Comments on: What Should I Do With My Side Business Income?

By: maddox

maddox — Fri, 29 Sep 2006 18:59:11 +0000

Savings account for down payment towards a house: I am wondering how this money is going to grow faster? should you invest in value added stocks or mutual funds?

By: ib

ib — Fri, 29 Sep 2006 15:37:18 +0000

i agree with paying relative, house fund, etc. but since it’s business income, what makes sense to me would be to have separate account (i think you already do) and just shuffle as much of it as possible into it and don’t decided now — wait until later. you may be hit with a great idea or opportunity to seize business-wise and this should help you with starting/funding that. like a gift of funding to your future self (for business or other).

By: jim

jim — Fri, 29 Sep 2006 14:53:22 +0000

I’d pay back the family member, only becuase it’s family, and then save the rest for a downpayment on a house.

By: Flexo

Flexo — Thu, 28 Sep 2006 21:12:26 +0000

I don’t like owing money to a family member. In the past, I’ve said I’d like to make that my priority. I did pay significantly more than expected at one point last year, but I was told it was unnecessary.

I agree that money and family don’t mix. According to last month’s balance statement I can pay off the car loan easily with accumulated business income, but I want to make sure I have enough left over for tax.

I may be over estimating my tax bill. I’ll take a look at that in another post.

Feel free to add to the discussion here about what I should do with business income…

By: R

Thu, 28 Sep 2006 20:25:57 +0000

Depending on how much you make on your side business, you may actually want to set aside as much as 30% for taxes. If you’re putting that in an ING account you’ll have more than enough with some left over. I would rather have too much set aside than not enough and that leaves you with 70% of the income to pay down the other debt.

Oh, and yeah definitely go with paying down the family member first.

By: Kevin

Kevin — Thu, 28 Sep 2006 20:18:51 +0000

If it were me, I’d pay back the family member first, just because I don’t like oweing family. After that, I’d save it for the eventual home downpayment.

By: D

Thu, 28 Sep 2006 17:38:39 +0000

My suggestion – Save 15.3% of your gross revenues in another seperate ING account until after tax day. Gross not NET, this will provide a tiny little extra security for you. After tax day, whatever is left unused – pay to the relative for your car.

Take all money that is not for expenses or taxes and pay off your car loan to a relative. I know this goes against the grain for paying off the high interest loans first, but here are my thoughts.

1. Just maybe they may have an emergency in the future and you do not want to be the one holding them back.
2. With a great and early pay back to this person you may be able to access another loan when you look to acquire your first home.
3. Money and family just don’t mix. Don’t leave a potential problem on the table. Should you go to plan a wedding – they may be tempted to feel “bad” about your decisions if you still owe them. Why make them feel that way? Not that it is a definite but, it could happen.
4. Interest on this loan is not tax deductible.

Whatever you decide good luck to you!