3 years ago, when I told my wife I was starting a personal financial blog, she didn’t have much of a reaction. In fact, since I always have 2-3 projects on the go, she wasn’t surprised. I was (and still) write my posts in the bus so she barely noticed that I had a new project.

During the first 6 months, not much happened at The Financial Blogger. In fact, I wasn’t getting more than 100 visits per month. So, my wife started wondering why I kept writing with “virtually” no purpose.

However, during the summer of 2007, the blog started to pick up and I was getting more and more visits each month. After a while, my friend and I decided to team our efforts and our sites and start a Web Company in March 2008.

At that point, I was starting to spend more time but the results weren’t there. The first month our company was created, we made about $500. So $250 each for all those articles written, all this time spent on the computer. Let’s just say that my wife wasn’t super impressed. On top of that, I was also doing my MBA at the same time. So she wasn’t too happy that I was spending additional time on another project.

For a while, we were not making much (below $1,000 per month) considering our efforts. So my wife started to get annoyed since I was talking about my company almost daily. In fact, there was not much to say about it because it was still a small sideline at that time. However, I was passionate about it and I was able to see the huge potential beyond those few hundred bucks we were making back then.

When we had our first annual meeting over Christmas 2008, she started to think it was nice to go out once a year and we were not really paying for our trip. The massage was much more relaxing and the food just tasted better since it was “free”.

Then, at the beginning of 2009, I started to receive cheques. It wasn’t “virtual” wire transfers from an unknown account. She was surprised to see my first cheque coming in the mail and especially so when she noticed it wasn’t a cheque for $35… but more like a cheque for hundreds of dollars. She smiled but still was thinking I was putting too much effort for such limited results.

However, month after month, I was receiving more cheques, and receiving more money through wire transfers. She started to get curious about it and was more interested to hear me talk about what we had done and what is on the horizon.

This summer was a major turning point for many reasons. My wife quit her job back in May, we made a major site purchase in July and I had started a four day work schedule back in September. It has been 2 months that I have concentrated a full day per week on my sites on top of my “regular” hours and we are now seeing that it is starting to pay off.

My wife is now all excited when she goes to the mailbox and gets the cheques for our company. And she is even more excited when she realizes that I am slowly making enough money to compensate for her salary loss. This means that she can continue to go to school and take care of our children.

During the past 3 years, I have really appreciated my wife’s scepticism about the project. It was an additional motivator to prove to her that I was able to succeed and actually earn a decent income through my laptop.

So if your spouse wants to start something, I don’t think you have to support him/her with all your might, but you should definitely let him go and challenge him to see how far he is willing to go with his new adventure. Without the support/challenge from my wife, I don’t think I would have been able to achieve what I have done so far.

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When I was a teenager, my dad had a great job and was making a very good income. We were not rich, but we didn’t have to worry too much about money. In fact, my dad never worried much about money his whole life… he still doesn’t . Way back when, he lost his lucrative contract just before the Holidays (Merry Christmas!). While he was making a lot of money, he also spent most of it. Easy come, easy go they say. Then, when he lost his contract, he didn’t have much to live on. He didn’t know what to do either. Therefore, he went bankrupt only a couple of months after this sad event. We lost our house, our cars… and I lost my summer job too since I worked for him! My dad is a smart man, but at that time, he didn’t have a plan B. And he paid dearly for this oversight.

What is a plan B?

Since we just hit another recession, most people saw a family member, a friend, a neighbour, a spouse that had lost a job. It got people thinking about what they would do if it ever happened to them. When I talk about a plan B, I am not talking about an emergency fund. Money won’t solve all problems if you don’t have a job, it will only buy time. This is exactly what happened to my father; he had some money put aside, enough to cover 3 months of income. But during that period, he couldn’t find another job and had to bring back the keys to our home.

A “plan B” is way bigger than having an emergency fund. It covers topics such as:

- Money –

Obviously, the first thing is to answer the following question: “where do I get money from if it’s not from a pay cheque”. Before you do anything, you must know where to get at least a few weeks of income in order to activate your plan B. It can be from an emergency fund (invested in a savings account or money market fund), from a line of credit or withdraw from a registered investment (this would trigger tax implications while affecting your retirement plan).

- Spending –

If times are rough, you must be able to identify what to cut out of your discretionary expenses in your budget. We all have our little “sins” that siphon money from our bank account on a regular basis. I personally spend a lot on food and restaurants. I just love it! However, it is important to know where you can cut back so you can act immediately and become “more frugal”. While cutting on restaurants, clothing or your favourite morning latte, consider also cutting down on other expenses. You might be able to decrease your mortgage payment (if you have a line of credit, only interest payments are required) or save on other spending (daycare, gas, it may be a good time to look at your insurance premiums ).

- Making Money –

Having a few bucks set aside is good. Spending less is better. But the real problem that must be solved by your plan B is how to make money again! And applying for 30 jobs a week is not what I call a plan B. It would not be sufficient in a recession, especially if your field of expertise has being seriously affected (these days talk to anybody working in the automobile industry…).

In order to start making money rapidly, there are a few things you can do on a steady basis:

- Continuing education. This is one of the main reasons why I did an MBA. It wasn’t to get a promotion but to improve my employability. This piece of paper can open several doors in different fields. It may not lead to my dream job, but when you don’t have one, any job is a dream job . A degree can also improve your employability with your current employer as well. Key people are rarely laid off in the first wave.

- Maintaining a great network. The more people who know you, the more chances you have to find another good job quickly. Most choice positions are being filled by word-of-mouth. You just have to make sure that you are part of those conversations . Sites like Facebook and Linkedin are definitely useful and you should remain somewhat active to ensure you remain connected.

- Having a sideline. No matter what you are good at, you should use your talent, your passion to generate a small income on the side. It is this income that may become your primary source of money during tough times. Thanks to the internet, most people are able to have an online store and generate a few bucks from home these days.

While thinking about your plan B, you will probably optimize your personal finance and might find a few bucks to save here and there. In the end, your Plan B on making money might even become your plan A over time!

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The world is filled with opportunities. In fact, the world is also filled with people and great ideas to seize these same opportunities. This is how fortunes have been made through the ages. Unfortunately, the world is also filled with people who seem to do everything possible to slow your progress; we call them commercial bankers How many times did you hear someone saying: “I had the perfect business idea but that guy with a tie didn’t want to lend me the money. What does he know about my business anyway?”.

This is the classic point of view of many an entrepreneur at the beginning. They are filled with passion, motivation and ideas… but they don’t have a buck to pay for coffee. Based on the fact that 9 of 10 companies close within the first 5 years of their existence, commercial account managers have a tough job; saying “no” to many entrepreneurs… especially when the business owners don’t have any collateral to offer for the loan! Commercial loans are often approved on the long-term viability of the project and the people involved in the startup. If the project is not yet born, your chance of obtaining financing decreases significantly. However, if you show up at the appointment with a business plan, you may convince your bank to give you a chance. Reading a few business plan books wouldn’t hurt .

In the meantime, I have outlined a few indications on where to start a simple plan. These key points need to be answered no matter how big is your company. However, you may want to pursue your research by buying a business plan book.

#1 What is your company

It is important that you explain what you will do with your company and what is its mission. Your business plan should include answers to questions such as: How do you attract clients? Manufacture products? Deliver services? How are you going to make a profit?

#2 Who is the founder?

A crucial point when we lend to a new company is to know the people behind it. What is their experience? Do they know what they are doing? Is he financially solvent? Do they have to quit jobs to start the company? Can they live with a small salary at first?

#3 What is your product / service

This is basically where you explain your business model. Which kind of products/services will you offer and how will it be provided. Will you need suppliers? Will you have to pay them right away or in 30, 60, 90 days? What is your expected profit margin? How do you calculate it?

#4 Who will be your clients

Commercial lending is based on trust. This is why your bank wants to see your business plan and know who has been identified as your clients. If you can define your niche, you will probably be able to target them efficiently and your chances of closing sales are higher. This is why the bank wants to know about your clients. They also want to know if your niche is big enough to support your lifestyle considering a decent closing rate, competition, economic situation, etc. Is the market you are aiming for expanding or shrinking? Business plan books often use the Porter model to define the business environment along with the definition of different markets.

#5 Crucial question: How much do you need, why and can you endorse the loan?

Asking for commercial financing, even after reading business plan books and making your own business plan, is a tough game. You need to be able to demonstrate why you need the money you are requesting and how you can pay it back. This is why, no matter how great your plan is, your bank will most likely request that you guarantee the loan personally and / or provide collateral.

If you are serious about your project and want to learn more about it, I suggest the following books:

image source: Christopher Chan

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While several individuals are losing their job and the economy still takes its sweet time to start up, there are a bunch of people looking for a solution in order to keep their lifestyle and their house. Since employers lay off people many of us think that the best solution is to start their business and become their own employer.

However, no matter what is the business you are looking for, chances are that you will require financing to make it grow. Actually, it is pretty rare to find a business idea that requires less than 10K to start (unless you go online and you have all the required competencies ). Therefore, at one point or another, you will have to sit down in front of your banker to (beg) ask for financing.

The problem is that since your company doesn’t exist yet, you won’t have much to show. The very first step is to build a financial plan before your meeting. While I will write a full post about writing a business plan, your document should include the following:

- History of the member of the company (business background, experience and expertise in the field of your new business).

- Mission/Vision along with a description of the company you are creating.

- Which kind of client you will be looking for.

- How will you provide your products/services

- Number of employees.

- Marketing plan.

- Budget to start the company.

- Projected income and expenses for the following 3 years.

Once you have explained your business plan for 30 minutes, don’t be surprised to get personal question about your background and your experience in this field. Your banker will probably take a personal balance sheet and consider your personal debts as well. Why are they doing this since you apply for your company? Because the company doesn’t really exist for them. It’s only a legal identification for tax purposes at this point

Therefore, most banks will take a look at your financial obligations and assets. If you keep your day job or if you have enough liquidity to survive for at least 6 months, they will feel much more comfortable lending you money to start your project.

The idea behind this is they don’t want to be the only one taking the risk. They want to make sure you invest more than your time and expertise. They want to see you investing money in your company before they open their wallet.

Therefore, you first applications will be based on your personal financial profile. They will determine if the people behind the company number are reliable businessmen.

Depending on the amount requested, they also might require that you endorse your own company. In fact, if your company go bankrupt and you didn’t personally sign for anything, the bank won’t be able to request you the money they lent. So for most start-up, they ask for personal and tangible security (your property or investment for example). This is far from being optimal on a personal point of view as you want to separate your personal assets from the company. Unfortunately, at first, you will have to combine your resources to make sure you have sufficient funds to accomplish your business plan…

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Just by writing this title, I get all excited! On August 31^st, this will be my first week without a Wednesday at the bank! I finally found a way to stay (happy) at the bank

A few months ago, I asked for a raise thinking I wasn’t paid enough. Unfortunately, I failed in my negotiation and I actually went on the “free agent market” for about 2 weeks. The good news is that I received several offers. The bad news is that I had to pay back my MBA and my financial planner exam to my employer if I ever leave now (this is a 3 years contract). While I knew about it when I signed for the MBA, I didn’t figure I wanted to leave I was absolutely convinced in getting a great raise.

Life being what it is, I had to find another solution. Knowing me, I would have wrote the darn cheque and leave after a few month just because I was really upset. I’m having a hard time when I don’t get what I want

Working 4 days drops your income, so what’s the point?

Right. By working 4 days a week, I have to drop my income by 20%. Therefore, I am not getting anywhere close to a viable economic situation at home (my wife will go back to school this fall so she won’t be working at all for the next upcoming years). A financial planner heading toward the route of bankruptcy… quite original This is probably what some people say when the see me go… but I have a plan… I have an “evil” plan ;-D

While my pay cheque will be reduced by 20%, my objectives will drop accordingly. Since my bonus is exponential, I can get a lot of money if I reach 150% to 200% of my objective. Since I started as a financial planner in March 2008, I always brought more than my share and I was working 4 days a week (I used to spent my 5^th day at the MBA). Therefore, I seriously think I can bring the very same number that I am doing right now with my new schedule. Then, instead of reaching 150% of my objectives, I’ll probably reach 200%-250%. This will bring me to the highest bracket of bonuses and compensate for my 20% income drop I made some quick calculation and I would “lose” about 4K to 5K by switching to a 4 days/week schedule.

You’re still losing money, brainless!

Yeah, well this was only the first part of my “evil” plan! The second part is that I will not use my 5^th day to go golfing or play on my Playstation (I wish I would though!). I will use it to work on my online business. Hence, the company will pay a salary for my additional work.

With the pay cheque “signed by me to me”, I will so about 4K more than working 5 days at the bank. The good news is that the evilness doesn’t stop there: we (my partner and I) are convinced that we can make our company grow significantly. So in a few months, my work will generate more cash flow within the company. We already have multiplied the company monthly income by 6 in 18 months. If I can only double it during the next year, I’ll be having my BMW in 2011

I always thought I would be making more money through my company than by working for an employer. However, leaving everything behind and starting on your own requires a lot of guts. Having a family and a mortgage to pay, I though that working part time on my project would eventually bring me there but without taking major risks…

As I previously said, the worst case scenario would be to fail with our company, lose our investment and go back at 5 days/week and retire at 65 with my bank pension plan. However, who knows where the best case scenario can bring us… can we dream to become another John Chow?

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