By Dave Ramsey
Q:I’m 26 and married. We’ve got our emergency fund in place and we are debt-free except for the house. We’d like to have a child soon, but my job requires that I travel frequently. Neither of us wants me to be gone most of the time with a baby in the house, so I’m thinking about opening my own business so I can set my own hours. Do you think this would be a good idea?
A: If time and money weren’t considerations, which one would you rather do? You’d be on straight commission as an entrepreneur, so there would be no weekly or bi-weekly check to count on as income. You’d have to wake up every single morning, go out and kill something and drag it home. If you don’t, your family won’t eat!
An entrepreneur is the person I know who can go from sheer terror to sheer exhilaration and back every 24 hours. You’ve got to have a strong mind and a strong heart to make things happen, and it will be a rough ride if you don’t have both of these. Plus, it won’t last long if you don’t absolutely love what you’re doing.
I’d advise anyone to make sure his job falls in line with his passions, and uses the skills and talents with which he was born. You don’t want to find yourself stuck in a call center if you hate talking on the phone, and you don’t need to go into the construction business if you don’t like working with your hands.
Everybody wants to be successful in his job and make lots of money, but personal happiness is just as important. If you wake up jazzed about what you’re going to do every day, chances are you’ll be successful and happy. But if you wake up dreading the day and your job, then I can almost guarantee you won’t be successful financially or happy.
Spend some more time thinking about this. Do lots of research and planning, too. There are lots of great small business ideas out there, but to make something good happen you’ve got to find the one that’s right for you.
Q: In your opinion, what is the best way to go when investing a one-time, lump sum of $1,000 to $3,000 for a long period of time?
A: The first thing you need to do is define “long period of time.” For me, when it comes to investing, I consider a long period of time to be five years or more. In this kind of situation I’d suggest either a growth stock or growth-and-income mutual fund. I prefer mutual funds with solid track records of 10 to 20 years.
People sometimes like to play single stocks on one-time investments of this size. I don’t think that’s a good idea. Over long periods of time single stock investments don’t consistently generate the kind of returns that a good mutual fund will generate. Why cheat yourself?
For more financial help, visit daveramsey.com.