When you go after your debt, you’re keeping future interest in your pocket. People always seem to forget that you can lose money investing just as quickly as you can make it. While the market has historically gone up, none of it is guaranteed. Paying off debt is a guaranteed return, and I know that numbers people will disagree with me, but it’s not always about numbers. There is something about it that absolutely supersedes any dollar amount gained. If you’ve leveraged your debt freedom to make a big change in your life or even to provide some relief in your day-to-day life, you understand what I’m talking about. It gave me the confidence to change careers and take on so much more risk than I would have if I still had the debt. And no, my site hadn’t taken off at that point - I had literally only made $3 from my blog, but it was enough to realize the potential.Īnd the only, and I legitimately mean only, reason it was possible is because I paid off my student loans before I was “supposed to.” I knew entrepreneurship was the right path, so I tested the limits of my new found freedom and quit my job. Having multiple people tell me what to do was like nails on a chalkboard, and to be honest, I probably wasn’t the best employee. Shortly after that, I started Millennial Money Man to share motivation and advice to other financially curious millennials.īeing debt free gave me a real sense of relief, but I still didn’t like my job. At that point, I didn’t feel like I could move forward in any significant way until my debt was gone.Įighteen months later, after making a plan involving extreme frugality and side hustling, I submitted my final student loan payment. I had always dreamt of starting my own business one day (at that point I considered starting a pool cleaning business, which is laughable to me now), but my $40,000 student loan debt was weighing me down. The kids were great, but I didn’t love what I was doing. To make investment in the company more enticing, businesses often have to lower their share prices, generating less equity, increase the dividend payments and/or offer a greater percentage of ownership for each share held.Ĭompanies also have to make a number of decisions about equity financing, including the types of shares to offer ( common, preferred or voting), pricing, who to sell to (family, friends, angel investors or venture capitalists), and their policy for paying dividends to investors.Back in 2013, I was working as a high school band director. This makes investors difficult to attract. Privately owned small and medium-sized companies can find it hard to get equity financing because the liquidity of their shares is low. Debt financing costs less and leaves the company with more control. The business also shares a portion of its profits with its equity investors out of its earnings after tax (EAT).Įquity financing is almost always counterbalanced with some type of debt financing. In exchange for this benefit, the business must give them a percentage of ownership in the company-which may also include some decision-making control. If the company fails, the funds raised aren’t returned to shareholders. The benefit of equity financing to a business is that the money received doesn’t have to be repaid. When companies sell shares to investors to raise capital, it is called equity financing. Growth & Transition Capital financing solutions Kauffman Fellows Program Partial Scholarship Venture Capital Catalyst Initiative (VCCI) Industrial, Clean and Energy Technology (ICE) Venture Fund
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