Having adequate surplus income to make strategic long term investments may require more than one or two sources of household income. Perhaps owning a profit making business in addition to having paying jobs can be a source of such investment cash flow. With the low cost of technology these days and with much of the population in the US using technology like TV, cell phones, and the Internet it shold be possible to be entrepreneeurial and be employed.
I attended a small business tax workshop this weekend sponsored by San Jose’s www.businessownerspace.com. It was aimed at small business persons and people planning to start a small business. There were two workshops: business structure (sole proprietor, partnership, C corporation, S corporation, Limited Liability Corporation (LLC)) and record keeping for sole prioprietors. I attended the business structure workshop given by Linda G. Coleman, EA (enrolled agent) (http://biztaxtallk.com) and she was excellent. Her handouts are the clearest set of PowerPoint resources I have seen on the subject of business structure. She certainly came across as knowledgable and approachable. There were many organizations that were available to offer aassistance to small business owners and those making plans to start a small business.
I highly recommend taking the time, 10AM-2PM to attend next weekend’s repeat session, March 15, 1290 Parkmoor Ave, San Jose. It’s just off the 280 Meridian Ave exit at Parkmoor.
While the attendance was good, there was plenty of room for more people. I thought about why more people were not taking advantage of such abundant free resouces. Can it be that everybody who is a small business owner is already totally knowledgable and has no need for free consulting? Could it be that the masses of people employed in Silicon Valley companies are totally comfortable and financially secure and have no need to think about doing something entrepreneurial on the side? Could it be that those couples in the valley who met while both were working and who decided to live on one income when children appeared on the scene, have no need for some supplemental income? Could it be that a household with one spouse working in a company has not thought about the at-home spouse doing something entrepreneurial from home to potentially provide a path to a second career for both spouses?
I also thought about the insights I gained by playing Robert Kiyosaki’s Cashflow 101 game. I remember rolling the dice and discovering that I lost my job. But since I had previoously bought a small busienss and had some income producing rental property, I was set back during the job hiatus, but I was able to keep going, get another job, without skipping too many beats financially. It seemed really valuable to have made the moves to diversify my income before encountering stormy times jobwise.
I also remember reading tax planning books and attending other seminars where tax advisors made it clear that the IRS allows for 20-30 tax write-offs for legitimate business owners, but only 2-3 for non-business owners, and mostly if they own their own home. Renters don’t get much in the way of tax relief. So I knew that it made sense for anyone to get set up be a legitimate small business owner, even if the owner was employed fulltime and the business was a home based business done seriously for a profit on the side. I knew that many ambitious people never let the notion of a 40 hour work week limit the number of hours they invested in doing productive things to improve themselves or to generate income. I was never able to relate to the concept of “Oh, It’s Monday, another week of work”, or “It’s Wednesday, hump day, halfway through the work week”, or “Thank God it’s Friday, TGIF”. I was always willing to put in something extra to get to where I wanted to go.
I think that many people who are currently well employed tend to think their situations will last forever, like the real estate boom would last forever. Or more likely people know they need to do something extra to diversify their income sources, but they are just so busy raising a family and working extra hours at work that they put off getting started. Procrastination is so easy to fall into when you think you need more money than you have to get started, or more time than you have to get started. The key insight that people need to have as early in their working life as possible is that time is your friend if you get started with 20-30 40 years of time to let compounding work for you. And it’s not a matter of lack of money or lack of time. You can always partner with those who have money and who have time. It’s a matter of lack of desire and commitment to an emotional future lifestyle or future life options and then it’s a matter of a lack of ideas. We all tend to let the good be the enemy of the great. I suppose people who are faced with life changing circumstances early in life will be motivated to make decisions that get them on a path to greater financial independence. The rest of us think that we are on the right path becuase we are doing OK, relatively better than our peers. We fail to consider what could go wrong with our current plan. I do believe we all need to aim for the stars in order to hit the moon.
So I was surprised that more people were not taking advantage of the workshop and the free consulting. I did notice that 80% of the attendees were sharp looking women. So maybe that’s a good reason for guys to attend next weekend.
