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Archive for December, 2012

Are Entrepreneurs Made or Born?

My daughter started making jewelry for family members as a hobby this summer.  Before I knew it, she had opened an Etsy store and started tracking her expenses and revenue on a spreadsheet.  She made some changes to her store and tracked the resulting increase in views.  She has been researching what makes for a successful store and getting ideas off the internet.  She has been involved in social networking and posting pictures on Instagram for her over 3000 followers.

She has done this all on her own and really seems to be doing relatively well without input from anyone.  She made 2 sales in November and already has 2 in December with a goal for making another four.  She has been on college break for the past week and has been adding to her inventory for sale.  And despite the fact that her expenses for supplies have exceeded her revenue, she is optimistic that she will make a profit since she has enough stock to make a lot more jewelry.

Which all begs the question — Are Entrepreneurs Made or Born?

Honestly, I don’t really have the answer.  I am sure that there are many entrepreneurs that come by their skills naturally while others have been able to learn and refine their skills through intentional development and education.

I do know that she has watched me purchase rental houses throughout the years, and I have explained a lot about economics, building businesses, expenses, revenues, profits and losses on long drives in the car.  I have also explained the concept of inflation, supply, and demand.  So do these discussions have a role or is the fact that I am interested in these topics mean that there is some genetic component.  I really don’t know.  I suspect there might be a little contribution from both.

What I do know is that all the mental gymnastics and planning don’t mean a thing until you actually get out and do something.  I also know that virtually every successful entrepreneur has multiple failures and struggles in the early years that we seem to forget when looking at their successes.

Needless to say, I am really proud of her getting out their and doing and learning on the go rather than sitting back and just thinking about doing it.

So if you want to check out Kayla’s Etsy store, you can do so.  Plus, if you order something type in GRAND as a coupon code when checking out and you can get free shipping.

What are your thoughts about entrepreneurship?  Do you think it runs in families?  Is there more of a genetic component or environmental influence at work?  Do you know of any good studies?

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10 comments - What do you think?  Posted by Cash Flow Mantra - December 21, 2012 at 9:15 am

Categories: Earning   Tags: , , , , , , ,

The Check is in the Mail!

Those words always seem to bring up negative feelings and connotations when I hear them as if someone hasn’t really sent you the money that they owe and are simply buying time to keep you from hassling them.  I had a renter who was real good at saying those words.  Interestingly enough, the postmark was always a day or three later from our initial conversation.  Needless to say, I wasn’t too disappointed when he moved out.

New Emotions

But now those words are taking on a different meaning for me.  I am saying them myself and am actually pleased to be saying, “The check is in the mail.”  That’s because I am the one sending the check.  And the recipient is the IRS.

This morning I was able to make out the last check payable to the United States Treasury that I will have to write for the tax years of 2010 and 2011.  From now on, I am planning on being caught up and putting this ugly chapter of my financial life behind me.  I am not quite ready to discuss how I got myself 6 figures in the hole, but it wasn’t pretty.  However, I can say that I have learned from my mistake and continue to learn daily.

I ended up having to cash out my retirement accounts from a previous employer (I still have a newer account).  My accountant sent in the money for the taxes and the penalty and deductions this year should have kept up with any tax liability for 2012, so I am hoping that I will never have to owe that much in my life again.

Even though the check was quite large, I had a big smile on my face and feel much relief.  Now it is time to tackle some other debts and see what I can get done over the next few years.  Paying off debt should free up some funds in the budget and allow me to make some positive progress in net worth even if I am not investing a lot in assets.  Instead I will be paying off liabilities and increasing my cash flow and net worth from that side of the equation.

Tracking My Progress

I plan on starting a new blog to help track my progress and bring some public accountability to my actions.  I ordered the domain name this evening and am having Andrea from Nuts and Bolts Media help out with getting the site looking good along with all the other mundane things that I figured out I don’t want to do.  I would much rather write.  Not that I am the greatest writer, but I enjoy it so much more.

Once the site is up (hopefully by 2013), I plan on making a post or two per week.  I can explain some more about my goals for debt reduction over the next few years and you can follow my progress if you wish.  I am looking forward to it, especially the part about paying off debt.  By knocking out the IRS debt and a few others, my monthly expenses are less than my income on paper at least.

And thus ends four years of contacting the IRS and spending hours on hold and getting transferred from department to department to explain myself and keep the hounds at bay.  Just think of all the extra time I will have.

Readers:  Ever been in debt to the IRS?

On a more pleasant note….

Carnivals

Here are some of the carnivals in the past few weeks that have included some of my content:

Lifestyle Carnival #31    – CFM, GPM, PT
Money Mail Carnival #5 – GPM, PT
Carnival of Money Pros – PT
Carnival of Financial Camaraderie #59 – PT
Yakezie Carnival – CFM
Carnival of Financial Camaraderie #59 – PT
Carnival of Retirement #49 – CFM
Money Mail Carnival #6 – GPM, PT

 

 

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4 comments - What do you think?  Posted by Cash Flow Mantra - December 13, 2012 at 11:32 pm

Categories: Credit/Debt, Taxes   Tags: , , , , ,

Hoping the Rental House Refinancing Works Out

A little while ago I mentioned that I was looking into refinancing some of my rental property.  I figured that interest rates had gotten so low it was worth looking into and seeing what might happen.  I think there is only one way for rates to go and that is up.  Well, life got in the way and I had to get some other things done first as I am sure that most of you know.  But now, I have been able to begin looking into the refi again.

It turns out that the mortgage guy at the bank left so I am with a new guy.  I have only spoken with him on the phone, but I think I like him better.  He is fairly responsive, and I think we can get this done.

The Numbers

I made myself a spreadsheet at the end of October with the data from all 6 of my rental houses.  One is the place we used to live in before moving 12 years ago.  We have a second mortgage on it so there is not a lot of equity.  But the other 5 are the ones that I will be able to refinance.  I figured that while I was decreasing the interest rate, I would also look into decreasing the term.

Currently, my rates run from 6.38% to 7% with remaining terms of 21 to 23 years.  I had him look at 20 year and 15 year numbers, and I am liking what I see.

For the 20 year term, the interest rate would be 4.25% and I would have to bring just over $13,000 to closing.  The payments would decline by about $948 per month.  It would take about 14 months to break even and get my cash back.

For the 15 year term, the interest rate would be 3.125% and I would have to bring $10,500 to closing with payments being reduced by $659 per month.  It would take me 16 months to get the cash expense back.  But I would save 5 full years of payments at the back end compared to the 20 year mortgage.  And I will definitely save a bundle compared to my current situation.

The savings could be used to pay some of my other debts which I am working aggressively to get under control.  Right now, that seems like the best use of cash right now.  I would prefer not to bring that much cash to closing, but consider the return on investment, and it is a great deal.  If over the first year, I save $7908 in cash on my $10,500 investment now, my cash on cash return is just over 75%.  Who wouldn’t take that kind of return on investment?  So it makes abundant sense to get this thing done.

Which is why I hoping the refinancing on the rental houses all works out.

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Be the first to comment - What do you think?  Posted by Cash Flow Mantra - December 7, 2012 at 2:00 pm

Categories: Credit/Debt   Tags: , , , , , ,

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