As promised in the last column, here are the remaining questions “about your personality, plans, goals, finances and working habits,” as well as some of my thoughts, from the recent Wall Street Journal piece by Molly Baker, titled “ You Want to Start a Business? First Ask Yourself These Questions.”
$ How much am I prepared to put in – and lose entirely? The piece refers to the “affordable loss principle,” which is an overall number that will keep you from having to calculate affordability at every step of the start-up, and is a number that you could easily justify to a close family member.
$ Is Anyone else doing this? If it has been tried before and flopped, why would my experience be different? If there are competitors that you think you can improve upon, what is their history – what did they do as they overcame market and other challenges? How can you improve on the product or service? The piece suggests that you try to think of all of the ways that you could fail, so that you can realistically prevent those possible failures, or conclude that, for whatever reasons, like government regulations, they can’t be overcome.
$ Why will someone part with their discretionary income and buy this? What human emotion will drive the purchase decision and result in a customer recommending the product or service to others.
$ Do I want to spend that much time alone? Working alone to create and build a start-up can be challenging and lonely, so the piece suggests that you consider looking for a co-founder to “walk the road with you”.
$ Finally, if the business is not successful, are there collateral benefits that you will gain that will make the effort worth the time anyway? Will you have gained knowledge and experiences that will make you more employable, better able to start another business in the future, or otherwise make your life or your family’s life better?
On a different subject that really got my attention, more than half of U.S. adults (51%) currently have unused gift cards, vouchers, or store credits totaling roughly $15 billion in outstanding value, according to a new Bankrate.com report. Here are some interesting details.
“–Of those with unused gift cards, vouchers, or store credits, the average value per person is $116.
“–Nearly half (49%) do not anticipate using all of their unredeemed funds, including 30% who plan to use most of them, 14% who think they’ll use only a small portion, and 5% who believe they’ll use none.
“–Millennials (ages 25-40) are more likely than those who are older to have unused balances, have more total unclaimed value, have at least one gift card/voucher/credit over a year old, and to have sold a gift card. They are also less likely to believe that they will redeem all unused balances”.
I know that for myself, if someone gives me a gift card and it is for a place that I usually shop at, I use it right away, within a week or two. If it is for a place that I don’t frequent, I will give it away to friends or family who do frequent that place and will use it within a reasonable time.
On a different subject that we periodically visit, here are some National Days that I will be celebrating during the remaining days of August. Aug. 8 – International Cat Day (our adopted cat seems to celebrate this holiday every day); Aug. 10 – National Lazy Day (I need one of these for sure); and Aug. 12 – World Elephant Day. (You can tell this one on that day: Where do 30 elephants go? Pretty much anywhere they want to.) Also, Aug. 15, National Relaxation Day (with all that we have been through with the pandemic, and with all the issues surrounding the Delta Variant, embrace this one); Aug. 16 – National Tell a Joke Day (here is my favorite of all time: how do you know that Santa Claus is a male? No woman would wear the same outfit every year); and Aug. 17 – National Thrift Shop Day (this one actually has something to do with personal finances). Sometimes you can find some great stuff there, so give it a try if you never have. Finally (these are big ones): Aug. 21 – National Senior Citizen’s Day: and Aug. 26 – National Dog Day.
On still another subject, we have talked in the past about the wealth transfer that is and will continue to take place from some of the few remaining members of the Silent Generation and from the Baby Boomer Generation, but until recently I never had a number to put it into perspective. Now, according to the Gist By Finny, “Research approximates that about $68 trillion dollars in wealth will be transferred over the next 25 years or so. This money in question would be shifting mostly from the Baby Boomer generation to Gen X to the tune of about $48 trillion.”
A further issue which its discussion identified is the possibility that the values to the beneficiaries of some of this wealth transfer may be reduced by possible changes to the tax code, specifically the current stepped up basis for some assets. So, “The stepped-up basis could become an endangered species: Biden has previously made mention of eliminating one of the most crucial parts of the tax code when it comes to wealth transfers: the step-up in cost-basis. The stepped-up basis allows beneficiaries to claim their inheritance at its present fair market value, eliminating any tax on gains made based on the original owner’s investment amount. While this seems unlikely for now, it would be a huge blow to those inheriting investments, such as real estate and stocks. “
In the next column we will look at the growing movement for a four-day work week, including even four-day/eight-hour-per-day work weeks.
John Ninfo is a retired bankruptcy judge and the founder of the National CARE Financial Literacy Program. Find his previous weekly columns at http://www.mpnnow.com/search?text=Ninfo