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In looking back and planning ahead, I realized that in the year 2000, I had a million dollar estate.  This included about $250k in real estate, $250K in IRAs, and about $500K in stocks, bonds, and money market account.  This helped me get comfortable with leaving a corporate job and striking out on my own.  I formed a business consulting company in 2001 and began helping people write a business plan and forecast cash. Using my previous experience in working with numerous privately held businesses, both small and large, I learned how much I didn’t know.  Planning and writing a business plan is one thing.  Implementing the plan is another.

In 2003, I opened a retail store near the University of Memphis.  Originally this was a music store for independent musicians and artists to have a place to sell their original music or artwork.  The store evolved over the next five years into a coffeehouse which offered live music and original artwork.  The whole experience was a trip!  Even though the store is now closed, I don’t regret making that investment.  During that time I figured out a few things and for some of us, we have to learn by doing it.  We can read about, talk about it, listen to others, watch others, but we actually have to do it and make adjustments as we go to be successful at it.

Between the stock market decline, costly mistakes I made in running a retail store, and vacancies in rental property, I burned through most of my cash and IRAs.  So now I am working on making my second million!

Making money usually happens inch by inch, yard by yard, mile by mile.  So how did I start to rebuild cash?  When my store closed, I was looking at unpaid bills and credit cards with high interest rates.  Initially I used a green columnar pad to forecast how much cash was needed to make regular monthly payments and to repay credit card loans.  After landing a job which paid every other Friday, I sketched out when money would be coming in and what money had to go out.  Squeaking by for a few months by deferring payments until the very last due date, my credit report was not severely impacted.  I am now down to one credit card balance with three credit card lines open.  My spreadsheet includes money coming in from all sources (when and how much), expenses associated with one rental property, expenses associated with the business consulting company, and ongoing monthly expenses such as utilities, insurance, food, clothing, auto maintenance, mortgage note, charitable contributions.  At the bottom of the spreadsheet are goals for how many clients I need paying at an average ticket price to cover the business consulting company expenses and also make a profit.  If I had more than one rental property, this section of the plan would include the number of tenants with average rent paid in to cover expenses and make a profit.

The spreadsheet is now on my computer and ends up being one page so I can carry it in my purse.  I use it as a tool to make decisions on how much to donate to others, how much should go to savings, how much is forecasted in each area, and then how much is discretionary for other things.  This helps me control spending and stay focused on the plan to increase cash within my own personal limits.  It includes my day job, pet projects, the rental property numbers, and a savings plan for the next “project”.

Sometimes it is hard to talk with others about money.  So there, I have told you at least part of my story.  I made it, lost it, and am re-building it.  Life is not all about money but I like to see progress in accomplishing my goals which are now written and revised when needed.  There are many people who are like me, trying to figure it out as we go, working hard to keep the pieces of the puzzle together.

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Nita Black - Business Strategist

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