My In-Laws Want Us To Fund Their Retirement!

My In-Laws Want Us To Fund Their Retirement!

Foreign welcome to the show yeah thanks for having me i appreciate it absolutely what’s going on well my wife and i were both 45 years old and we will be completely out of debt about three years mortgage and house and everything awesome that’s great we’re excited about that my wife will be taking over her parents uh catering business probably in the next three or

Four years and just kind of having a hard time figuring out kind of that finance how we’re going to do that that type of thing so just kind of wanted to get your guys’s input um they’ve kind of basically have said that they want her to kind of run it and then kind of split the profit 50 50. um and i don’t think they’ve really planned much for retirement i’m not

Sure if that’s necessarily the best way to do it you know we want them to have a good retirement we want them to enjoy retirement but it kind of feels like it’s going to be you know pretty big burden on my wife and a strain on the business we would rather not you know um have to take out a loan to buy the business you know that type of thing so they’re saying

Hey instead of you buying the business from us and giving us money we can do this where we get a certain percentage of the profit over a certain period of time well the the period of time is kind of the i mean they’re kind of they want it forever that’s the retirement plan that’s pretty much yeah i’m not taking that deal yeah what happens if they live 35 more

Years that’s what yeah that’s what i asked too we need to see could be on paper it could be retirement and and we could when we retire at 65. and still have to work to fund their retirement yeah you said seems like several times have you all actually sat down with them and had a very clear conversation about the numbers where you’ve actually seen the numbers and

Had clear expectations laid out now we’ve tried we did this about a year ago they’re very secretive about how much they make how much that this business that’s always good taking over the business from people who won’t tell you anything yeah and so it’s just if we love them but it’s just kind of frustrating because we never know i mean they’re both 75 uh we

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Want them to enjoy retirement we don’t expect to get the business for free or anything like that we you know willing to work with them but that’s why i think settling on a number it’s like what what does the business bring in what’s the top line revenue you have no idea no idea i know my wife has if this wasn’t her parents business and someone said hey you want

To take over this business i won’t tell you how much it makes i won’t tell you anything about what our net profit is but do you want to give us 50 of the profits forever you would tell them to kick rocks and pound sand wouldn’t you exactly yeah and so we’re not going to move forward with this until they’re going to be honest and we’re going to see these numbers

On paper not just hearsay well and even then you may not want to move forward with it but your wife wants to take over the catering business well yeah i mean she’s worked for him for you know 20 years you know it’s hard work that’s different than does she want to just because it’s comfortable and it’s what she knows do um but she kind of wants to know how much

She’s going to be making you know and that kind of thing too is she working there full time right now yeah yeah yeah well what does she make right now as a full-time employee she makes fifty thousand so ideally she’s making a lot more than that if she is an owner of the business now that’s before the split profits yeah and that’s the only thing we don’t know i

Mean we don’t know if it’s going to be they may be pulling in 60 000. and now we’ve got to split that and it’s 30. yeah okay well i would i would tread lightly carefully with legal documentation not because we don’t trust them but because we don’t want relationships to get severed in this process right okay so i also i would parse this out you taking over this

Business is not their retirement plan their lack of planning does not constitute your emergency in this scenario okay and so if the plan is hey unless this goes perfectly and this business runs perfectly we can’t put food on the table that’s a dangerous situation and so i would make sure that we have very clear rules on what this is going to look like because

What happens if there’s a down year right yeah i mean the there’s so much fluctuation with uh with catering in general and you know you’re like covet was really hard yeah and the thing with her mom there’s a lot of the baking and decorating and so when she retires she’s gonna have to hire somebody to kind of fill that role i don’t know i think it’s just going to

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Be kind of a strain on the business to support yeah you may have to hire outside people which will be another expense which will reduce profits it sounds like it’s very messy and sticky especially with the emotional aspect i’m sure that the fact that the parents don’t have a lot of retirement and savings as nerve wracking so then your wife may feel a little bit of

An obligation to continue forward with this business to help our parents but i would also challenge you to consider the option of selling the business to someone else like potentially if your wife doesn’t want to keep this specific business maybe she wants to start her own catering company from the ground up the parents can still sell the business to someone else and

Then they have that clear boundary that hard break where they no longer have their foot in the business they no longer have control of the finances and then they could possibly have a little nest egg to move forward with in their retirement and again you want that in writing unfortunately we would buy it from them and they’re like well we’re afraid we’re going to

Run out of money for retirement so i know it sounds harsh but that’s not your problem and so you say hey i’m willing to purchase it outright but we’re not going to do this deal where you just get 50 forever we’re not comfortable with that unless you say you get 50 up until x number and we call that good and if you never hit that number that’s a risk they’re taking

As well a number of years to do that all this to say this is messy and it’s given me anxiety and so i would tread with a lot of caution here and get everything on paper and even in the contract you might want to say hey we have the right to sell this business and give you half of whatever the sale is and call that good and if they go well that’s not enough for us

Well sorry that’s what we agreed to because who knows okay i don’t want your wife stuck with this because now she’s trying to cover her parents retirement plan yeah i would also encourage you when you sit down to have this conversation you may need to have a third party in the room like an attorney who can kind of bring some reality to that conversation because

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With it being her parents it might be easy for them to say hey like don’t cross this boundary like i’m the parents you’re the daughter well they can bring in a lot of emotion and drama and manipulation we raised you you owe us this and you need someone who can be completely objective and just bring the facts and say this is what is normal in a business transition

This is what is expected and it’s not personal it’s not feelings but this is this is what is healthy parties they’ll have ways they can structure it to where it protects both both of you okay so and what are you working full-time outside of this business yeah i teach yeah so i i work full time and and you know we’re you know i’ve got a we’ve got a 401k and an ira

Um we’re on a good pay you know good plan i think we just kind of need to get this ironed out yeah well and you guys being completely dead free house and everything three years from now is going to help out this whole situation because you’ve got wiggle room and margin in case the business takes a few years to get off the ground if she does take it over okay all

Right well i appreciate so much you guys is uh wisdom man yeah absolutely appreciate the call man and i’m going to send you a copy of dave’s book entree leadership and this is his playbook for how he started this business on a card table in his living room and has now has grown it to this amazing empire and i think it’s going to help you guys get some parameters

And boundaries and help you understand the right way to run a business because i don’t know how this business has been running we don’t know anything about this business but this will lay out exactly how to do hiring and firing and structure pay and a lot of the leadership principles as well because she hasn’t been in that leadership role she’s been an employee

And so it’s a very different side of the coin there

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My In-Laws Want Us To Fund Their Retirement! By The Ramsey Show – Highlights