Jewish World Review April 19, 2001 / 26 Nissan, 5761
When to incorporate; you may be breaking up my marriage
DEAR BRUCE: I am working on two projects: One is a restaurant that I want to open next year, and the other is a coffee table book. Should I start a corporation to run the cost of these projects through, or should I continue incurring the cost on my own? -- K.R., Orlando, Fla.
DEAR K.R.: Those are certainly diverse projects, and unless you have unlimited funds and time, you might wish to concentrate on one and then the other. Until one of your projects generates income, I think you can just absorb the costs and declare these on your regular taxes. When there is an income flow, however, you might be better served by forming a sub-chapter S or an LLC. You certainly are ambitious. Good luck with your projects.
DEAR BRUCE: My son is 26 years old, and he would like to buy an old four-unit apartment building. His approach is that this property will appreciate and then he can have his rental income in addition to the appreciation. I don't believe it to be that simple. I understand that you have a book on real estate. Could you tell me what it is? -- L.C., via email
DEAR L.C.: The name of the book is "House Smart," and it can be ordered by
It would be nice if your son's belief that "real estate property appreciates" was always true, but it is not. There is money to be made in buying property such as you have described, fixing it up yourself, and then selling it and moving on. However, this not a no-brainer. Money can be, and is, lost on these types of investments every day. As long as your son understands that property does not always appreciate and that it can depreciate too, I wish him well in his endeavors.
DEAR BRUCE: You may be breaking up my marriage. My husband says that you have continually said that people like me have to control their spending habits. I'm 24 years old and have been married for six months. We have no children, no mortgage -- in short, no nothing. I can't see any reason why I have to be watching every dime before I spend it.
When our credit-card statement came a few days ago, my husband went ballistic. I had spent a little over $1,000 on clothes. I earn almost $20,000 a year, so what's wrong with spending $1,000 on something that I need? My husband has informed me that unless I change my ways, he is going to take all of my credit cards away and cut them up.
If you think that I'm going to put up with a tyrant like this, you're crazy. I figure that now is the time for us to enjoy life, and if we spend a little extra money, so what? I think big mouths like you ought to remember what it was like to be young. We will have a whole lifetime to watch our pennies. -- B.T., Cleveland
DEAR B.T.: You have got to be kidding! You sound like a spoiled adolescent. What your husband is saying is that you have to live within your means. You have a very modest earning capacity, demonstrated by the salary that you mentioned, and without someone like your husband, you would be like many of my callers and readers who have run up huge credit-card bills and now want someone to bail them out. You are fortunate to have a mature husband. I don't envy him in helping you grow up, but you need someone to stand over you until you can think and act like an
Send your questions to JWR contributor Bruce Williams by clicking here. (Questions of general interest will be answered in future columns. Owing to the volume of mail, personal replies cannot be provided.) Interested in buying or selling a house? Let Bruce Williams' "House Smart" be your guide. (Sales of the book help fund JWR).
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12/18/00: Time to move on
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11/23/00: Rent our house or sell it?
11/21/00: Fixed or adjustable rate?
11/20/00: Debt consolidation requires discipline
11/16/00: Ten-year fixed-rate mortgages
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10/04/00: Put part of windfall in a Roth
10/03/00: Not paying taxes on interest from house sale
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09/27/00: Refinancing home without alerting crooks
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09/06/00: Pools can soak you
08/28/00: When the insurance company has an 'out'
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08/24/00: More 'interest' to live on
08/22/00: Paying for private school
08/18/00: Don't make huge down payments
08/16/00: IRAs for people with pensions
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08/11/00: Her shopping will ruin us
Yes, a contract means something
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06/27/00: Waiting before re-establishing credit
06/21/00: Insuring an older car
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05/25/00: CDs for security, not investment
05/24/00: Battling with collection agency
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05/15/00: House is 'worth' what's offered
05/12/00: Borrow from Mom and Dad?
05/11/00: Your heirs, your choice
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05/04/00: Lawyer are good for something
05/03/00: The binding nature of contracts
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02/28/00: Rely on a real-estate lawyer
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11/29/99: Mortgage strategy A-OK
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09/29/99: Trusting only one financial planner
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