BA Q&A: Keep Your Hands Off Your Retirement Fund.

this week. Let's start with our first question. Who would like to remain anonymous? Which is fine? So she or he or they say, Mandra and tif I need help, but I, oh, she's a little dramatic with lots of emojis. Truly, I do need your help. I started my private dining business several years ago, but was never really able to grow and groom it because of all of my responsibilities

at my nine to five corporate job. As I'm approaching forty years old in just two years and have experienced an unfortunate amount of death of close loved ones over the past two years, I've reflected and decided I do not want to be in my sixties, saying I wish I would have chased this dream or that dream. That said, I've decided to level up the business I started and take a leap of faith to invest in a food trailer.

This is going to literally take my business to the next level and give me the tools I really need to go full force. The problem is I don't have a ton of cash on hand, and because I want to go full in on this, I'm considering taking money out of my retirement account to cover the startup expenses. I'm looking into grants and start up funding options, but going directly to my retirement account would give me quicker access. My plan would be to pay myself back as my

business grows and scales. What are y'all's thoughts on this?

my grief is doing, which is a good thing. Which is she said, grief. You have two choices with grief, Tiffany grief can let you can constrict you. And you know those are the folks who someone passes away, they just decide never to leave their house. They're just basically almost like waiting to die themselves, or they do less

and less and less or. She said, grief can expand you, and it makes you look around and say, I'm acknowledging my humanness and my humanity and that we are here temporarily, and so I'm going to make the most of it. So I'm going to expand. And it sounds like to me that you are expanding. So I just wanted to celebrate that awareness that you're like, you know what, I don't want to be sixty and not happen live my life. So I just want to be like, kudos to you

for allowing grief to expand you. I'm saying those goods. I'm doing the sandwich because girl, you better leave never tire money alone. Because well, here's the thing. My concern is this. She said something like she said, I'm looking into grants and started funding, but to go directly to my retirement account would give me quicker act quicker that girl, I read that says foodie. Yep, girl, come sit down next to me, man, right between those right between this foodie.

This is like in church when you act you guys sit right between your parents and you're like you said, now, if you said I have applied to ten different grants, I have da da da I have and I can't find any funding, then maybe I might be like, huh, but quicker access is not better access. It's just now. And so I want you to do this food truck thing because it sounds amazing and you sound awesome, but I don't want you to do it to the detrite

of your future. I'm gonna just give you a I'm gonna let many jump in, but I'm gonna give you a tool that's really helpful. They help folks. If there's this company called Rising Tide Capital, if you go to Rising Tide tidecapital dot org or rg I used to teach with them. They have like a six week course from what I remember, where they teach onto Norse entrepreneurs. And it's also on a sliding scale, so you don't have to pay for price. I mean some people totally

go for free. And they also help to open you up to grants and funding and things at the end of that. So you get to learn everything from business finance to marketing to all the things they teach you in the six week program damn near for free. And then like I said, you have access to potential funding at the end. So I want you before you jump into taking money that should be the last, last, last case scenario, not your first jump in because it's.

get there? So that really resonated with me. But I agree, I think that the fact that you haven't the one thing about grants and looking for like other funding options, even if you were to do a friends and family round of funding, you know, I would say the benefit of going those yes, slower routes to get some funding is that it kind of forces you to put together, you know, a case for why they should invest in you.

And I think ultimately that work of writing down a business plan, a strategy, how are you going to cover your expenses, what are your long term ongoing cost you know, what kind of labor needs? Like having to actually explain all of that is I think really good business practice

in and of itself to better prepare you. And so my fear if you were to just kind of go the easy route and raid your retirement fund to buy this trailer, is that then you're going to have the trailer, But then what about like executing on that And are you even ready for that trailer yet? You know, and we don't know much about you. I don't know much about your business. Maybe you are really ready and there's

just not that stuff that I don't know. But I feel like sometimes when we go to ourselves first, it's almost like we fear asking for help and we fear asking for outside resources. But that is how so many businesses are founded, you know, through friends and family rounds of investing, through private investments, you know, through even funding

through traditional financial institutions. Like I wouldn't want you to skip these other ways of investing and like seeking that additional help versus, you know, putting your entire livelihood and your future on the line. It doesn't necessarily have to.

new role, I no longer need my car. I'm thinking about giving my car back since I don't use it. I also max up my credit card. I currently owe seventy five hundred dollars and I have thirty thousand dollars in student loans. I currently live with my parents, so I don't pay much for rent. Can you please give me advice on hacker role and my debt? Do you suggest me giving back my car and also make a

settlement with my credit card. I eventually have to find my own apartment, but I feel like I won't get approved of my credit SCRD, which is a five to fifty and I would barely be able to afford it. I would literally do anything and everything you tell me to do. Oh I can we love a listening A listening abe man, right, we love a listening, man, man. I know. So first, let's just acknowledge that, Like on the surface, Ken says I make eighty thousand dollars, and

you're like ooh. And then Ken says I live in near city. You're like, oh, so, Manny, you have lived in New York. Tell us what eighty thousand dollars really looking? Have you lived in New York? Ve you lived in New York?

a car that's seven hundred dollars? I'm confused. Well, when he said when he said his car note is seven hundred a month, my immediate thought was, damn, his credit score is probably on the lower side because people with lower credit And turns out it is it's five point fifty. When you when you have a low credit score and your goal for when you go to finance a car, you end up with like really long term loans very expensive, and the interest prices, the interest rates are just so

high that it makes financing get really expensive. I would say like, And he also says he may not even need the car anymore because his job has changed or something like that. So I would say, yes, I would get rid of that car asap, a up so that you can free up some cash. What kind of insurance is six hundred dollars a month? Is that that can't be auto insurance?

on it. But that's that was before. That was like I wouldn't say, like maybe like four years ago. But it's different now because used cars go for a Remember, Mandy, you guys sold your car right and you got damnar what you paid for because right now, you know, parts are slow to come by, and so you can sell youth car for much more and that will save you. Listen, So what's seven plus seven is fourteen fifteen fifty? Is that what he's like? So right now, that would save

you fifteen fifty a month. That's great. Okay, So now your credit card, I don't necessarily think you need to do necessarily like a settlement on your credit card. You don't. I know, it seems like because you're twenty five that you owe a lot. Relatively speaking, thirty thousand dollars in student loans is not that bad. I know it sounds bad, but it's not that bad. And seventy five one hundred dollars on a credit card is also not that bad relatively,

you know. I'm like, oh, y'all, try what I owed A good hundred thousand, so it's not that bad. I wouldn't necessarily settle my credit card debt. I think you can pay that off because look, if you are not paying this car note, the insurance and parking, you can put that toward your credit card and honestly have that paid off in a few months. That's what I would lean toward doing, and then so doing. By paying it off, you're going to see your credit score jump, like Jordan, Okay,

also you might want to consider it. So credit cards are what they call revolving debt, and so that is one type of credit to pay back what you're already doing with your credit card. If you divert some of that car note money towards your credit card, you can get that paid off in a year. I would also consider there's a company called They ust be called self lender,

but I think they just call themselves self now. And the way self works is that you quote unquote borrow money, but they don't give it to It's like I think I always tell people, choose the least amount of money. It's like five hundred dollars. I think it's the smallest. You borrow five hundred dollars, but they keep it in a in a money market account basically a savings account for you, and then every month you pay that money back.

And so instead of evolving credit, you're showing creditors and the credit reporting agencies that I know how to pay off a installment loan. That's a different type of credit. And so sometimes credit agencies like to see that you have that you know how to do both. You know how to do credit cards, you also know how to do loans, and so it's like I think it was like I want to say, it's like forty one bucks a month if you to borrow five hundred it's like

forty one bucks a month, give or take. And at the end of the year you get your five hundred dollars back because you know they never gave it to you and you paid it off, plus a little bit of the interest whatever the interest grew to. But it allows you over that year span, so you're gonna be paying down your credit card debt doing this like fake fake out loan with with self lender, So two ways

to show that you know how to manage credit. So you should end the year credit card debt free and hopefully a much stronger credit score, so you will be ready then to get your own apartment in a year, you know, which might seem like a long time, but it's not. I moved there. I moved that around the same age you were, because same I wasn't making much money and I was like, how can I afford this?

So that's what I would lean into. Ken is doing those things and trying not to get into any additional debt. You know, And if you have student loans that are federal right now, I mean they're still because what is the moratorium up, Mandy? Is it October?

on that now anyway, which is which is great. Don't be afraid to pay just the minimum to that as you take care of this credit card debt and then bump it up, you know, as you as you can pay more, and so don't you know, stay home with the parents. I would give myself a year work this plan. By then I would be looking on a mandy if I was you. So you can make more money through your career. Okay, again, you.

And if you can get this, if you can get that huge expense of the car off your plate, and you know, you can cut whatever other expenses you can cut and get that credit card debt paid down. You're still so young, but this is a really this is a really crucial moment, Like when you're twenty five. The financial choices you can make today will can dictate whether or not you will reach like millionaire status down the line, and they can dictate whether you'll be able to buy

a house of your own someday. You're talking about renting, but think bigger, like, you can make choices today by getting rid of the car, paying down your debt, saving and investing your surplus money and not letting it, you know, run away from you.

But I'm just saying think bigger. I'm kind of giving you the same pep talk that I gave Husby back in the day when you know he had he moved out of his parents' house like a Dominican household in the heights. Like that's something you just didn't do until you were like in your thirties because of how expensive it is, Like people live with their parents for a long time. But he move that onto his own and he also found himself in a lot of debt, living

paycheck to paycheck. I just found out recently that he used to really go hungry in between paychecks because he was so proud, like he didn't want to go home. And I was like, your mom would be pissed.

take advantage of this gift that you have. And yeah, your credit is crappy now, but like Tiffany said, once you pay off this debt, you know, get rid of that car, like jump like Jordan, I mean, I have no doubt that your credit will bounce back, and then it's about okay, let's keep it there and recognize how do we get in the situation in the first place, and like, let's try not to do that. Let's try

to do that again. Ken, we can help it and then find your wife like me, and then you know you'll be good.