Dave Says

Wednesday, January 30, 2008 at 1:33am

Dear Dave,

I’ve got the opportunity to take over my father’s small engine shop. He’s semi-retired and doesn’t make a lot with it, but he’s got about $10,000 to $20,000 in inventory already stocked. He might even just turn it over to me, but I’d have to expand it to really make a living. How can I do this and avoid going into debt?

— Mark

Dear Mark,

Let’s be realistic. If you were going to start this business from the ground up you could make almost as much with it. And if that were the case you could just buy your inventory as needed, right?

In this situation you’re looking at having to buy inventory in advance that you may not have bought in the first place. In essence, you’d be buying a business that’s struggling.

You might try making an arrangement with your dad based on the inventory sold instead of buying it all outright in the beginning. Maybe you could structure it to where you’d buy the first $10,000 of inventory that leaves the shelves from him.

That way you don’t have to worry about financing the business and running into debt, because you’re buying it gradually.

Good luck, Mark!

— Dave

Dear Dave,

What’s the minimum age at which you recommend buying life insurance? I’m 27 years old and married, no kids and we’re doing pretty well with our debt-reduction. Currently, we only have $10,000 in debt remaining and this includes some student loans and a mortgage.

— Sheldon

Dear Sheldon,

Your wife’s current lifestyle is dependent on your income, so you definitely want to look into getting some life insurance at this point. After all, you want her to be well taken care of financially if something happens to you.

The need may not be quite as pressing as if you had children, but it would be bad if you died prematurely and she found herself saddled with a bunch of debt on top of losing you. Grief plus financial hardship is a recipe for disaster!

At your age, good, level term life insurance is not very expensive. If you’re healthy, you can get around $400,000 in coverage for $25 or $30 a month.

You’ve got responsibilities to think about, Sheldon!

— Dave

Dear Dave,

My grandson is nine years old. I’m afraid I spoiled him in the past, because if he wanted something all he’d do is ask and I’d give it to him. I’ve decided I need to change this behavior, but I’m not sure how to start. I especially want to teach him some responsibility where money is concerned.

— Lisa

Dear Lisa,

If I were you I’d sit him down and let him know you’d made a mistake in handling some things. At his age, he’s old enough to understand this. But it’s not going to be painless – for either of you – because he’s been cruising along getting pretty much whatever he wants up to this point.

Let him know lovingly, but firmly, that the mistake you made was spoiling him and that the world doesn’t work that way. Explain to him that you love him very much, and that you’re not doing it to be mean, but you’re doing it because you want him to grow up to be a responsible adult and have a wonderful life.

Don’t be too hard on yourself, Lisa. We’re all guilty of this kind of thing when it comes to kids and grandkids. Believe me, I’ve got kids who don’t hear the word “no” often enough, and when one of them does hear it they always get this strange look on their faces like they don’t understand English.

But “no” can be a good word. Lots of times it’ll keep people out of trouble!

— Dave

For more financial advice plus special offers to our readers, please visit www.davesays.org or call 1-88-22-PEACE.

Filed under: City Business
Tagged:
By: HokeyPokey on 12/31/69 at 7:00

Dave, stop ... Stop, will you? Stop, Dave ... Will you stop, Dave ... Stop, Dave. I'm afraid ... I'm afraid ... I'm afraid, Dave ... Dave ... my mind is going ... I can feel it ... I can feel it ... My mind is going ... There is no question about it. I can feel it ... I can feel it ... I can feel it ... I'm a ... fraid ...

By: WickedTribe on 12/31/69 at 7:00

I love these people who ask questions. If you're 27 years old and already have your house practically paid off ($10,000 total debt "including mortgage"), why would you be asking anyone questions? If you had your finances together that well or were making that much money, you wouldn't need to be asking anyone any financial advise.

By: Blanketnazi2 on 12/31/69 at 7:00

That's exactly what I thought, Wicked! Unless they inherited the house....

By: TharonChandler on 12/31/69 at 7:00

Dear Mark, I could tell ya a sad story about "family business" as was, for me, at juxtaposition to corrupt politics. If I were going to be involved with any such business I'd endeavor to be sure that "I'd Own it