Dear Dave,
My husband hates his dead-end job and is talking about cashing out his 401(k) to open a franchise of his own. Does this sound like a wise move to you?
Tiffany

Dear Tiffany,
Everyone wants to live their dream, but you never want that dream to become a nightmare. One definition of a nightmare in business is “going all in.” Playing cards, this means you bet everything on a single hand. You never go “all in,” especially when it comes to small business. The right question is this: How can he live his dream without going all in?

This entire situation is a trap. If it doesn’t work, you guys have lost your savings, and bankruptcy becomes a real possibility. Opening a business just because you’re angry at “the man” and want your own business is not a good plan. He needs to find something he truly loves doing with all his heart and soul, because to have any chance of success he’ll need to live and breathe that business day and night.

Help him think about the things he could do every day that would make him smile. Once he figures that out, the next step is how to open that business without putting your entire financial world in danger. In other words, how can we start small with the money we have, instead of blowing our savings or taking out an SBA loan. If you have some cash other than your emergency fund or retirement fund, it’s okay to use some of that. But never, ever, go into debt to start a business or pledge every dime you have to something that could be a total screw-up. It’s not an either/or proposition, Tiffany. He doesn’t have to risk it all to get away from a job he hates or to live his dream!
—Dave