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Jewish World Review July 26, 2000 /23 Tamuz, 5760

Bruce Williams

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Consumer Reports


I want my partner to buy me out


http://www.jewishworldreview.com -- DEAR BRUCE:I am a senior in college in East Lansing. I am a partner in a mobile disc-jockey business, which my friend and I opened in August of 1998.

We split the start-up costs, about $5,000 apiece. We gross about $1,000 a week, which we split equally after the expenses are met. There is very little overhead -- only pager bills, phones and equipment repairs. I want to sell my half of the business to him upon graduation but am unsure how to determine a fair price. We are friends, but business is business. This business should grow considerably over the next few months. What can you tell me? -- D.H., via e-mail

DEAR D.H.: Unfortunately, these kinds of businesses are hard to put a price on. If business is as good as you claim, you should be at least able to recoup your investment in the business with perhaps a little bit of a sweetener. Businesses of this kind really have no great resale value, but they are super things for youngsters in college.

If your partner doesn't want to buy you out, it's very likely that you might find someone else who wants to get into the business. Your investment plus a little of the profit would seem appropriate.

DEAR BRUCE: My mother is getting close to 80 and started to talk to me and my sister about a will. She has a few possessions and, of course, a bank account.

We have complete accord in our family. We were wondering if a method could be devised without getting a lawyer involved? -- Reader, via e-mail

DEAR READER: Everybody should have a will. Even if it never gets probated, it should be there in case it's necessary. A will, unlike some other documents, cannot be repaired once it comes into force because it only becomes a viable document upon the death of a testator.

I know that there are will kits around, and a lot of people talk about writing their own. In my opinion, for the little bit of cost involved, perhaps only $150 or less, it would be well worth it for your mother to have a will, properly drawn by a lawyer. It can save a lot of problems after she passes and that, my reader, goes for you as well. You too should have a will.

DEAR BRUCE: I have stumbled on a high-yield return -- 11 percent to 12 percent fixed on investment notes. Are they as good as they appear? What are the disadvantages of unsecured promissory notes of uninsured subordinated investments? Would you say that these are similar to junk bonds, as opposed to CDs and Treasuries? -- D.C., Lakeland, Fla.

DEAR D.C.: You shouldn't mention this type of investment in the same breath with CDs or Treasuries. As they clearly state, they are unsecured by anything tangible, and they are uninsured and subordinated, which means secondary to other monies borrowed. I would have no interest in the 11 percent or 12 percent. If I were you, I would take a pass.



Send your questions to JWR contributor Bruce Williams by clicking here. (Questions of general interest will be answered in future columns. Owing to the volume of mail, personal replies cannot be provided.) Interested in buying or selling a house? Let Bruce Williams' "House Smart" be your guide. (Sales of the book help fund JWR).

Up

07/25/00: Negotiate with your neighbor
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05/25/00: CDs for security, not investment
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07/28/99: Get a lawyer -- it's worth it!
07/27/99: If it ain't broke...

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