Monthly Archives: February 2018

Warning Signs That Your Debt Is Getting Out Of Control

If you’re like most folks in the United States, you may have some debt. For may people, some debt is fine. But for others, it can be a real financial burden. Is your debt getting out of control? Read further to see if it it and learn about some tips for getting your debt back in check.
Warning Signs for People With Debt
The following symptoms or conditions may indicate your debt is out of control:
  • Your debt is causing you stress, even to the point of losing sleep.
  • You are not saving regularly from you paycheck because you need the money to finance your debt.
  • Your emergency fund has run out and your debt is still out of control.
  • You use your credit cards to pay off debt and now they are maxed out.

If these or other emotionally painful experiences are haunting you, you may need to get a better handle on your debt situation.

Types of Debt
Everyone is different so that means that there is no one hard-and-fast rule regarding how much debt is too much for any one individual or family. Nonetheless, it is often useful to think in terms of three types of debt: Good Debt, Bad Debt, and Toxic Debt. Let’s examine these:
  • Good Debt: Debt that is taken on to buy something that generally increases in value, such as a home or business.
  • Bad Debt: Loans taken on at very high interest to buy things that decrease in value or are rapidly used up.
  • Toxic Debt: Debt with sky-high interest rates and/or debt you simple cannot afford.

Debt/Income Ratio

A good yardstick to use when thinking about your debt is your Debt/Income Ratio. If it is 15% or less, you are likely using debt wisely. If it is greater than 50%, you are likely having a problem with too much debt. What is your Debt/Income Ratio?

Tips for Effectively Managing Your Debt

Here are some useful tips to keep in mind when considering taking out a loan for several common needs or wants:

  • Housing: Limit your housing costs to 35% of your income or less. If it is too high, consider refinancing your mortgage.
  • Cars and Other Vehicles: Most experts suggest that car loan expense should remain below 20% of your take-home pay. If your debt level is beyond this consider refinancing or buy a less expensive vehicle.
  • College and Other Education: Here’s a simple rule: Don’t borrow unless you have to! If you need to finance your college or trade-school education, take on no more debt than you expect to earn in your first year working after college.

In conclusion, debt can be a good thing or a real detriment to your financial well being. By considering the type of debt you are incurring, and by calculating your Debt/Income Ratio, you may be better able to assess your risks. Above all, stay away from Bad Debt and especially Toxic Debt.

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Surviving The Early Days Of Starting A Business

At Blandy’s Wine Lodge, Funchal, Madeira

The initial phase of a startup is often the most stressful. It’s a time when your business is still fragile and where every mistake can be a fatal error. There’s no market interest for your brand yet, so no customers flocking to your brick-and-mortar or eCommerce store nor are there any venture capitalists or angel investors knocking on your doors to back you up. Surviving the early days, however, is key to staying in the game long enough to reach your break-even point and start making money. Here are six tips that will help keep your startup in the running:

Get a Good Co-Founder

Statistically speaking, businesses have a higher probability of surviving their early days if they have a good co-founder on board. Startups with a balanced team, mainly one founder focusing on the technical side and another focusing on the business side, are bound to raise at least 30 percent more capital. In addition, they have almost three times faster user growth and almost 20 percent less likely to scale too early, which almost always eventually leads to a catastrophic failure.

Use Your Fundraising Time Wisely

While essential, fundraising can be a huge productivity zapper. Aside from raising capital for your startup operations, your secondary objective should be to absorb as much information as you can. When you host a fundraising campaign, focus on talking with investors and building a relationship with them. Investors and venture capitalists don’t like suck-ups and those who are just interested in talking to them to get to their money. They want people they can trust. Once you establish rapport with investors, the capital and connections will start pouring in.

Prepare For the Temporary Failures

If you look at any startup scene, you’ll notice that many of the startup founders and teams are impressively smart and competitive. They’ve thought about every aspect of their business and the market surrounding it, down to the most minute detail. As you think about it, you’ll realize that it’s not a matter of who is smart and who isn’t. It’s a matter of who can ride out the storm. Expect to encounter countless scenarios of failure and rejection from customers and investors. Being persistent means taking the hits and getting back up to fight another day. The longer you stay standing, the more opportunities for success you’ll get.

Hire the Right People

The early days of your business is when cash is limited. You don’t want to be paying salary plus benefits on people who you don’t need yet or at all. Every business is only as good as the people operating behind the curtains. When hiring, prioritize who you bring into the workplace. Sit down with your co-founder and start hiring people who can help you create and refine products/services, build and market a brand, and manage cash flow. Roles to prioritize include accountant, product manager, and software engineers to manage your digital footprint.

Focus on Surviving, Not Scaling

Most business owners and entrepreneurs attempt to grow and scale their enterprise faster than they should. Scaling your business is a strategy that requires the right timing. Scale too quickly and you’ll end up distributing your limited resources too thin while scaling too late could lead to relatively slow growth. Make sure to focus on surviving and creating a sustainable business model first.


Survival in the business sense essentially takes the same level of effort and the same key factors as you would while trying to survive out in the real world. Carefully planning and preparing, learning and doing your research, and asking the help of other people who have the expertise and connections are all effective moves to stay in the race.

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