Hey, You. Get a Second Job! (part 3)

In two previous posts, I discussed the issues surrounding my music arranging business as a second income stream. As the business grew and expanded, the income generation went up to help my family get out of debt faster.


One thing I forgot to mention in this discussion of additional income streams is that my wife also got a part-time job for a period of time (approx. 6 months) to help us get out of debt even faster. When my wife had our first child over 7 years ago, she stopped working outside the home, but when both our daughters were in the same school last year, she had blocks of time in her schedule when she could work a part-time job. My wife probably averaged $350-$400/month of income during this time, but hey, I'll take it to get out of debt even faster! So with my wife working, we had three income streams for a period of time to accelerate our debt reduction.

When you finally get gazelle intense (as Dave Ramsey would say) about getting out of debt, you need to have a serious game plan about generating additional income streams to get out of debt as quickly as possible. The longer you put it off or the longer it takes you, the less likely it's going to happen.

As Larry the Cable Guy says, "Get 'er done!"

Hey, You. Get a Second Job! (part 2)

Today, I continue with my story about my business as a second job.

Even though my music arranging business ended up as a second stream of income, I really did everything backwards.

This was the process I originally went through 5-6 years ago:

1. Had a little bit of debt.
2. Came up with a "great" business idea.
3. Started my business and realized I didn't have enough money to get it up and running in a "big," professional manner.
4. Refinanced our home to get more money out of our house. Went through $2,000-$3,000 rather quickly!
5. Took out a $25,000 personal loan to "pay off" 2 small car loans, a couple of credit cards, and used remaining money (approx. $4,000-$5,000) to attempt to grow my business. My big concern at the time was figuring out a way to lower my payments down to a "manageable" amount and still get some money out to grow the business.
6. After spending all of this money, the business was painfully slow in growing. Many months, I was funding business expenses through my regular income.
7. After many stressful months of this plan not working, my wife and I sold our house, used our equity to pay off half of the debt, and then the next 18 months to pay off the remaining $12,000.

This would have been a Smarter Financial course of action:

1. Had a little bit of debt.
2. Came up with a "great" business idea.
3. Started my business and realized I didn't have enough money to get it up and running in a "big," professional manner.
4. Decided to grow the business more slowly. Educated myself on growing a business through books, mentors, etc.
5. Went out and got a second job with a steady monthly part-time income.
6. Paid off our current debts as quickly as possible.
7. Once the debts were paid, we saved enough money to cash flow my business start-up in a smarter way. The business started to grow; attracted more clients; quit my initial part-time job.
8. We didn't have to sell our house! We still have equity in a home!

Even though hindsight is 20/20 and I wish I had done things the smarter way, I have no regrets in how things turned out. I feel like I learned a lot over the past 3-5 years. I learned my lesson the hard way, and I'll never do "stupid" again when it comes to home purchases, debt, and starting a business.

Larry

Hey, You. Get a Second Job!

Here's a two-step, fool proof way to get out of debt really quickly:

1. Control your spending, by getting on a tight, no frills budget.
2. Go out and get yourself a part time job in order to clean up your mess!

Here's my own lengthy version of my 2nd job story.

Part of the reason my wife and I got into so much debt 4-5 years ago was that I came up with a "brilliant" idea for a business that I could build by leveraging myself with a whole bunch of debt, thinking I could grow myself out of the debt really quickly (kind of sounds like the government!).

You can see my music arranging and typesetting business site at www.mystaffarranger.com.

Anyway, This was a really STUPID mistake, and I don't think the Lord honored and blessed the business (at first) because I was being a horrible steward of His money. When we started doing right things with money (i.e. getting on a tight budget and paying down our debt), the Lord blessed us and I started picking up more and more clients. I started being more and more selective about how much money I was spending on advertising and where I was spending that money.

To make a long story shorter, my business expenses came down and my revenues went up! Any profit that I was making with MyStaffArranger.com went directly toward debt reduction and taxes. I was able to use my part-time business as a "2nd job" to generate additional income and get out of debt faster.

Tomorrow, I'll complete my thoughts about the 2nd part-time job and debt reduction.

Larry