Welcome, Little Guys
Credit, Debt and Finance
Within this section you will find resources for all kinds of financial,credit and debt advice. When we say "financial," we're referring to dealings with money. Not just making it but how to spend it efficiently and wisely, how to use it to build your business bigger or start new businesses and how to find that money in the form of financing (borrowing properly). "Credit" has explanations of the different kinds of credit like bank credit, credit cards and how to use them and how credit can hurt you if you abuse it. The Debt section explains how debt works against you and how you may be able to repair it and live within it.
Money
Money is the second most important thing that you will need in order to start any kind of business. The most important thing you'll need is desire and the third most important thing is knowledge. So it goes like this, as far as the most important things you'll need to become the Big Guy:
1. Strong desire to succeed.
2. Money to start with (seed money)
3. Knowledge (maybe not as much as you thought)
By surfing and reading the following information, you should begin to have some idea of what it takes to open a business and attempt to make money. You should also find knowledge about how to keep that business open and producing a profit for you.
Managing a business is very important. You must have some knowledge of accounting. This does not mean that you'll need to become an accountant but it would be very helpful if you understand how accounting works. In most cases, you'll only need to keep the books, which means that you should enter all of the pertinent information into a log every day in some particular order, according to your paid accountant. Then, at the end of the month, week, quarter or whatever time period you set up with your accountant, you take the log to him/her and they will do the actual accounting and give you financial advise according to how your money is flowing through your business.
This next part is very important and we include it because so many people have a misunderstanding of how a business works. In business, you don't just subtract what you've spent from what you've earned and keep the rest. No, you have to have some order to your operation. You must set yourself a monthly or yearly salary and pay only that to yourself. You'll also have to pay any vendors, employees, repair services, utilities, etc. that you use. So, you can see why it is important not to take ALL of the money home with you, right? You have to leave money in the bank for the business to operate on. These are known as operational costs and you WILL have them if you open a business. It's all in how you "budget" your finances.
If you don't have any idea what kind of business you want to start, there is information here that may give you some ideas about some different businesses. Look them over and see if anything jumps out at you. Maybe you'll see something you like and, if not, maybe you'll get some ideas for other businesses that may be related to these in some way.
Remember, you should have a business plan. If you will be borrowing money, it's not a matter of "should" but rather a matter of "will." Any creditor or financial institution is going to demand a business plan before they will lend you a dime. They want to know exactly what your business will entail and how you are going to run it before they agree to give you money. If they don't like your business plan, they are very likely to turn down your loan. Keep that in mind.
Clean Credit
This is a big name item. Credit is very important to the Little Guy. If you have terrible credit, get it repaired. No "if and or but " about it…you get it repaired and you start now. Why? Because, as a business person, you will need credit. Maybe not right away but you will eventually need some form of credit. Whether it is important to you now or not, it will be at some point down the line. Start cleaning up your credit NOW because cleaning up credit is NOT an overnight occurrence. No, it takes a good while so it's best if you start repairing it right now. Don't fall for any credit repair scams. Find the best, most recommended and ethical people you can who do this type of work then get it done. It will behoove you BIGTIME in the near future.
Credit Cards
They can be wonderful or they can be hell. If you use them appropriately, they will be good to you. If you abuse them, they can make your life a living hell.
If you resolve to use credit cards appropriately, you can keep a good credit record and you can derive credit card rewards from their programs. Some programs are better than others so some research is recommended prior to your applying for a credit card. Take care of your credit cards and they can make you….abuse them and they WILL break you. Control is very important when it comes to credit cards. If you cannot control your desire to use it, don't apply for any credit cards. Once you overcome that strong urge to use a credit card for everything and then only pay the minimum monthly payment, you'll be far ahead of the game.
Closing Credit Card Accounts
So, what are the five things that actually make up your credit score? Do you know?
Here they are with the percentage of weight that each carries in determining the credit score:
- Payment History 35%
- Amounts Owed 30%
- Length of Credit History 15%
- New Credit 10%
- Types of Credit Used 10%
So, from a scoring perspective, there is no really good reason for you to close any credit card account. You see, if you're running behind on an account and, hopefully, you eventually pay it off, that account, even though you may close it, will be on your credit report for at least 10 years after it's paid off.
So, if you're having credit card problems and you can't stay out of the credit card pool, simply cut the damned thing up so you won't have it anymore. But DON'T close the account. It does no good what-so-ever. If anything, it hurts you.
Want to know more about what happens if you close your credit card accounts?