Cash in on small business: when to quit and become the boss
It depends on what the goals are and what level of revenue you are generating. Small business can also become large businesses. First I would have you calculate your worth per hour in your current field. Let’s use the classic example of a laundry mat. A laundry mat may generate a 50% profit. On average it is 30% to 40%. They have low overhead and maintenance costs but expensive utility bills. Thought to be resistant to poor economic conditions. You would need to watch out for competitors moving in to the area. The population of the area may reduce or move. More to consider….. The purchase of a laundry mat can occur with owner financing, business loan, or other funding. Business loans can have large interest rates eating away the profit you may obtain. Some would argue to get business partner funding or owner funding. Owner funding usually requires some…
How to leverage out of the margin
Margin Accounts A margin account is an account that allows you to make quick transactions and take more risks. It allows you to take credit and have access to credit. If you were to have one and sell a stock you can choose to have it go to the margin account or cash. The transaction is faster if sent to the margin account. You will be able to buy something else the same day. If you ask for cash it could take a few days to have access to the funds. A margin account will also give you the ability to take a loan from the broker. In general I would not recommend doing this as it is risky. Another benefit is the ability to use options when you have a margin account. Example: $10000 cash in brokerage. You buy Disney at $100 per share. You now have 100 shares of…
More are slowly being drained by consuming: how to cut down
How to reduce expenses As students we have been consuming and accumulating debt. Some of us have upwards of 300k of debt. People that have completed a different path will have started to earn sooner contributing to wealth building and they probably have less debt. Once we complete medical school granted we have been able to secure a residency position we actually start to earn an income. I would highly recommend maximizing your retirement account and moonlighting during residency if you are in good standing. Most residents earn about 40k to 60k depending on specialty. With call and other obligations this is about $20 an hour. You are cheap labor for a facility and the government pays for it in the United States. In order to reduce expenses you must identify and track your spending. Credit cards make this more challenging because it is not the same as handing over…
How to dig out of the student loan pit
How to manage student loans Most Physicians/professionals have enormous amounts of student loan debt just from medical school. The average amount of medical school debt is around $200,000. This does not include undergraduate loans if they were taken. Without steady income from working or other avenues of earning revenue the student loans will increase with interest over the years while you’re studying. Most people obtain government based loans. These rates range from 3% to 5% interest. Previously some of these loans were as high as 7% to 9%. They’re actually not very many differences between private graduate student loans vs. a government loan. A government loan is usually easier to place in forbearance or to not pay it if you have financial struggle. Generally it is not needed to be paid while you are a student where some private loan companies will require this. After you graduate from medical school…
The magic of car ownership if you must have one
Vehicle lease vs purchase Many people have written about the topic of a lease or purchase of a vehicle. In most instances a vehicle is a depreciating asset. In other words you lose money on it. It is completely fair to not have the expense of a car. If you do obtain one expect to pay for it, the insurance, the maintenance, fuel, etc. A lease is an agreement with a dealer that you agree to pay the amount per month to essentially rent the car. You then get the option of buying the car at the end of the lease term. A car purchase you either take a loan or pay with cash. In order to decide which is financially beneficial for you let’s crunch some numbers. Example: A 2022 Toyota Corolla is MSRP 20k. 1. You pay cash. 20k is gone and you pay expenses for the car.…
People are losing money on rent! Find the wealth!
If you have seen my other post about real estate you know the benefits of investing in it as well as the negatives. In my opinion the way we live is backwards. We should be buying property first when we are young not renting and we should be renting when we are older. Example: Young adult: You are 22 years old and just finished college. Starting your first professional career in banking. You earn $50000 per year. You do all the right things maximizing retirement, emergency fund, doordash on the side, making some extra money, start SEP ira, have a Roth IRA, and have an HSA account. You have $0 for a home down payment and you don’t have a lengthy job history for the bank to give you a home loan. You will be stuck living in a rental. You end up paying $1000 per month. You are spending…