Is It Partner Time?

Sarah says her husband has an opportunity to become a partner in his firm. In order to buy into this company, they need $20,000 to buy an initial stake. Sarah thinks it feels like another debt. Is it?

QUESTION: Sarah in Spokane says her husband has an opportunity to become a partner in his firm. They’re working through debt from a business gone bad. In order to buy into this company, they need $20,000 to buy an initial stake, and he can then go at his own pace to buy in 100%. Sarah thinks it feels like another debt. Is it?

ANSWER: He’s going to pay $20,000 to be a partner. You need to be careful that you don’t buy what is effectively a minority share position. You can be in a minority share position in a partnership in a firm like that and be all right as long as one character isn’t ruling the deal. But you’ve got to understand that your $20,000 may buy your other four partners the opportunity to vote you no raise, or no money at all. You need to look at that.

Before you aspire to be a partner, you need to make sure you want to be one. Also, if you’re not completely out of debt by then, you need to put it off. You don’t buy investments when you’re in debt.