Dear Dave,

My wife and I are debt-free except for our home. She travels one week per month and charges her expenses to a personal credit card for reimbursement later. I’d rather we open a checking account with debit card privileges just for these expenses. What do you think?

Dustin

Dear Dustin,

I’ve got to say I like your idea better. The problem you’re both facing now is this: if her company ever shuts down, there’s a good chance you guys are stuck with credit card debt.

Years ago I had a client who was working for a company, and he’d run up travel and business expenses on his American Express card. Like your wife’s situation, his company would then reimburse him for expenses. Then, he made a business trip to Europe, and, while he was there, his company asked him to pick up some computer equipment. The cost of the trip and equipment was about $22,000. When he returned to the office with all the computer stuff in tow, the front door was padlocked. The IRS had shut them down, and they went into bankruptcy. And guess what else? He never got the $22,000 from the company!

Credit card companies don’t care about the circumstances. They want their money, period. You guys have done pretty well if you’re debt-free except for your home. But your wife is playing a game called Financial Russian Roulette, and it could backfire on you both at any time.

Never take personal responsibility for company expenses.

—Dave

Trading debt for a career

Dear Dave,

I’m considering a career change and becoming a financial advisor. It would mean a 45 percent cut in salary for three to four years, and I’d have to take on debt in order to survive the cut. Is this a smart move?

Travis

Dear Travis,

No, it’s not. You didn’t give me a lot of details about what kind of “financial advisor” you’re thinking about becoming, but there are all kinds of people who put themselves in the category of financial advisor. A little voice in my head tells me you’re actually talking about life insurance sales. If that’s the case, then there are some things you need to understand. One, you wouldn’t be a financial advisor; you’d be an insurance salesman. And two, there’s about an 80 percent fallout in that world. Eighty percent of the people who start as insurance salesmen don’t make it in that line of work.

Now, you could be making $200,000 right now. And if that were the case, you’d still be making good money while this new career takes root. Still, I’m not going to send you into debt for a career change. There’s got to be a way around that, whether it’s delivering pizzas at night or beginning your career change on a part-time basis before making the jump.

Travis, I want you to live your dream. I also have no qualms about you going into the financial world if it’s what you really want to do with your life. But I’m not going to tell you it’s okay to go tens of thousands—maybe even hundreds of thousands—of dollars into debt to make it happen. Going deeply into debt to become a financial advisor sounds pretty oxymoronic to me. Doesn’t it to you?

Don’t do something really dumb with money in the name of advising other people on their finances. That just seems wrong.

—Dave