QUESTION: Jake in Boston owns a successful barber shop. He’s running out of room. There’s a building he’d like to buy with its own parking, and the price on the building keeps going down. Should he prepare to buy this building? Dave has some questions about his success before giving an answer.
ANSWER: I don’t want you to be down to no money doing this, and there’s nothing pushing you out the door today except the fear of what’s going to happen and the ability to grow. If you waited six months, it’s not going to be the end of the world unless you missed one of these deals that you wanted.
I’m doing it if I’m you. That leaves you $20,000. You’re doing great. You’re going to have $20,000 in the bank and a baby on the way. You can build that other $10,000 back up pretty quickly because you’re making money like you’ve never made.
We pay cash or we don’t do it. And I wouldn’t go over $10,000. If you’ve got to do some of your construction of your stations in two phases and you save up the money for the second phase, that’s fine. But don’t spend over $10,000. I don’t want you below $20,000. That’s what I’d do if I were in your shoes. You’ve done a great job. You’re sitting there completely debt-free, money in the bank, ready to do it.
QUESTION: Molly in Indiana is a nursing professor and her family’s breadwinner. She’s considering leaving the private university she’s at to teach online from home. She will take a cut in benefits as a result, but pay will be comparable. Dave gives Molly some things to think about.
ANSWER: I guess it’s a pretty simple tradeoff. The other stuff really doesn’t matter much, but you’re saying, “If I take this job, I’m going to pay for my kids’ education. In order to be home with them, I’m going to pay for their education.” That’s probably going to mean they go to different schools. Are you willing to do that, or do you want to work for seven more years?
The typical high school student going into college is probably not an online student. That’s not the normal track anyway. It’s usually a brick-and-mortar scenario. Most likely, when your kid “goes to college,” it won’t be online, so I don’t think that’s going to be the deal.
Basically, you’re saying—and what you and your husband have to decide—is do we want to put these kids in different schools so that we can pay for it so that I can be home with them for the next seven years? That’s the decision. I don’t think there’s a right or wrong one there, by the way. I think that’s just helping you analyze it. The other stuff—the “benefits”—I wouldn’t trade that. Five thousand bucks here or there, you can pick that up tutoring a little bit. That’s not an offset. The other thing is an $80,000 or $100,000 decision. I’m okay with that. I don’t think you’re doing anything wrong going either direction. I think you’ve just got to set those in front of you and say, “Is this worth it?” It may be that you say you can’t afford for you to be at home on that basis. Or you say they’re going to go to a different school, they’ll have to work and pay for it, and you’ll work and pay for part of it so you can be home.
QUESTION: Amanda in Texas says her husband invited his sister, her husband, and their two kids to live with Amanda and her family since the husband just lost his job. Do they need a roommate agreement while they stay with Amanda and her family?
ANSWER: The chance of Sharon inviting someone to live in my house without me being in on the deal is about zero. That changes the discussion. You and your husband need to get on the same page long before we try to get these people on the same page or allow them into your house.
Once you’ve done that, then to answer your question, yes. Your purpose of allowing them to move in is not because we actually want more people in this home because gosh, with all these kids, we don’t have enough. That’s not your purpose. Your purpose is we want to give these folks a chance to get back on their feet. You need to ensure that they’re doing the steps to get back on their feet. That involves working, but it also involves you going over their budget with them. You’re not going to charge them rent, but rent is while they’re there, they go over this stuff because you want them back out of there. And you put a time limit on this. Regardless of what happens, they’re out of there by X date.
I wouldn’t suggest $70,000 worth of time. They just need to get back on their feet. I don’t want somebody living in my home until they pay off $70,000 worth of debt. If you do, you’re unusual people. I think letting them get back on their feet and doing the steps to get there is the big idea. I don’t know . . . three to six months or something. You just put down there by the end of the year, this will be over. If you want it to be a year and both of you agree to that, it’s your house. You can decide that. I don’t have to decide it. I would not just let this thing be in perpetuity where it just goes on and on and on. That’s going to get you guys in trouble. You need to set expectations on the front end. That way, you stand a chance of pulling this off and keeping the relationships.
QUESTION: Scott from Ft. Worth wants to know how to build a mission statement for his company. Dave says it needs to align with his values.
ANSWER: Back in the very first or second lesson, we did “Dreams, Values and Mission Statements.” In that lesson, there are three things that my friend Dan Miller talks about to form a mission statement. He says your mission statement needs to line up with your talents. Each company has certain personalities to them, and you have certain things you’re good at. To use Jim Collins’ phrasing from Good to Great, it would be like your hedgehog. What is your wheelhouse?
Your talents, your values—what your value systems say about how to apply those talents and skills and abilities—and then what is your personality? Literally, companies have personalities, and a lot of times they mimic the founder or the starter or the person who’s running it—the leadership team.
That’s where you go to first for your mission statement. You want it to line up with your wheelhouse—skills, abilities, personality traits, value systems and those kinds of things. It needs to flow out of that.
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