- Variable expenses. All rest of your monthly household expenses, which change some in dollar amount from month to month, such as entertainment, phone expenses, and groceries.

You may need to do some research.

To reveal these expenses may require going through your records. We suggest that you review your cancelled checks for past three months. Make a worksheet with primary expense descriptions. List dollar amount from each check under one of headings. Similarly, examine your past three months of statements from each credit card account you use to pay household expenses.

> Family Balance Sheet

This part of Current Financial Situation worksheet shows two additional aspects of your family financial situation:

- What you owe (debts or liabilities) E.g. Your mortgage loan balance.

- What you own (assets) E.g. Your house, autos, furniture, etc.

Be honest. If you kid yourself about your monthly debt payments before you launch your business, cold, hard reality will only add to your psychological stress later.

> The Business Burden

When you look at your monthly family income, you should consider what will happen financially if you quit your job to pursue your business full-time.

Your expenses will not decrease much, but your income sure will. The difference between family expenses and family income other than yours can be called "business burden." What this means is that unless you want your family's lifestyle to change dramatically, you must produce enough revenue from business to cover shortfall between expenses and other household income.

Every month that you do not produce enough sales to cover this amount, you must borrow to keep family going. This is why I call this "business burden".

Why bring all this up? For one thing, it is interesting to note that Morgan Stanley offered four of these types of funds in October 2000. Just around time when we sold all of our positions (Oct. 13, 2000) and it became clear, at least to those of us who were tracking long-term trends, that a major trend change had taken place.

More recently in news it's been Merrill Lynch who had a questionable deal involving transactions with failed energy trader Enron. Of course, financial services industry regulates itself so well, that an $80 million payment to SEC is sufficient to wrap up this case without admitting or denying wrongdoing.

What's moral of this story? While it is impossible to predict these alleged conflict of interest schemes, it is definitely possible to follow a disciplined approach and be on “right” side of market so you can avoid jumping aboard a sinking ship.