credit isn’t a problem either, my one banker was commenting how ‘excellent’ it was.
So then I began to think about that small spread between the two rates, 0.7%, and wondered what are the odds the prime rate will go up over the next five years. Fairly damn good in my mind. With all this stimulus out there the government is going to have to watch for inflation like a hawk after we hit a recovery. I would be surprised if rates did not go up at least three times over the next five years. Then I started to look at some of the fine print. If I go fixed I can switch to the new rate now rather than wait a few months to renew. So that would save me about three hundred in interest costs.
The additional cost to go with the fixed rate is $945/year based on my current balance. So it would cost more up front, but depending on rates over the next five years I could come out ahead. I can’t know until after the five years is up which is going to be cheaper.
In the end I asked my wife her thoughts. She pointed out a fixed rate would make planning a bit easier for a few years and said her preference is for a fixed. She liked knowing what the rate is going to be.
I agreed with her points and decided to go with the fixed rate. In the end I like the concept of some certainty over the next five years and I’m willing to pay for it. It’s partly an emotional decision and I’m ok with that.
So how about you? What would you choose and why?
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Filed Under: Debt
