Focus On What You Can Control With Your Money

Rachel Cruze (0:32)

So give us a call at 888-825-5225. And we'll be talking relationships, money, anything and everything.

John Delony (0:41)

All of it, let's do it.

Rachel Cruze (0:42)

Kicking us off, we got John in Detroit, Michigan.

John Delony (0:45)

Hi, John. Detroit, Rock City. What's up, John?

John (0:47)

Hey, how are you guys?

John Delony (0:48)

Good.

Rachel Cruze (0:49)

We're doing great. How can we help?

John (0:51)

Doing well. So a little bit of backstory for you. I work in a family business doing dumpster rentals and demolitions. I've got kind of this storm cloud off in the distance, so to speak, where there's a slight chance that things might go underwater in about six months due to some outside legal issues with a separate business that my stepdad lives off of. So his lifestyle cannot be supported by what this business currently makes.

The main issue I have is that I currently am a co-signer on a piece of construction equipment, and I want to set myself up to make sure that I can cover that if things do kind of go underwater.

John Delony (1:35)

Well, you got a six month runway here, so what's keeping you from screaming and yelling and running right into the middle of this problem?

John (1:45)

Well, I think the main thing is that for now, things are still good, so I don't want to necessarily jump in and start forking over money for something that at the moment is still being paid, if you will.

John Delony (1:58)

I get that. I'm trying to get to either, and I'm saying this with a smile on my face, right? So I'm not trying to be ugly. Either you don't like this business or you don't like doing business with this person and in a somewhat anxious, maybe over dramatic, over like, any of our businesses could have problems in six months. Or you actually have a problem right now. You just might not have to, you might be able to put it off for six months.

You get what I'm saying? Right.

John (2:31)

Yeah, I do. I think I don't necessarily have any problems working with him. I think co-signing was a mistake. I'm kind of a newer listener. So I probably wouldn't have done that if I could go back. But to kind of give you an idea of what the numbers look like, my stepdad's lifestyle is easily something that's, you know, a half million dollar a year territory.

And this business in terms of profit year to date has only generated $200,000 in profit.

John Delony (3:00)

But those are his personal expenses. What does that have to do with the business?

John (3:06)

The business that he is in the legal dispute with is what he pulls his income from. So if that disappears, his only income would have to come out of the profit of this existing business.

Rachel Cruze (3:19)

Yeah, which will be $200,000. And is that after you're paid?

John (3:23)

That's after I'm paid, yeah.

Rachel Cruze (3:24)

OK, so does he, why is he not calling the show, being like, wow, my income is about to go from $500,000 to $200,000? It's going to be his issue, John, but you think he's going to take, you think he's going to dip into your current business so much, possibly even go into debt to keep up his lifestyle, and you're scared for your business?

John (3:43)

No, so they're both his businesses. I co-signed on a $100,000 piece of construction.

Rachel Cruze (3:50)

Why do you think he's not going to keep up the payment on the things that you co-signed? Do you think that, like, what makes you think your business is going to fail? Because he'll just have to adjust his lifestyle or you don't think he will?

John (4:02)

I think it's more of a, I'm not sure if he would end up adjusting his lifestyle. I don't know if that's something that-

SPEAKER_6 (4:07)

So what would end up happening?

Rachel Cruze (4:09)

So say he doesn't adjust his lifestyle, then what's your fear, that he doesn't have an income and can't pay on the things that you co-signed? Is that the ultimate?

John (4:19)

My ultimate thing that I'm just trying to prepare for is, what happens if me as the co-signer, I end up getting stuck with the loan?

SPEAKER_6 (4:25)

Okay. So essentially all I'm worried about.

John Delony (4:28)

There you go. So let's live in that world which is-

Rachel Cruze (4:31)

How much is it?

John Delony (4:32)

You co-signed on something. Yeah.

Rachel Cruze (4:33)

How much did you co-sign for?

John (4:35)

The original loan amount was 84 and then as of right now, it is about 13 months in with about $60,000 left.