MONEY Ask the Expert

How to Know When Your Car is Really a Lemon

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Robert A. Di Ieso, Jr.

Q. My new car has been in the shop for a month. Will a “lemon law” be of help? — Mark Wisner, Morrisville, N.C.

A. Assuming your car is deemed a lemon, you’re entitled to—your choice—either a replacement car or a purchase price refund (see below). The definition of “lemon” varies by state; in your home of North Carolina, a car qualifies if it has been out of service for a total of 20 business days over 12 months or has been ­repaired for the same problem at least four times. The car must have fewer than 24,000 miles on it and be less than 24 months old.

Before submitting a claim, notify the manufacturer in writing of the problem (via certified mail) and give the company a reasonable chance to fix it, says Rosemary Shahan, president of Consumers for Auto Reliability and Safety. Check your state attorney general’s office for details, and carefully document your complaints and attempted repairs.

LEMON LAW

MONEY Estate Planning

What Parents Can Learn From Philip Seymour Hoffman’s Will

When it comes to deciding who inherits what, the law gives the dead wide latitude to impose a number of conditions.

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On Tuesday, the will of Oscar-winning actor Phillip Seymour Hoffman was released to the public. In addition to dictating who would receive various parts of his estate, the document also contained a more esoteric request: that his son, Cooper, be raised in one of three cities—New York, Chicago, or San Francisco—to ensure that he would grow up in a rich cultural environment.

It’s an understandable request (and as a New Yorker, I’m flattered we made the list), but is it really legal to dictate where your children grow up after you’ve already passed on? And, more broadly, to what extent can one control their descendants’ actions post-mortem?

By law, Hoffman could not have ordered his child’s guardian to keep Cooper in a particular place. Gerry W. Beyer, a professor at Texas Tech University School of Law, explains that wills can do no more than transfer property from the deceased to their survivors. That said, there there are plenty of ways the dead can use property to encourage (or, some might say, coerce) descendants into living a certain kind of life.

If you want to influence your survivors to do something—finish college, go to mass, take good care of Fido, etc.—the best way to do it is to promise them money on the condition they fulfill your request. For example, if you want to make sure your son takes his education seriously, you can leave him $10,000 on the condition he is admitted to a top-ranked college. If Junior knows too many late homework assignments could mean missing out on a huge payday, he’s probably going to hit the books.

Because the deceased have no obligation to give away anything after death, courts tend to give them wide latitude in how their wealth is distributed. The only clear restriction is that inheritance cannot be conditioned on an illegal act (kill the neighbor and you’ll get my car). Otherwise, the condition must simply avoid acting against “public policy”—it can’t encourage something the state doesn’t like—and defining what that includes is almost entirely up to an individual judge.

Ample room for interpretation can sometimes lead to controversial verdicts. In a landmark 2009 ruling, a judge upheld the will of a Chicago dentist that denied funds to any of his grandchildren who married a non-Jew. Various family members sued, arguing the clause provided monetary incentive towards racism. “It is at war with society’s interest in eliminating bigotry and prejudice, and conflicts with modern moral standards of religious tolerance,” one (disinherited) granddaughter wrote in a brief to the Illinois Supreme Court. The verdict? Too bad. The judge found no reason why her grandfather could not choose to favor those descendants who followed his religious traditions.

According to Beyer, this type of decision isn’t uncommon. “This is something the court is doing in its equitable powers,” says the professor. “You can even find similar cases in the same state that go different ways.”

Highlighting this issue, the Supreme Court of Pennsylvania had previously ruled against a different will that also attempted to mandate religious observance. In that case, the document required a son to “remain faithful” to his father’s religion in order to receive any money. Unlike the Illinois case, this court found that the will contradicted the state’s Bill of Rights, which declared no human authority could interfere with acts of conscience. Does that sound inconsistent? Now you’re getting the hang of it.

Luckily, there are some relatively standard limits to what strings one can attach to their will. Beyer advises that courts will often use public policy arguments to deny provisions that are “manifestly unfair or unreasonable.” For example, a provision that would grant a woman money for divorcing her husband would be ruled invalid.

However, when it comes to the more contentious issues, there’s no telling how a case will turn out. Hoffman graciously chose to merely suggest that Cooper be raised in a cultural center, leaving the final decision completely up to Mimi O’Donnell, the mother of his children and inheritor of his estate. However, had Hoffman chosen to stake O’Donnell’s inheritance on keeping his son in a major city, Beyer says, the outcome would depend on the relevant court’s prerogative.

“Where you draw the line can be kind of fuzzy,” Beyer says. “People have done a lot of strange things.”

MONEY Estate Planning

WATCH: Why Philip Seymour Hoffman Didn’t Leave Money to His Children

Hoffman is just one of many wealthy celebrities and businesspeople who have decided against leaving trust funds for their children.

MONEY Financial Planning

The One Time Raiding Your Kid’s College Savings Makes Sense

Broken money jar
Normally, breaking into your college savings accounts is a no-no. Jeffrey Coolidge—Getty Images

It's never a great idea, but in an emergency tapping funds earmarked for education beats sabotaging your retirement plans.

Lauren Greutman felt sick.

She and her husband Mark were about $40,000 in debt, and were having trouble paying their monthly bills. As recent homebuyers, the Syracuse, N.Y. couple were already underwater on their mortgage and getting by on one income as Lauren focused on being a stay-at-home mom.

“We were in a really bad financial position, and just didn’t have the money to make ends meet,” remembers Greutman, now 33 and a mom of four.

There was one pot of money just sitting there: their son’s college savings, about $6,500 at the time. That is when they had to make a tough decision.

“We had to pull money out of the account,” she says. “We thought long and hard about it and felt almost dishonest. But it was either leave it in there, or pay the mortgage and be able to eat.”

It is a quandary faced by parents in dire financial straits: Should you treat your kids’ college savings—often housed in so-called 529 plans—as a sacred lockbox, or as a ready source of funds that may be tapped when necessary.

Precise figures are not available, since those making 529-plan withdrawals do not have to tell administrators whether or not the funds are being used for qualified higher education expenses, according to the College Savings Plans Network. That is a matter between the account owner and the Internal Revenue Service.

TIAA-CREF, which administrates many 529 plans for states, estimates that between 10% to 20% of plan withdrawals are non-qualified and not being used for their intended purpose of covering educational expenses.

It is never a first option to draw college money down early, of course. Private four-year colleges cost an average of $30,094 in tuition and fees for 2013/14, according to the College Board. Since that number will presumably rise much more by the time your toddler graduates from high school, parents need to be stocking those financial cupboards rather than emptying them out.

Joe Hurley, founder of Savingforcollege.com, has a message for stressed-out parents: Don’t beat yourselves up about it.

“The plans were designed to give account owners flexible access to their funds,” Hurley says. “I imagine parents would feel some guilt. But I don’t think they should. After all, it is their money.”

Why the Alternative Might Be Worse

Keep in mind that there are often significant financial penalties involved. With non-qualified distributions from a 529 plan, in most cases you are looking at a 10% penalty on the earnings. Withdrawn earnings will also be treated as income on your tax return, and if you took a state tax deduction on the original investment, withdrawn contributions often count as income as well.

Not ideal, of course. But if your other option for emergency funds is to raid your own retirement accounts, tapping college savings is a last-ditch avenue to consider. That’s not only because you do not want to blow up your own nest egg, but because it could make relative sense tax-wise. And as the saying goes, you can borrow money for college, but not for retirement.

“If you think about it, a parent who has a choice between tapping the 529 and tapping a retirement account might be better off tapping the 529,” says James Kinney, a planner with Financial Pathway Advisors in Bridgewater, N.J.

If the account is comprised of 30% earnings, then only 30% would be subject to tax and penalty, Kinney explains. And that compares favorably to a premature distribution from a 401(k) or IRA, where 100% of the distribution will be subject to taxes plus a penalty.

Lauren Greutman’s story has a happy ending. She and her husband made a pledge to restock their son’s college savings as soon as they were financially able. It is a pledge they kept: Now eight-years-old, their son has a healthy $12,000 growing in his account.

She even runs a site about budgeting and frugal living at iamthatlady.com. Still, the wrenching decision to tap college savings certainly was not easy—especially since other family members had contributed to that account.

“We tried to take emotion out of it, even though we felt so bad,” Greutman says. “Since we didn’t have money for groceries at that point, we knew our family would understand.”

Related: 4 Reasons You Shouldn’t Be Saving for College Just Yet

MONEY Health Care

4 Really Weird Things About the Latest Obamacare Ruling

U.S. President Barack Obama (L) walks out next to Vice President Joseph Biden
Obama's signature health-care law faces a new court challenge. Larry Downing—Reuters

An appeals court says Congress must have meant to make the health care law even more complicated than we thought.

Today two separate appeals courts handed down decisions on challenges to the Affordable Care Act, known popularly as Obamacare. One of those courts, a three-judge panel of the U.S. Court of Appeals for the D.C. Circuit, ruled that the federal government can’t provide insurance premium subsidies to people in states that haven’t set up their own insurance exchanges. The other court rejected that argument.

The D.C. circuit’s opinion, which would invalidate the subsidies paid to about 5 million people, will be a huge, huge deal if it holds up. Much of the early debate and legal wrangling over the ACA focused on the “individual mandate,” the part of law that fines you if you don’t have health coverage. But the subsidies are even more important because they make the required coverage affordable for moderate- to middle-income families. (The subsidies are available to a family of four earning up to $95,400.) The law says you don’t have to pay the fine if insurance isn’t affordable, so without the subsidies the mandate doesn’t apply to so many people.

The ruling could very well be overturned on appeal, and in the meantime the subsidies remain in place. (You can read more on what happens next in this report by Time’s Kate Pickert.) But as a reporter who has covered health care reform closely since the George W. Bush administration, I have to say this ruling just doesn’t make much sense to me. In particular, four very odd things stand out.

1. The court’s interpretation seems implausible.

Quick background: Obamacare subsidies are issued when you buy insurance on an online marketplace called an exchange. Some states set up their own exchanges, but 36 states didn’t, leaving the federal government to do the job instead. The D.C. Circuit ruled that the law authorizes the subsidies to be paid only through state-run exchanges.

This ruling hinges on a close reading of the law, a purported effort to figure out what Congress truly intended. The government, defending Obamacare, argued that because the law can’t work without the premium subsidies, Congress must have meant them to apply regardless of who ran the exchange.

But the court offered another theory: Maybe Congress meant the subsidies to be an incentive for states to set up their own exchanges.

That sounds like a implausibly flexible approach to what was meant to be a sweeping national health care law. After all, it essentially gives any state whose governor or legislature opposes the ACA a chance to opt out of some its biggest provisions—not just the subsidies, but the individual mandate, too.

Cast your mind back to the debate in 2009 and 2010. What I remember was conservatives denying the ACA a single Republican vote and arguing that Democrats would brook no compromise. Democrats, meanwhile, were pointing out that Obamacare looked a lot like the Massachusetts law signed by Republican governor Mitt Romney.

It seems to me that in a long argument over whether Obama and Nancy Pelosi and Max Baucus were tyrants, or just sweetly reasonable splitters-of-the-difference, someone might have said: “Hey, if Republican-led states don’t like the individual mandate, they can always opt out of the exchanges.”

That did not happen.

2. If the ruling stands, this messes up the insurance markets in 36 states.

If there are no subsidies, that doesn’t only mean that many people won’t get help from the government to buy coverage. Even those who didn’t get the subsidies in the first place could face higher prices.

That’s because the law requires the exchanges to sell insurance to everyone who applies, charge them the same rates (based on age) regardless of health, and offer a minimum package of benefits. The problem is that if you don’t have to buy insurance, many people will do so only when they know they need coverage—i.e., when they are sick. And if too few healthy people and too many sick people sign up, insurers have to raise prices to cover the costs. That then means you have to really sick to want to sign up, and that jacks up rates more, and so on. This is known in insurance as adverse selection, or a “death spiral.”

So the federal exchanges could stop working pretty quickly if this ruling stands. In fact, according to the briefs filed by the insurance industry and a group of economists who support the ACA, the adverse selection problem in the exchanges could spill over into the market for private individual plans outside the exchange too, since the law links the two markets in various way. How this would actually play out is unclear, but suffice it say, it’s a major rug-pulling.

Setting up federal exchanges that can’t work seems pretty dumb. Now, as Michael Cannon of the libertarian Cato Institute says, it’s not like lawmakers never make bad laws. States have tried to regulate insurance coverage the way the ACA does, without subsidies, and they’ve run into all these adverse selection problems. The thing is, people in Washington knew this when the ACA was being debated and written. It’s why the subsidies and the individual mandate—a wildly controversial, politically costly provision that many members of Congress wished would go away—were in the law in the first place.

3. This somehow involves the Northern Mariana Islands.

The D.C. Circuit panel notes that the ACA in fact did trigger the “death spiral” problem in this U.S. overseas territory in the Pacific. That’s because the Northern Mariana Islands were subject to the new rules about health coverage but left out of the subsidies. That, says the court, means that maybe Congress really could have meant to regulate the insurance market without subsidizing it too.

I can think of some other reasons why Congress might have klutzed up the part the law that applies to U.S. territories. Like the fact that people in those places have no voting representation in Congress.

4. Congress really isn’t very good at crafting laws

I don’t mean it’s not good at making laws (views may vary on that). I’m talking about the actual writing-it-down part. The court’s lead opinion is devastating in showing how badly written parts of the law are. If these were comments from the professor in a course titled “Lawmaking 101: Making a Bill a Law,” you’d expect to see a big fat red “D” at the bottom of Congress’ term paper. The bill was pushed through hastily after Republican Scott Brown unexpectedly won the late Ted Kennedy’s seat in the Senate, depriving the Democrats of a filibuster-proof majority. The craziness of the legislative process shows in the text.

But its not just a craft problem. The legal vulnerability of the ACA goes hand-in-hand with how politically vulnerable it is. The law makes sense in a basic way and seems to be helping more people get coverage. And polls say people like many of the provisions of the law. But it is also complicated, and hinges on many different players (states, employers, private insurers, Medicare, Medicaid, you and me…) interacting in predictable and not-so-predictable ways. From the beginning, many people have really struggled to get how the law fits together. Turns out that may have included some people in Congress.

MONEY Careers

How to Convert a Summer Internship Into a Full-Time Job

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Many companies use internships and temp gigs to find full-time workers. mediaphotos—Getty Images

Start laying the groundwork now for your first step into the working world, says career coach Caroline Ceniza-Levine.

Now that we’re past the mid-point of summer, it’s time to start planning how to turn that summer placement into a full-time stay. (Parents of summer interns, talk to your kids about this now!)

Even those who are interning just to experiment with the field should still act as if they want a full-time job. This way, if you do decide you like it there, you will have done your best to land an offer; if it turns out you don’t want to continue, you’ll be poised for a great reference elsewhere.

Here are five steps to take to position yourself for an offer at the end of your internship. These tips also apply to temporary staff looking to become permanent, as well.

1. Focus on the job you have. When I ran internship programs and temp/ freelance placement, I would always see a handful of hires who were so focused on converting to a permanent job that they spent more time lobbying for their next placement than focusing on the one they had. This is a big mistake. If you can’t do what’s already given to you, you won’t get more (and for the worst offenders, you might find yourself with an earlier end date). You must willingly, excitedly, and accurately do what is asked of you. You always volunteer for more and become known for being a generous, collaborative team player. You double-check your work and earn a reputation of being someone who minds the details. You get the job done, and people see that you always complete your work on time—or even early. You do your job well, so that another one (perhaps that permanent offer) is waiting in the wings for you at the end of your current placement.

2. Confirm the process. While your current job is priority numero uno, you still want to pay attention to next steps—that is, how does conversion to a full-time offer actually work at this firm. Many companies use their internship program and their temporary hiring as an entry point to full-time employment. Employers take it as a positive sign of interest when you inquire about the steps you need to take to be considered for full-time employment. Some companies have a formalized process, including a mid-internship and/or end-of-internship evaluation. Ask for this evaluation form— you want to know the criteria you will be judged on. If the process is more informal, ask your manager or the HR person who hired you what they would recommend you do—perhaps they’ll say to check in a few weeks before your end date or simply to submit for posted jobs on the company site.

3. Get regular feedback. Even if your company offers a structured evaluation process, you need to ask for regular feedback. Don’t wait for the middle of your internship or temp assignment either; ask for a weekly review of how you’re doing, especially in the first few weeks of your stay. You don’t know the company or your manager well enough to accurately gauge performance expectations. Asking for direct and candid feedback will ensure you can nip any problems in the bud. Even if you’re doing a great job, feedback is essential so you can do more of whatever it is that your manager thinks highly of. You also line up evidence of good performance for when you ask for that full-time job later on.

4. Attend company-wide events (or make your own). Make an effort to meet people outside your immediate department. You might love your group and they might want to hire you, but what if there is no full-time position there? Many companies organize internship programming, which may include networking events to mingle with people from around the company or panel discussions that feature senior management or even new hires. If you’re temping, pay attention to any company-wide town halls or mixers you can attend. If none of these events are offered, ask your manager if you can be introduced to different parts of the company so that you can learn more. If you’re doing a great job, your manager will appreciate your interest.

5. Ask for the job. As you near the end of your short-term stay, tell your manager and/or HR contact that you’re interested in a full-time position (remember to confirm the process so that you know exactly whom to ask and when). People are busy, and if there is no formal process, they may dilly dally on what needs to be done to extend your time there. For students who won’t be taking full-time jobs till after the next academic semester or year, the company may overlook putting you in the system or confirming an offer for after you graduate. Sure, you can negotiate a full-time offer and process the details after you leave, but it’s so much easier and more seamless while you’re already in the company. You’re front of mind. You’re already in the payroll system. Don’t just leave before trying to finalize the conversion to full-time.

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Caroline Ceniza-Levine is co-founder of SixFigureStart®career coaching. She has worked with professionals from American Express, Condé Nast, Gilt, Goldman Sachs, Google, McKinsey, and other leading firms. She’s also a stand-up comic. This column will appear weekly.

Read more from Caroline Ceniza-Levine:

How to Network in Just 5 Minutes a Day

How Making a Friend in HR Can Help Your Career

10 Easy Ways to Make Yourself More Hireable

Your Career is Your Biggest Asset. 5 Ways to Protect It

MONEY Health Care

Court Ruling Puts a Key Provision of Obamacare in Doubt—For Now

U.S. President Barack Obama (L) walks out next to Vice President Joseph Biden.
Today's D.C. court ruling dealt a blow to Obama's signature legislative achievement, while another set of judges backed the president. Larry Downing—Reuters

A federal appeals court has struck down the premium subsidies offered on the federal insurance exchange, potentially undermining a major provision of the law and raising costs for millions of Americans. With another court upholding the law, more court battles lie ahead.

A three-judge panel at the U.S. Appeals Court for the D.C. Circuit threw the fate of an important part of the Affordable Care Act into doubt Tuesday. In a 2-1 decision in Halbig v. Burwell, the judges ruled that the Internal Revenue Service lacked the authority to allow subsidies to be provided in exchanges not run by the states. That could put at immediate risk the millions of people who bought insurance in the 36 states where these online insurance marketplaces are run by the federal government.

“Because we conclude that the ACA unambiguously restricts the section 36B subsidy to insurance purchased on the Exchanges ‘established by the state,’ we reverse the district court and vacate the IRS’s regulation,” said the decision by Judge Thomas Griffith.

Meanwhile, just an hour later, another three-judge panel on the 4th Circuit Court of Appeals in Richmond, Va., came to the opposite conclusion—upholding the federal subsidies.
“It is therefore clear that widely available tax credits are essential to fulfilling the Act’s primary goals and that Congress was aware of their importance when drafting the bill,” said the decision written by Judge Roger Gregory.

The Obama administration said it will appeal the Halbig decision. The Justice Department will ask the entire appeals court panel to review the decision, and that panel is dominated by judges appointed by Democrats, 7-4. The issue is also in other courts around the country.

White House spokesman Josh Earnest said: “There’s a lot of high-minded case law that’s applied here. There’s also an element of common sense that should be applied as well, which is that you don’t need a fancy legal degree to understand that Congress intended for every eligible American to have access to tax credits that would lower their health care costs, regardless of whether it was state officials or federal officials who were running the marketplace.”

‘’We believe that this decision is incorrect, inconsistent with Congressional intent, different from previous rulings, and at odds with the goal of the law: to make health care affordable no matter where people live. The government will therefore immediately seek further review of the court’s decision,” said a statement from the Justice Department.

Meanwhile, Elizabeth Wydra, chief counsel for the Constitutional Accountability Center, said the ruling wouldn’t take effect right away. “The court’s rules are that it doesn’t happen for 45 days,” to give the government time to ask for a full en banc hearing, “or 7 days after the en banc hearing has been denied.”

Should the decision eventually stand, however, it could mean at least five million Americans would face an average premium increase of 76%, according to a projection done by the consulting firm Avalere Health.

The court said that the wording of the health law “plainly makes subsidies available only on Exchanges established by states,” and that the legislative history of the bill “provides little indication one way or the other of congressional intent.”

But Judge A. Raymond Randolph offered a strong dissent. “It makes little sense to think that Congress would have imposed so substantial a condition in such an oblique and circuitous manner.”

The case could end up in the Supreme Court.

Kaiser Health News is an editorially independent program of the Henry J. Kaiser Family Foundation, a nonprofit, nonpartisan health policy research and communication organization not affiliated with Kaiser Permanente.

TIME Health Care

What the New Obamacare Court Decisions Mean for You

U.S. President Barack Obama speaks before signing the H.R. 803, the Workforce Innovation and Opportunity Act. during an event in the Eisonhower Executive Building, July 22, 2014 in Washington, DC.
U.S. President Barack Obama speaks before signing the H.R. 803, the Workforce Innovation and Opportunity Act. during an event in the Eisonhower Executive Building, July 22, 2014 in Washington, DC. Mark Wilson—Getty Images

Two federal courts, two conflicted rulings. What does it all mean?

On Tuesday, two federal courts issued rulings on President Obama’s healthcare law. Here’s what you need to know about how the rulings affect you:

What did the courts say?

A panel in the D.C. Circuit Court of Appeals ruled that the Affordable Care Act (ACA) does not allow the federal government to distribute insurance subsidies through a federal exchange being used in 36 states. Many states declined to set up their own insurance exchanges, forcing the federal government to set up its own central exchange where subsidized plans are sold. The D.C. court said that only people living in those states with their own exchanges are eligible for federal subsidies, due to ambiguities in the language of the ACA.

But in the Fourth Circuit Court of Appeals, judges reached the opposite conclusion. That panel ruled that the federal government does have the authority to hand out insurance subsidies through the federal exchange, and always intended subsidies to be available to any eligible individual in the U.S., regardless of who is running the exchange.

What happens next?

The federal government will appeal the D.C. court ruling and plaintiffs in the identical case in the Fourth Circuit will also likely appeal. The issue is likely to remain unsettled for many months.

What does this mean for Americans currently getting insurance through the ACA?

Nothing yet. With conflicting rulings on the same day and appeals certain, the status quo will remain in place — for now.

But if the D.C. ruling ends up being upheld and the Fourth Circuit overturned, the consequences would be immense. By 2016, more than 7 million people are set to receive ACA insurance subsidies through the federal exchange at the center of each of Tuesday’s rulings. These subsidies are now under threat, and could disappear in those 36 states if the D.C. ruling is upheld on appeal.

Without subsidies, millions in those states could see their insurance premiums go up dramatically. The ACA requires most Americans to have health insurance but only if they can afford it. Without subsidies, coverage for millions would become unaffordable. Removing these people from the health insurance pool could destabilize premiums for everyone else.

What would that mean for Obamacare?

It would be a hammer blow, if the D.C. ruling stands. The government would no longer be able to distribute insurance subsidies in those 36 states, unless those states opted to set up their own exchanges. That would be unlikely, since many of the states that declined to set up exchanges did so in protest at the ACA. The subsidy system is a central feature of Obamacare and Democrats’ plan to expand insurance coverage to low- and middle-income Americans.

Opponents of the law have sued over the ACA before. What makes this case different?

A ruling that threatens to strip insurance subsidies from millions of Americans is the most significant threat to Obamacare since it overcame the challenge to its constitutionality in the U.S. Supreme Court in 2012 — though that same ruling made its Medicaid expansion optional and not mandatory, blocking millions of low-income Americans from coverage. Legal arguments made against Obamacare since have not struck at the heart of the law’s goal of expanding coverage. The recent Hobby Lobby lawsuit, for example, only affected contraception coverage for some employer health plans.

MONEY Small Business

The 4 Essential Traits You Need to Build Your Own Business

It's not enough to want to be your own boss. The founder of an advertising company explains the key qualities that go into being a successful entrepreneur.

Many people aspire to become entrepreneurs, but it’s not something that just anyone can do. To actually succeed you need more than a desire to make money or be your own boss. You need certain qualities.

Soon after I started my own business, Fortune Cookie Advertising, I began to identify crucial qualities that were fundamental if I wanted to succeed. While I had all of these four traits to some degree at the outset, I also had to consciously develop them over time.

1. A Clear Vision

This is the foundation of your business. Your vision may be based on a product, a service, or simply the desire to solve a problem for your customers. This is the “why” of your endeavor, and it must be relevant to the people you will be serving.

That’s why it’s not enough to want to be independent—your customers or clients don’t care about this. They care about your vision, which could be anything from wanting to build the most advanced computer operating system to wanting to find a fast way to deliver flowers around the globe.

Your vision may change, expand, or narrow over time, but you need to have one when you start. In my business, I started with the vision of being able to provide advertisers with an innovative way to get their message out.

2. The Ability to (Quickly) Pitch Your Business

If your business is straightforward, like selling books or changing the oil in people’s cars, it’s easy to explain. But some products and services are more technical or abstract. No matter what kind of business you decide to run, however, you should be able to describe it to prospective customers, investors, or even friends and family members in a few short sentences.

If this isn’t your strong suit, you might want to study the art of the pitch in terms of the movies. A screenwriter must be able to sell his or her idea to a busy and skeptical producer in a few minutes. Any new business owner should have the same ability. It shows that you not only know your business well, but can convince others of its value in language they can easily understand.

3. Persistence

Many of the most successful entrepreneurs in history failed at their first (and in some cases second, third, or more) businesses. Notable examples include Harland Sanders, founder of Kentucky Fried Chicken, Richard Branson of Virgin Atlantic, and even Bill Gates.

But perhaps the most famous example in history is Thomas Edison and his many attempts to design the light bulb. The quote “I have not failed. I’ve just found 10,000 ways that won’t work” is often attributed to him. Hopefully, you won’t have to be quite as persistent as Edison, but the principle is the same. Many new ventures fail or experience setbacks, but you cannot let this stop you from trying over and over again until you devise the formula that works—you won’t get paid if you don’t.

At one point in our business, a computer failure resulted in the loss of hundreds of names of contacts, including customers and prospects. This data, of course, should have been backed up, but I had not gotten around to doing this. So my team and I had to manually rebuild the entire list. It was a painstaking process, but we recovered everything, and I learned a valuable lesson: Always back up!

4. Focus

This last quality is one that entrepreneurs need in abundant supply. You need to be able to see a project from inception to completion while overcoming distractions. You must be able to prioritize, set your own schedule, and meet your own deadlines. For people accustomed to having their tasks assigned to them by employers, parents, drill sergeants, or professors, this is a big change.

When I first started my business, it took me a few months to understand this. At first, I made elaborate schedules and to-do lists to keep myself on track. I still do that to some extent, but now it’s more internalized as I’ve gotten comfortable in the role of entrepreneur.

Almost everyone like the idea of being independent—in theory. The freedom to be one’s own boss is one of the most desirable things about starting a business. But only you can decide if you are focused enough to do it.

Shawn Porat is the CEO of Fortune Cookie Advertising, a media placement company selling advertising space within fortune cookies at Chinese restaurants throughout the United States.

Young Entrepreneur Council (YEC) is an invite-only organization comprised of the world’s most promising young entrepreneurs. In partnership with Citi, YEC recently launched StartupCollective, a free virtual mentorship program that helps millions of entrepreneurs start and grow businesses.

More from the YEC:

MONEY Health Care

Why Your Spouse Could Start Costing You More At Work

Wedding rings with health cross on them
Burazin—Getty Images

As health care costs climb, firms are rethinking how much they should spend on coverage for their workers’ husbands and wives.

Q. I hear my company will start charging even more for my spouse to sign up for my health insurance. Why is that?

A. This summer, companies are busy choosing health plans for 2015. And the discussions in the boardrooms are about as heated as the air outside the office, according to Randall Abbott, a senior consultant with Towers Watson. Abbott has been in nearly a dozen meetings in the past three weeks that have addressed one particularly fraught topic: how much companies shell out for health care for their workers’ spouses.

Struggling to rein in health care spending and worried about having exceptionally rich benefits that trigger Obamacare’s so-called Cadillac tax in a few years, businesses are looking for ways to pare back insurance costs. And spousal coverage is often floated as a possible cutback, Abbott says. Many firms have figured out that they spend at least as much—and often more—on coverage for spouses than they do on the workers themselves, so they are rethinking the approach to coverage.

That could mean a higher health insurance premium next year. Just how much higher won’t be clear until this fall, when you sign up for next year’s plan.

“It is a very charged topic,” says Abbott. “Many organizations have prided themselves on being family friendly, and they talk about their employees and family as part of the corporate family, but actions like this are starting to restate the deal between employers, employees, and family members.”

Businesses are not required to offer coverage to spouses—though most large firms do.

Many companies have already been passing on higher costs, hoping spouses will think twice before jumping onto the employee’s plan. This year, half of firms with more than 1,000 workers had spouses pay more for their health premium than workers do, according to Towers Watson’s research.

One-quarter of large firms charge spouses more for coverage when they have access to employer-sponsored coverage at their own job but turn it down. Another 15% plan to go that route in 2015. How much more? On average, couples pay an extra $1,200 a year.

“We think the surcharge will grow not necessarily because all employers think it is a great idea, but it almost becomes a defensive measure to make sure your plan doesn’t become a dumping ground for spouses,” says Abbott.

Some employers require spouses with other coverage options to sign up for that employer plan. Ten percent of firms used that strategy this year, and 13% plan to add the rule next year.

Of course it isn’t always possible for a firm to know if a spouse has access to an employer-sponsored plan through his or her own job. “It is generally done on the honor system,” says Abbott. But if your spouse submits a claim, that may offer clues. For example, a work-related accident might reveal that he or she works at a large firm, where benefits are typically offered.

Only 2% of large companies have stopped paying any of the premium for spousal coverage.

While most of the attention so far has been on partners and spouses, employers are also eyeing what they spend on coverage for workers’ children. Previously most large firms had two rates: individual and family. Now the lineup at most companies includes an individual, couple, and family rate. A few even go as far as to base your premium on the number of children in your family. “This has become one more plan feature that is enormously important for employees and their spouses to understand,” Abbott says.

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