Newbie...

Bestthingsinlifearefree

Why not get him to read and post on this thread ? (or e-mail it to him, click on the thread options tab)

At least then he can see other independent / neutral opinions / advice on the situation...........and maybe he can come here and justify his financial strategy :rolleyes:

Bestthingsinlifearefree

WannabeMortgageFree wrote:

I agree... His phrase when I just mentioned this to him (he's just across the room from me working!) was that we're cash skint but capital rich... And whilst that house last year cost us around £1.5k it made us £10k in capital.

Quick drag him to the computer and say Best wants to talk to him !!!:j :j

Yes house prices have gone up but maybe now is the time to cash in on that investment.

If prices fall back the investment house might cost you 1.5K next year AND a 10k loss in capital;)

WannabeMortgageFree_2

LOL I'll MSN him the link - he's not a fan of forums, so don't know if he'll post but he'll certainely read so give him a kick up the !!!! for me!!!

He's just doing the school run now so he'll be back in about 30minutes reading this if I have anything to do with it!

Bless him, he's not a bad guy. He's actually good with money normally it's just I'm not (don't spend anything, just don't ever know what's going on - I kept myself in ignorance over our finances until yesterday) and maybe I've got my facts wrong but it doesn't seem like we're in a good situation to me at all. He, on the otherhand, doesn't seem worried and seems to think that it's going to be easy to clear our debts.

I'm going to get him to read this as maybe he can either explain it better or take some advice!

Bestthingsinlifearefree

WannabeMortgageFree wrote:

but I have been so bamboozled the last 24 hours with figures and stuff I'm not sure I understand anything right now!

What can I say?! I used to be blonde!!!!

He won't be able to bamboozle me ! I am a 33 yo, 13 stone, 6ft male brunette ! and not the slightest bit dizzy !

But seriously he needs to look at his overall financial position, from what I've seen so far it seems things are in financial chaos but maybe he can prove me wrong.;)

Vickicb

Hi there,

I think you really need to persuade your OH to consider selling the second house, it will give you a fresh start, debt free and with some capital in the bank, or you could reduce your mortgage, or you could buy a smaller rental, like a flat, using the left over equity.

Many people on this forum have sold their main home and rented, losing a second home is not really a major hardship. You have young children and surely want to enjoy them while they are young, holidays and days out, etc, rather than spending all their childhood years worrying about money.

We sold our main home, partially because we wanted to move to another area, but we took the chance to downsize and pay off most of our debts, the disposable income we now have is brilliant. We could do with another bedroom, but once we have done the place up (without incuring more debt as we can now save for things!) we can either extend (there are one or two options for this depending on planning permission) or sell at a profit and move on somewhere bigger once our remaining debt (one loan, finishing in 3 years if I overpay) is gone.

You are in a unique position of being able to clear your debts without any disruption to your main home, and give yourself an emergency fund as well. Or, like I said, just downsize your rental property for a while.

Vickicb

BTW, our debts were also as a result of OH being self-employed. He's now in a full time job and we like the security.

TechyGuy

Ok, Ok, here I am. The bottom line on these finances is very simple: The expenditure is all pretty much with the cheapest providers, the way we pay ourselves is tax & NI efficient, the problem is income.

We produced about £21k income last year, which was paid half through salary and half through some carefully managed accounting.

The business can produce around £60-90k net profit per year, and as an example, work at the beginning of this year has set the foundations of 2 orders worth £11k net and £40k net, which we are likely to win.

The investment house makes sense as I know what we are like and we would not otherwise make provision for our retirement. Well, we would make the provision, but then find something more pressing to do with the money. The house is basically self funding in terms of mortgage payments, and it is slowly appreciating. It may at some point suffer a setback in value, but property ALWAYS recovers in the long term (10 year+) stakes. It also provides us with the choice of releasing substantial capital at any stage that we desperately needed it.

So WHY has the business not produced this last year? Answer (and I make no secret of this): I cannot manage my work/life balance. I now have a fantastic relationship with my kids, we are living in a nicer house, my wife seems happier, and I get a minimal amount of work done, most of which is fighting fire.

I have managed people and resources in the past, and I can see everything wrong with what I am doing, but that doesn't make the school run go away, doesn't do the shopping or cooking, and doesn't get our kids the constant succession of drinks, snacks, etc that they need.

It is impossible to make a phone call without a child wailing in the background, or to sit down and get into "the zone" with some marketing or development work.

I am stressed and pretty disheartened about it, and I feel guilty about expecting Wifey to perform miracles in child care so that I can go and perform miracles in business.

My enthusiasm is non-existant, and the normal pick me up is Wifey, but she has totally lost faith in the business and has, understandably, no interest in managing me.

On the bright side, I cleared my email box up to date yesterday, sorted out the backlog of awkward customers over the last 3 days, and have dug out and filtered 3 databases that I can trawl for potential customers.

A friend of mine is in exactly the same boat and runs a very similar business to mine. We chatted this morning, and we think the solution is some project/cashflow management software. I would love to fire up my laptop each morning to find a prioritised and scheduled to-do list, and to print off a cashflow and order projection at the end of each week. I think that would give the motivation I need, personally.

It would also help me analyse the orders, margins, conversion rates, etc, etc and steer the business. You can claim to have had a good week/month or explain away why you are busy, but there is no way of getting away from cold hard statistics like only £2k quoted, only 18hrs worked of which 1 was vaguely spent on sales, 3 on admin, 5 on internal IT issues and 9 on support.

If anyone runs their own business from home and has young kids there, I would love to hear how they deal with it!

Cheers,

TechyGuy

TechyGuy

Vickicb wrote:

BTW, our debts were also as a result of OH being self-employed. He's now in a full time job and we like the security.

Ours were completely the opposite - we were spiralling downhill until I started the business. Now we have a mortgage over twice the size and still managed to reduce our non-mortgage debt by £4k last year! Admittedly we did have very little spending money though...

It was mainly a lifestyle choice for us as Wifey was becoming very stressed looking after the kids all day at home while I worked. I think we have just gone a little too far in the opposite direction!

Basically we now have scope to really do something about our debts, I just have to find a way to manage myself properly, but I really could use some help on that one.

I know the theory, it's the practice that is a little more complicated.

Cheers,

TechyGuy

misspoppy

Hi Techy Guy

welcome to the forum, please don't think anyone is having a go at your we're just trying to help.

SO....... Cashflow software its out there and easy to get hold of and use, our business banking is through Barclays and they have something called clearly business which costs £1.15 pm inclucsive of several business packages including quickbooks accounting which is very good and does your cashflow projections for you. When i was in college doing business and finance LLoyds had the best business support info out there, we all abused it!! so the point here is if you bank with these two they are a great resource speak to your business manager.

Regarding project management well in its simpliest form a spreadsheet is the most flexible way of manageing that. put in the task and the date when you need it complete and work back from there putting in the dates when each task has to be done by to remain on time, it won't take long to build the first spreadsheet and use it as a template for all your other jobs, then once a task is completed fill it in green and a week away from whensomething is due fill it amber and over due red, simple do this first thing monday morning or last thing friday night and you know where you are.

Re kids if they are such a disruptive force can't you have a garden shed or the garage converted into an office? You can't use your kids as an exuse for not being able to feed them, because they won't be quite so you can work. What about taking them to a playschool each morning so you have clear work time.

basically you had a bad year emotionally last year and now its time to refocus and move forward for your families future, you can do you just need some discipline.


Re the 2nd home, you can't afford to support the out of work brother, tell him to get housing benefit you are not a charity and under the current circumstances the house isn't paying for itself, when rent is coming in it is but you aren't charging enough to cover maintence, you need to look at putting the rent up as a bare min.
Good luck.

Seaxwyn

TechyGuy wrote:

If anyone runs their own business from home and has young kids there, I would love to hear how they deal with it!

Hello TechyGuy,

That's me!

OH and I are both self-employed working from home. Ours are now school age, which makes a big difference, but even so working at home is a challenge with all the chaos and clutter of family life and children at home from 3pm. I have to push the lego aside to get to my desk and right now am typing with the TV on 3' from my desk.

Our solution has been for one of us to remove themselves from the home. For years my OH used studio space provided by one of his clients. When we moved house and that no longer made sense, we did up our garden shed to create a workspace that's out of earshot of the house. He is only at the other end of our small garden but at least can make phonecalls without children's noise in the background.

It seems obvious from yours and your wife's posts that you need to devote proper time and attention to your business so I think you should research options for working outside the home.

Good luck with it!