First off, I have to apologize for my absence over the past few months. I started a new position with a fantastic company before New Years and so far it has been an incredible ride! This new role has me travelling quite a bit throughout the week and I’ve been enjoying the challenges and nuances that go along with it! Suffice to say it left me with little to no time for writing (or working out for that matter).
I’ll catch up here in a way to share my thoughts with you around the difference between being devastated financially, and being totally destroyed. There’s a big difference, and I dare say that I once was financially devastated in the past. However at this time of writing, I am enjoying a quite different experience as I am certainly well on my way to FI.
Many of us will certainly experience happenings in life that will no doubt leave a huge mark in your personal finances, and change the course of your direction. This could be the loss of a career in a down market where you’re unemployed for an extended period of time, a sickness that robs you of your health and money, a separation or divorce, the loss of your partner with whom you shared your financial obligations with, selling your home in a soft economy. While most of these seem negative, quite the opposite can still be devastating such as the addition of a new child to the family, relocating to a new city for school or work, starting a new business, etc.
Devastation in your finances is certainly unfortunate and often feels unbearable but in most cases is not permanent and can be overcome. To be devastated means that your current financial plans, and goals have been interrupted, and your savings, investments, and net worth has been negatively impacted as a result. The emotional toll it can and will take on you feels as though you’ll never be able to recover but in fact you can and you likely will recover and be even better off than before. Something incredible happens inside you when you’re current paradigm shifts and you’re forced with a new uncomfortable reality! Your focus becomes sharp, you become more aware of your surroundings, and many times you start to see and appreciate life with a whole new perspective. The comforts and the status quo that you once took for granted are gone, and you’ve shifted from maintenance mode to survival mode.
Devastation will likely happen in your life so it’s not a matter of if it will happen but rather when. The more you’re prepared for a change in your life to take shape, the less devastating the change will be. Personally, I wasn’t prepared for a major devastation to take place over a decade ago where I lost over half of my net worth in a botched business sale where my partner and I eventually had to walk away after suffering major losses for many consecutive months. The impact and sting lingered for a very long time and just when I thought I had gotten over it and moved on with my life, another devastation occurred!
I also owned two franchise restaurant locations and had sold them just after I had folded my business. Unfortunately the new buyers who bought the locations from me turned out to be quite negligent absentee operators. Never spending much time in the restaurants, the businesses suffered and were not held up to their corporate standards. The owners were often in default of their franchise agreement, and after many warnings and notices to remedy the situation, their agreement was terminated. Being terminated from your franchise agreement means losing your business entirely! You’re literally locked out of your own business overnight! There’s alot of ramifications to this, but no doubt there were huge financial loses they incurred as a result. What was their response? They sued the franchise head office for loses suffered in the amount of $750,000, and head office as a result counter sued. As a result, I was included in the lawsuit because franchise head office never released me from my personal guarantees during the sale of the businesses to the new owners….. stupid stupid stupid!!! (Not for a lack of trying, rather they weren’t confident with who the new owners were that they wanted to see what they would be like first before they released me, and the rest is history!)
Being sued for a substantial amount of money like this for something that you’ve not even been apart of but rather guilty by association is sickening! It’s the worst feeling and hard to describe to you, especially after I poured my heart into the businesses when I owned them and gave franchise head office hundreds of thousands of dollars, always on time, and without so much as a thank you or a free lunch! That’s the thing about life, business, and finances… it doesn’t care how you feel. Which is exactly why you need to be prepared!!! You need to be ready and assume that the worst could happen and so if or when it does happen, it won’t ruin you!
I was utterly devastated twice over by now!!!!! And as if things weren’t bad enough, just two years after this took place, I received more devastating news that a condo I owned was being assessed for water damage. I thought to myself, how is this possible? It’s only 7 years old and it still looked brand new! Apparently it turns out that 7 year old condo’s can have $4 million dollars worth of water damage!!!!!!! Turns out my share was a paltry $78,000!!! If you have ever been in this situation, you already know that there’s no getting out of this. You either foreclose on the property and the bank sues you for any amount still owing to cover the remaining mortgage, or you come up with the cash and pay! Needless to say, I paid the $78,000 (of which I had not planned for a $78,000 rainy day) and rented the condo out to a relative during the construction while they replaced the entire building envelope. This has been three years ago already and this is still in the courts where us condo owners are trying to recover the damages from the insurance company and the general contractor and sub contractors who were responsible for not building the building envelope up to the proper specifications and codes.
VERSION 4.0. Having been through three different major devastating events like this, it’s a miracle that I never ended up giving up on my financial goals, packing up my life and heading for peace and calm where nobody can find me, sue me, or hurt me. I can’t really speak to what gave me the drive to go forward only that admittedly each of these circumstances were in fact devastating but they didn’t destroy me!
Destruction is final. Once something is destroyed, it no longer exists as it once was and therefore it cannot be salvaged.
Fast forward to today and I’m once again happily engaged in my financial goals and far better prepared for the next surprise life has in store for me. At only 40 years young, I’ve encountered substantial losses so much so that many people as a result would have lost their guts, drive, and ambition towards their financial goals, and settle to a more comfortable path with less potential friction. I will say that one thing is for sure, that each of these experiences gave me more perspective, knowledge, forsight, and maturity in my planing and approach. My goals became more practical and the steps I needed to take in order to achieve them became more defined.
I also changed my objectives and goals and as such the way I approached my goals was completely different than once before. I took on a tortoise wins the race approach and adopted slow but steady methods in my plans that were sure to move me forward to my goals regardless of the circumstances around me. Building a sound financial plan is critical in enabling you to become financially secure. It means that you’re still secure even when life throws you in a tumble. The other lesson I learned is that it’s NEVER TOO LATE!
Send me a line, I’d love to hear from you! Good luck on your journey and grow from your experiences!
Onwards and Upwards!
READY AIM FI!
