Is Your Next Big Investment Also Your Hobby?
I have a hero and you should know her too. Her name is Sandy Schreier and she is one of those sensationally magnetic women who can captivate an entire room with her mere presence. She has a delicious sense of style, business savvy, and she is among the best storytellers that I have ever met. My favorite part though, is that Sandy has been the pioneer of her own life. You see, Sandy loves fashion and her hobby is collecting couture. Her closet is like none other in the world. And that’s not hyperbole.
(Just ask The New York Times.)
Sandy has been collecting couture clothing and famous fashions since she was a little girl and today she has an estimated 15,000 items, including gowns, bags, shoes, lingerie and more that make up her historic collection. She sees clothing as an art form and she dedicates herself to preserving great artistic moments in couture dating back centuries. So many of her dresses have stories themselves. Sandy herself explained, “My childhood hobby has given me an entre into the lives and closets of stars and celebrities. What began as a collection of unwanted and, on occasion, seldom worn couture, has become the largest and best collection in the world.”
However, while Sandy protects her collection with zeal, her hobby/collection has opened the door to a multi-faceted career writing books, articles, speaking engagements and appearing on TV and movies. Sandy is smart and successful and she is the perfect example of how a favorite hobby can sometimes double as a great financial investment and possibly provide cash flow.
I have been meeting more and more women who have a hobby that has evolved into an investment or business opportunity. If you’re thinking about becoming one of them, here are some financial considerations that may help you navigate the next steps.
Seek legal advice
Make sure you have the proper legal entity set up if your hobby turns into a business. Have an attorney draft contracts and review them when dealing with the public or other businesses.
Set Up a Separate Bank Account
It’s best to keep your business revenue source separate from your household checking account.
Hire a CPA
Just like you have your business income kept separate, account for your expenses associated with your business the same way. It makes tax time so much easier!
Make sure you have the proper liability and property casualty insurance in place, particularly if you have collectibles to protect your investment.
I have seen some of these hobbies turn into very successful businesses where now you can consider setting up your own retirement plan and other benefits.