Jewish World Review Sept. 13, 2000 / 12 Elul, 5760
No reason to give credit
DEAR BRUCE: We have a small appliance repair shop. Our business is decent, and we are making a respectable living. However, we have one constant irritant. From time to time we give one of our repeat customers credit. They may have left their wallet at home, or are a little short. More often than not, we get our money. But every so often, one of these guys ignores the bills. It's just so irritating. We are not talking about a lot of money, at the most $35 or $40, but more often it's under $20. How can we avoid this? -- L.N., via e-mail
DEAR L.N.: There is a very easy answer: Don't give credit! The hard facts are, on small bills such as this, if someone chooses not to pay, there's almost nothing you can do. Yes, there are legal steps that you could take, but they would cost multiples of the amount of money to be collected. If this is going to bother you, your best bet is to simply say you will take credit cards, post-dated checks if you must, but no across-the-board credit.
DEAR BRUCE: My husband reads your column and many others like it. He is persuaded that at 35, we should be, in his terms, more aggressive in our investing. We work very hard for our money, and I want to be sure that we don't lose it. I have insisted that we invest in nothing more risky than bank CDs, and I have investigated Treasury Bills. Why do you guys continually tell people to gamble, when it's just a foolish thing to do? -- P.N., via e-mail
DEAR P.N.: If you are absolutely sure that you cannot live with any risk, then perhaps you are condemned to invest in vehicles like CDs. You should understand that these are not profitable instruments. The whole world cannot be wrong. I don't think anyone is suggesting that you guys invest in things that are very, very risky, but for pity's sake, securities in the nation's stronger companies over the long pull have to do well. Even if one tanks, the others will more than compensate for that.
At your age, it is criminal to be so conservative in your investments. You see, even if things do go wrong, you have lots of time to recover. If you were 70 years old I would have a different reply. Why not do a little bit of phantom investing? In other words let your husband invest the money on paper (without actually handing over any money at all, just as a mock demonstration) and see where you are six months or a year from now. I think you will be persuaded that he is going the right way.
DEAR BRUCE: My husband has always wanted to be in business for himself. He is a very fine watch repairman and knows jewelry. Recently we found out quite by accident how much our house had increased in value. Here in the Bay area properties are so ridiculously high that it's really hard to believe. Well now that he knows that we have over $200,000 equity in our home, he wants to sell the home or mortgage it and open a store. I am scared to death. The house is all we have. -- M.R., San Francisco, Calif.
DEAR M.R.: You are the beneficiary of this unearned value and are to be congratulated on being so fortunate. Having said that, many, many times entrepreneurs are required to hock everything they have. When I was your age, my house was mortgaged and unmortgaged so many times it thought it was on a merry-go-round. That is not to say this is a good thing or the right thing for you. There are enough people out there who will take these kinds of risks, and if you are not able to do that simply because you can't live with any kind of risk, then your husband is doomed to be an employee the balance of his life.
I never advocate taking risk without knowing the amount of risk and settling with yourself to begin with that if things don't go well you can live with it. I can tell you that very few people succeed in business, particularly those starting out with little that haven't taken serious risks. Is the risk worth the reward? Only you guys can figure out that
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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