– Why should you have a financial partner? –
In Part2 of my alternative sources of income series I discuss the different type of financial partner you may have along the way. Some people would rather do everything alone and remain in full control of their project. However, there are plenty of advantages of having a financial partner to share this adventure with. Today, I am explaining the different reasons why you may seek for a partner in order to create an alternative source of income.
Lack of time
You must not forget that your goal is to create an alternative source of income and not to replace your existing one. Therefore, you might run out of time once in a while. Having a partner will smoother the transition between the time you use to take watching TV and the time that you will now take to work on making more money. The fact that somebody works with you will still allow you some TV time in your schedule 😉
Lack of resources
This is particularly true if your alternative source of income requires an amount of money to start with. It is the case if you are buying a small stores or a rental property. You can borrow most of what it required but banks will still request that you show some liquidity. A financial partner could be of a great help when it comes down to get approved for a loan.
Lack of knowledge
This is one of the reasons why I decided to go into a partnership with one of my friend. I don’t have much coding knowledge and don’t quite understand how the whole web works. However, I can blog and I can promote our websites. My friend and I have a lot of qualities that are complementary and we definitely have much more chance of being successful together than by ourselves.
Lack of motivation
Creating more income while you work, take care of your family and have a social life is quite a challenge. It is very possible that you want to slack off or even quit. However, if you are working with somebody else, chances are that you will not be discouraged at the same time and you will be able to support each other.
Lack of creativity
The human mind is a beautiful thing. Human minds put together become a machine with infinite possibilities. Challenging each other has been the most productive exercise my friend and I have ever did. It forces us to go to the source of each problem and find more than one solution.
It is obvious that there are not only good sides of having a financial partner. However, I strongly believe that the advantages compensate for the few rock blocks you may encounter.
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Regardless how many projects I have on the run, there is one thing that takes most of my mind right now: The Montreal Canadiens will make the playoff! Even better, they have really good chances of finishing 1st of their division. Not so bad for a team that most people (including me) thought they would not even make it for the 8th place. This is another proof that you should not let people tell you what you can or cannot achieve.
I once read that people tell you that something is impossible for two reasons: #1 they just don’t understand what you are doing. #2 They don’t know how to do it. The bottom line is to give it a try, regardless what people think (who’s going to be successful at the end of the day anyway, right?).
Nothing is keeping me away of buying a new car! I wrote a few months ago that I was considering buying a 4X4 since the dealership was offering 0% financing over 60 months. This winter, we received so much snow that we might have some left in MAY! I got stuck in the snow a few time, my car starts rusting and… I read this morning that, due to our strong dollar, the prices have fallen by another 6% since last fall. Life is made of choices…
Now I have to go… MBA weekend!
Now I have to go… MBA weekend!
Carnival of Personal Finance #145 at Million Dollar Journey.
– Jim Cramer Controversy Over Bear Sterns by Where does all my money go.
– An Engineer’s View of Retirement by Canadian Dream.
– Is Your Mortgage is Tax Deductible? at Plan your escape.
Life is ironic. A few months ago in my MBA class (while I was still thinking that my employer was paying my MBA), we were discussing how managers often compensate for the lack of vision of their HR department. I was quite surprise to hear that from a HR teacher (I guess there is still some honesty in this world!). Managers are basically the last line of defence when it comes down to an employee’s loyalty. Well mine just made a home run with my case!
They will finally pay for my MBA!
After two months of “negotiation at the top”, the decision came down to me as an approval (seriously? Could it end-up in another way?). In fact, the HR department still refused to pay for it but my region decided that I was worth it. So they decided to take it from their own budget and not ask the Head Office for any support.
This was one of the best shot they did this year
I tend to be a very loyal employee. I stayed four years and a half at my previous department and I left simply because I needed to learn something new (I would have stayed if not). I would never threat my employer of leaving if I’m not happy.
In management, I believe that action needs to be done with the information you have on hand and with what you believe people deserve. Therefore, making decisions according to threats are never sincere since they are based on fear instead of goodwill.
This is why I didn’t say anything bad nor had any reactions to the fact that my MBA was refused. However, it was clear in my mind that I would leave within a year. I simply can’t work for someone who doesn’t believe in my. Call me naive; I still think that integrity and honesty have their place in the finance world. No need to say that I hold my manager in high esteem.
I also know what it means
Nobody told me nor ask me for anything in return (beside the fact that I have to pass my tests 😉 ), but I am not that stupid. I know that my case was approved because of what I did in the past and what they expect me to do in the future. Fortunately for me, I like challenges and I am always aiming the top.
In the end, it’s a real win-win situation. I have my MBA paid and they will get a fully motivated and (hopefully) performing employee in their team.
– Who Is Your Best Financial Partner? –
In my quest to find $1,500 per month, I spoke with a lot of people in order to find out about innovative ways to create cash flow, company ideas and how to save money. At the end of this kind of discussion, several individuals will say something like:
“we should start a business together someday”. There are two things to be careful about this line: the word “together” and the word “someday”. Today I want to speak more about the “together”, I’ll leave the “someday” for another post.
So you want to start a project but you are thinking it would be easier if you would have someone on your side to work with you. Working as a team could result into a great source of motivation and generate more ideas. But in order to be productive, you need to choose a good financial partner. Here are your choices;
Those are individuals with resources (cash, knowledge, assets) who are looking for ideas or people to manage a project. They could be a friend of a friend or simply someone you met at your latest Happy Hour. You obviously have to be careful with this kind of partnership as they are some people living off the back of naive people.
If you want to go ahead with an unknown investor, I strongly suggest that you create a corporation and that you sign a contract. If you start on clear and solid basis, you will avoid a ton of problems in the future.
This is where I decided to look for when I wanted to start something. Friends could become really good financial partner as you know them; you know how they work and how they think. Therefore, there is less chance for surprises.
Communication is the key if you want to make sure to not jeopardize your friendship. If both of you constantly make sure that the other one is happy with how the project is managed, you should go a long way.
I personally tried to do business with family members and it failed every time. The good thing is that each project failed before it even started. We just couldn’t agree on the plan.
I cannot really point out what was the source of the disagreement but the one thing I was sure of is that I didn’t want to start on the wrong foot.
Yep, in my internet project, I have two really important financial partner; my friend with whom we work together and my wife that supports me. More than that, she is a great source of motivation and comprehension.
In the day-to-day life, she is my major support. When you decide that you want to create a side project, it requires time, effort and energy. If your spouse is not on your side, you will never achieve anything.
I personally think that everything starts with a good financial partner and then, you can start designing your project.
image source : jazzadog
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– Establishing The Possibilities –
Two young kids, a MBA and a new job don’t seem to be enough. In fact, creating chaos in my environment is probably my favourite sport! However, in order to keep a minimum level of stability, I can always count on my wife to bring me back to earth and to encourage me in my 10,000 projectsJ. We currently both work on our $1,500 project in order give her the option of staying home and taking care of our children.
While becoming more Frugal and restructuring our finance did certainly help (we saved $400 overall even with the addition of the housecleaning lady), we will need to create alternative sources of income in order to compensate for her salary. So this is where I am; trying to figure out the best way to create a durable and substantial source of income.
As I (hope) just created an alternative source of income that should bring more money every month, I thought I would go back on the process I went through before coming out with something that works. Over the next weeks, I will post about the different steps of creating an alternative source of income.
#1 Establish the possibilities
Ok, so you want to make more money? So do I! In fact, everybody wants to make more than they are right now. This thought led me to two conclusions:
– It isn’t going to be easy as if it was, everybody would do it. People that are making money did not always have it easy. Ask Mr. Trump who when bankrupt before becoming the billionaire he is today.
– It will require extra energy, work and effort on everybody’s part. We often forget that it is not only about you doing more work, but also about the whole family doing different sacrifices.
Based on this premise, I started to think about what could be done from my brain and my resources. The key point was to start from something I know (or partially know). Keep in mind that you still have to go to your day job and do everything else. If you go ahead with something you need to learn, this will require even more effort, time and energy. You are the only judge to know if you are capable of something or not.
I was deceived by the result of my personal research. I realized that there was not much I could do that would actually create money:
Building a portfolio giving high dividend and interest income would not be a problem if I had the money to build it! In order to make significant cash (over $100 a month), you need more than a few thousands of dollar!
I thought of that too. My parents are pros to find deals and they just love to renovate properties. The problem, again, is that I don’t have sufficient cash down to buy one. I need at the very least 10% cash down and even then, I didn’t find any properties where the revenues were higher than the mortgage payment.
What I like
This is where I find a way to create a source of income; I am passionate about finance and I can’t live without my laptop… An internet company:-D I don’t expect to make the full $1,500 from my blog (even thought some people do it!) but, I decided to combine my effort with my best friend, who is a computer wiz, in order to create several sites that would generate income on a monthly basis.
In conclusion, I would say that internet was my own personal solution. However, there are million of new business possibilities that you can find according to what you like and what you are good at. Don’t think it is that easy, in part 2, I will explain who to choose a partner.
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