Want to open a franchise, but would take years to save!
Dear Dave,
I’ve always been intrigued by the restaurant business and wanted to open one of my own. Recently, the opportunity presented itself to open a McDonald’s franchise. I really want to do this, but it would take years for me to save up the money. Is it okay to borrow money to start a business?
Jim
Dear Jim,
You’re right. It will take longer to save up the money and open the business debt-free, but that’s exactly what you should do. Most small businesses fail within the first five years. One of the main reasons for failure is the struggle to repay debt.
If you’re into restaurants, try starting small with a catering business out of your home. This will give you a taste of managing your own food service business, and let you know if you really like that kind of work.
It will also give you the opportunity to make and save some money.
That way, when your restaurant dream becomes a reality you can honestly say that YOU own the business instead of IT owning you!
- Dave
Deduct bad debt from loan and bankruptcy?
Dear Dave,
Not long ago I loaned someone money, and now that person has filed bankruptcy. Can I claim this bad debt as a deduction, or am I just out of luck?
Bill
Dear Bill,
You can claim the amount of the loan as a deduction if it was for business purposes AND if the money was previously included in your income.
But if this was just a simple loan to a friend, and this friend is either unwilling or unable to pay it back, I’m afraid you may be out of luck. Sorry.
- Dave
Identity theft by mother!
Dear Dave,
I recently discovered that my mother has taken out several credit cards in my name. I want to report this as identity theft, but have been told that I’d have to file a police report. Can I do this even though the cards were obtained a few years ago?
Jason
Dear Jason,
I don’t think you’ll be penalized just because this happened a few years ago, but you definitely need to contact the police and tell them your identity was stolen by a criminal.
Whether you have a police report or not, you do not owe this money to creditors. The fact that it didn’t happen just yesterday doesn’t change anything. You do NOT owe the money!
Contact the credit card companies, and make sure they understand the situation. I know dealing with something like this is hard, especially when your own mother is to blame. But at this point it’s the right thing to do.
- Dave
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Dave Ramsey is a nationally syndicated radio talk-show host and best-selling author. His life experience gives him an unusually deep perspective and insight into life and money matters. Be sure to get Dave's "Total Money Makeover: A Proven Plan for Financial Fitness." If you'd rather order by phone, call WND's toll-free customer service line at 1-800-4WND-COM (1-800-496-3266).