I’VE HAD ENOUGH OF THIS!

By "getting real" I mean looking closely at the financial and emotional realities of numerous scenarios. Sometimes this reality check will bring surprises or even a shock. Sometimes it will turn out just as expected. But always, I have found, it serves to refocus and inspire our energy anew. Just how do you do this getting real?

It's all about "Enough". Not the "I'm fed up with this" Enough, rather the "sense of having all that I need and then some" Enough. The first step is figuring out how much you need. Perhaps you already have a clear picture of what you and your family are spending on the average per month to maintain the kind of lifestyle you have. Can you make a list of all the typical expenditures with each one's average monthly amount? That would be great!

If not, that's the place for you to start. You already have a system in place for keeping track of your business expenses. Just set up something similar to track your household and personal expenditures. The categories will be different. If you are using a computer, the Quicken« program is great for this. I recommend you set up the personal accounts all together in a separate file from the business accounts. That way all your personal accounts will share the unique personal list of categories and won't be confused with business categories.

Good. Now you have your list of average monthly expenses and you're sure you haven't missed anything - even the "black hole" of money from the ATM? The next step is to fantasize and I know you're good at that! Imagine how your life would be if you were no longer relying on producing your craft products for your livelihood. Don't worry right now about where the money would come from. Just imagine how your personal living expenses would differ. Perhaps you would need only one car. Perhaps you could sell your home and move to a small cottage at the lake. You might be traveling more or you might be traveling and vacationing less.

Now try to tie some numbers to that fantasy. Go down your expenditure list and in the next column write what you think the average monthly cost would be once you retired. Don't let your worrisome mind confuse you with thoughts about inflation and today's dollar value versus the value later. That's just your left brain's ploy to get you to stop all this silliness! Push on through in today's dollars. What would your expenses be tomorrow if you stopped working today?

Now (don't forget to breathe!) add it up. This is how much money you'll still need to have coming into the household if you quit this business. How do you feel? Perhaps you want to go back and rework some of the numbers? Is it surprising? Or no surprise? What could be changed? If you're not putting your creativity to work producing your crafts, perhaps it could be redirected to creatively designing ways to live on less!

So, where can this money come from? There are many possibilities. Maybe you've already been saving for your retirement, putting annual contributions into your SEP or IRA. Pull together the records of all your savings and add up the current value of it all. Multiply that value by a reasonable rate of interest that you might expect to receive from your investments. Say, 8%? That's not asking a lot. Then divide that by 12 to see how much that could contribute toward your monthly retirement need or "monthly nut".

Do count your retirement accounts even though you are not yet 59-1/2 years old. If you decide to start drawing the income from those accounts sooner, there is a way to do it without having to pay the 10% penalty tax for early withdrawals. It's called the exception for substantially equal periodic payments, or annuitizing the account. Don't worry about that now.

If your investment income (the 8% above) isn't as much as your monthly nut, you have to do some more creative figuring. How much could you earn doing your business only part-time? Is there some kind of job (yes, working for someone else) that you would enjoy doing? Would you be able to get health insurance coverage? If so, that would reduce your monthly nut, wouldn't it? If you sold your house, would you have some equity left to invest and add to your investments? Can you sell your business?

Now that's a good question! Do you have any specific products that someone else might want to put into production? Is there someone who's been interested in your work or who has been helping in your business who might like to take it over? Although much of the value of your business is tied to your own creativity, you might be surprised when you start looking at it this new way. Also, different parts of a business can be sold separately sometimes. For instance, perhaps your customer list would be of value to your competitor if you shut down your business. Someone might want your equipment. You might find a buyer for the business who would be thrilled to get a home with a studio all set up and ready to go.

There are also other ways to continue earning money that will utilize all your experience. For instance, you may discover you have a book to write or could offer advice to other business owners through writing magazine articles. You could become a teacher of the skills you've developed. You may be able to offer consulting services to other businesses. Before you launch yourself off into another full-time career, remember where this started. You're just looking for a way to supplement your 8% investment income in your retirement, right?

If you still can't see how you can do it, you have moved a big step closer already. Now you know how much more you need to save before you can make the leap. Take that monthly nut and reduce it by the 8% monthly investment income and a realistic estimate of what else you could earn monthly (and enjoy doing it). Divide what's left of that monthly nut by .08 (or 8%). This is how much more you need to save in order to generate the additional 8% investment income.