Growing businesses Q & A : making an investment in Son's Business Could bring about a Real Family Feud.

Q : My youngest boy wants to borrow $5,000 to start his own business. Should I loan him the cash and hope for the best or simply let him know no and hope he does not get too upset? A : the very first thing you must do, Jeff, is identify if this cash would be offered to your boy in the shape of a present, loan or investment. I'm in possession of an extremely simple rule when it comes to loaning cash to kin : NEVER, EVER loan cash to anybody you could have to sit next to at Thanksgiving dinner. You, Mr Borrower, using your cash for a particular time period and you totally expect the loan to be paid back under explicit terms, even if his business goes south.

Sure, you may doubtless be a little more forgiving than a bank when the loan goes delinquent, but the damage to your private relationship might be acute and tough to fix. Significant changes to the tax laws now permit SOHO owners to create 401 ( k ) plans simpler than ever seen, and benefit from bigger 401 ( k ) plan rebates than they've ever seen. Stock market news. A solo 401 ( k ) plan permits a home business owner and their family to defer and invest tax-efficient ( gross ) retirement contributions at a fast rate. The significance of maximizing retirement plan contributions can't be emphasised enough. The same rule applies with making an investment in a relative's business. The very last thing I had ever need to do is lose my mum's yard sale cash. An investment is formed with the understanding that your money is fully at risk with no guarantee of return.

Even under the best of conditions an investment in any business is a bet. You and your other half also appear extremely worried about making your boy crazy, which raises another big red flag for me. The base line is this : if you can afford to give your child the cash and can do so without attaching strings to it, then by all means give him the money and wish him the best.