debt dilemma

livewire_82

Hello everyone,
I've realised that there are 2 ways to get myself out of debt - reduce my outgoings by sacrificing areas of spending or increase my income which requires some financial investment.
Sacrifice is not a forward step (and there isn't a great deal that I can sacrifice anyway) so I have started trying to increase my earnings my building a small business that I can easily run in my spare time outside of my 9-5 job (an ebay shop) but as anyone will know, you have to speculate to accumulate.
The catch is, due to misfortune, I have 11 months left on a £181 per month loan (car loan) and about 28 months left on a £226 per month loan (debt consolidation following 9 months of redundancy) which basically means that my income is currently no greater than my outgoings an on top of this I am living in my overdraft.
After 9 months of redundancy, I'm fed up of just 'existing' and want to start LIVING so I'm not prepared to wait 11 months for the first loan to end in order for me to apply for that same amount again to put into my business venture.
If I am not prepared to wait then is my only option getting a credit card? If I was to get one with a 0% balance transfer introductory period and started paying back from the day my car loan ended, I would easily be within the 24 months that is available with Barclaycard.

The bottom line is - am I being stupid and irresponsible? I am caught in two minds because one part of me says I'm in enough debt as it is without adding more. But on the other hand, if I am ever going to improve my quality of life, I need to increase my income - and life is way too short to sit around waiting.
I need other people to appreciate my position and offer advice. What would you do in my position?

Brenster

You make it sound like the money is there just waiting to be earned. What if it goes wrong ? I admire your confidence but the answer is simple.

I think you know deep down what the correct answer is, but i will say it anyway, pay off what you owe before getting further in debt. When you are clear of debt you will make better decisions, as you will have worked hard to clear your debt and should have learned a very difficult life lesson. I think most people on hear will have the same advise.

I wish you luck.

livewire_82

Cheers Brenster. It's a valid point and I'm sure there is no contest between to two. I have full confidence that my business will make me a profit but in order to do that, I have to fill my shop with stock. But stock costs money.
I guess I will just have to go with plan B and shut up shop for now until my current debts have been paid off as you've suggested.

J4mes

Sound advice Brenster, it's the only sensible thing to do.

In the mean time learn all about the business area you are moving into, eBay tech, etc...

Good luck!!

James.

Tixy

Self employed and with a relatively new business and I think you'd struggle to get a 0% card at all.

You mention a 0% balance transfer card - what is it you wanted to use it for? If its purchases for your business then you'd need a 0% purchase card. If you mean you want a card to pay off your overdraft then you'd need specifically a 0% card that allows super balance transfer (or money transfers) to pay money into your current account.

Even if you could - you say starting to repay the card after the loan has finished - you'd still need to meet the minimum repayments on the card for the next 11months, you can't pay nothing at all - how will you manage that if your outgoings already exceed your income?

I can't see that this plan is going to work. What other alternatives options do you have? Could you sell your car to pay off the car loan? or if its secured finance could you VT the car?

theoretica

Can't you start small with the business and build it up by ploughing all the profits back into it? Plenty of ebay businesses have started with far less than the £2000 you imply you want in your first post.

Brenster

I agree with theoretica, start with £100 of stock on ebay, when that makes £200, reinvest then on and on and on. If you are confident your business would work in a shop, then it should work on ebay. And if it doesnt, then at least you know, and you are only £100 down.

livewire_82

I guess that really is the only sensible way to go.
I'll invest minimal amounts (that I can afford) until the first of my loans in fully paid off. By this time I may be able to start investing larger amounts and therefore in theory a greater profit margin.

Ultimately my goal is build up enough business that will generate me enough money to comfortably live off so that I can eventually ditch my career in the city and work from home. I know this is an extremely ambitious target but you've got to aim high if you want the best in life. At the end of the day, there are not many people at all who would rather keep their 40 hour working week over a more care-free one. I know it's doable because I've done my research and I know there is a healthy market for my products. On a personal level, I've always felt more comfortable in a position where I am solely making the decisions for the business. Although I haven't run a company before, I have had experience as a freelancer and I am getting much more job satisfaction out of my current ebay ventures than I do out of my 9-5 city job.

Brenster

I agree, i would love to quit my career and do something that i was passionate about, but unfortunately it took me 10 years of training to get where i am, and i cannot afford to take a backward step financially to start again. That is my goal, as becoming debt free gives you more freedom in your choices. I should be clear by the start of the summer.
Good luck with your plans and keep me updated on how your ebay ventures are getting on.