Money Smarts for the Real World

July 30, 2011


Turning Passion into Profit 

This week let's dig back into your memories as a kid.  What fired you up?  What would you have done for hours even if no one paid you?  Think back to your dreams and see if there isn't something there that can benefit your finances now.  Set up your own "lemonade stand".  Or, if you see your child's passion for something as a potential to earn money, help them get it off the ground.  Whether they observe you in action, or if you help them firsthand, you will set an example for your kids to pursue their passion, to work hard even at their play, to be resourceful, and to always look for a way to better their skills/talents.  These lessons will help them whether they decide to be entrepreneurs or not. 

This week's newsletter is dedicated to helping you and your kids get creative in how you think about earning money and helping you assess the gifts and talents you have to share.


lemonadeLessons at the Lemonade Stand

When I was a young girl, summer days had their fair share of running barefoot through the sprinklers and picnic lunches, but it was at the lemonade stand where I learned about the "real world".  My best friend and I would set up the stand on the corner of our street, make the lemonade, set the price (10 cents a cup), put out our sign, and bring the cash box out.  We would chant to passerbys and attract as much attention as we could.  It was there I discovered a lot about myself (I liked earning money), and a lot about economics and how business works.  This summer, why not encourage your kids to set up a business they care about?  


Several moms I know have turned their young children's' interests in to businesses that they run together (one sells her own handcrafted tutu designs on-line, and the other makes and sells beaded jewelry).  Having hands-on experience running a business at a young age can really inspire your child to take their hobbies and passion to the next level.  Even if it becomes just a passing interest, the lessons they'll learn at the lemonade stand (or wherever) will be invaluable.  Here's what I learned all those years ago: 

  1. Make sure you like and trust your partner. Fighting can kill desire (and profit).
  2. Find a partner with skills that compliment your own.  My friend was good at promotions.  The sign was pretty; she had a good personality and knew a lot of people.  I was better at the business side of things, making sure that the lemonade and the cups never ran out.
  3. Pay attention to outside forces working for and against you.  The weather had to be right -- if it was too cold or too hot then no one was out to buy.  The rain killed business altogether.  Obviously, things sell when there is a demand for it.  Cold lemonade near a soccer field where there were games going on meant lots of sales.  Click here to read more.


Finding Financial Strength:

Forging Your Own Path

While there are bills to pay and mouths to feed, it can seem pretty unrealistic to turn a hobby into a profession. But, no one says that you have to make the leap to full-time entrepreneur. In fact, for some people, a part-time business is a great fit because it allows a smaller time commitment with all the fulfillment of being paid to do "passion" work. The other benefit is that in uncertain economic times, the side business can become "Plan B" if it needs to be, helping to make the stress of a lay-off situation less desperate. When we started ATI Investment Consulting, Inc., for example, there were a handful of clients and not a lot of revenue. But, with my husband employed full-time, and with insurance covered the breathing room we needed to grow was there. In fact, it gave us time to develop and launch Real$martica, Inc., as well. Is it a busy lifestyle (he still juggles two full-time jobs)? Is free time a gift? Yes. But, investing in ourselves and our family, and helping others achieve financial freedom is worthwhile. I am a firm believer that having control over your money is empowering, so having more control over how you earn it is a real boost.


There are many free resources available to people looking to start or expand a business at the US Small Business Administration (SBA), including help with writing a business plan, getting funding, mentoring and networking opportunities. Small Business Development Centers are located throughout the country, as are SCORE offices. Veterans, women, and retirees have additional resources available to them. Find out where local resources are and learn about the programs and services available by visiting the SBA's website.




$mart Question

My husband and I have been pretty good about saving, even when things have been tight, we've always managed to put some away for retirement.  My question is this:  With all the uncertainty going on in Washington and the potential effects on the market, it's hard not to panic and to stop investing; should I listen to my gut?


It's pretty hard to stay on course when the evening news is screaming louder than the voice inside your head.  But, that doesn't mean that it's time to abandon ship.  What has always separated great investors from the rest is their ability to see uncertainty (and market volatility) as an opportunity to buy on sale.  That being said, make sure that this is not money that you need any time soon.  If you have 10 or more years to tap this money, then your funds need to grow.  To do that, you need some equity investments (stocks).  The risk that is going on in the markets today is particularly rough, so I would emphasize buying low-cost, diversified index funds.  If the cost is low, you keep more of what your fund returns -- over time this really adds up.  I would also look to spread my risk among many companies instead of buying an individual stock.  Index funds buy a basket of stocks (or bonds, or a mix).  So, if ABC Company goes out of business, it is just one stock of many in your index fund's portfolio.  However, if you owned a large block of ABC stock -- you would lose the whole kit and caboodle if the company went under.  It's very important to spread out your risk as much as you can.  If either you or your husband contributes to a company-sponsored plan, I would not invest a large portion in the company's stock because now there is the added risk that if something should happen to the company, you could lose not only your investments, but your job, as well. A fee-only financial advisor could help analyze your portfolio and make recommendations to reduce your risks while still participating in the market's growth.





In This Issue
Lessons at the Lemonade Stand
Finding Financial Strength
$mart Question
$mart Move
$mart Move:

Take Inventory of Your Talents




The things that come naturally to us, we sometimes take for granted. Do friends and family compliment you repeatedly on your eye for detail? Your knack at putting together a beautiful interior design? Your way with words? Your patience with children or seniors? Your crafting talents? It's time to look at what you are known for and give thought to how you can market yourself as the photographer, caterer, care-giver, handyperson, etc. Maybe your talent is recognizing a trend, and you see a service that there is a need for. Perhaps the smartest move you can make is exploring your gifts or passion as a way to boost income or segue into retirement.


Quick Links
Have an Event?
Real$martica, Inc. is available to hold workshops for PTAs, local organizations, schools, and other groups and associations.  Topics include basic personal finance (handling money, using a budget, credit issues, and saving) to more complex issues such as buying versus renting; investing for retirement; managing the college selection, funding and financial aid processes; and estate issues.  Real$martica is also available for one-on-one consultations.   Contact us for more information.
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Thank you for subscribing to our newsletter.  We hope you found it informative.  Our mission is to provide you with timely information that you can put to use.  We want to address your needs and hope you will provide us with your questions, comments, and feedback so we can make this publication and our website a meaningful resource for you and your family.   

Dina Isola, President

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