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Pay Attention to Red Flags to Avoid Financial Regret

 

            Owning a bar was always a dream of mine. So when an opportunity came along to open a bar with a long time friend, I was ready. But when my friend insisted on including a third partner, who supposedly was good at marketing to promote our venture, a red flag went up in my head. Why would a small neighborhood bar need a marketing specialist who had no experience in the bar business? But my friend was adamant about his inclusion in our plans and would go ahead whether I came on board or not. So I caved.

            Our first year seemed to go well. My friend and I took care of the daily operations of the bar while our third partner took care of the books and filing all of our taxes.  He gave us quarterly business statements that showed we were doing well and starting to pay off our initial start up loans.

            But as we entered our second year I started to get phone calls at home from some of our vendors saying that our business checks had bounced. As the calls continued I started to go over the books myself before we confronted our third partner. After making good on all of the bounced checks, my original partner and I took control of all of the aspects the business ourselves and turned things around. When we finally broke even at the end of our liquor license, we decided to call it quits. But this is not where the story ends.

            A few years later I went to refinance my house at the credit union to lower my interest rate.  But the credit union informed me that I could not refinance until I took care of an outstanding lien on my house. Going to the county courthouse I found a lien by New York State for unpaid taxes totaling just over seven thousand dollars.  I was being stuck with the entire bill because I was the only one of the three partners that owned property that they could lien against. And although this debt was not solely mine I had to pay the entire bill to remove the lien and avoid eventual foreclose.

            Looking back I realize that I should have paid attention to the original red flag in my head and walked away. This will always be my biggest financial regret.