What do you do when you find yourself downsized at work and you have too much house and a driveway full of toys you can’t afford? Well, it’s never too late to start over, right? People do it all the time. And I really want to help you with that. I was in that situation 10 years ago and it was the absolute worst feeling ever. I started that story a couple of days ago, and I’m going to finish it. Promise. First, let’s talk to the folks that haven’t dug a hole so deep (if you’re in that hole, I suggest you get rid of the shovel now; we’ll address your situation another time) they can’t get out.
First of all, acknowledge you’re going to have to make some big changes that might not be too popular with the family. I would start with those toys. Sell em. If you owe more than they’re worth, take them back. Hopefully you can make a deal with whoever you bought them from to pay off the negative over time. With any luck, you can find somebody else to take over payments on you motorhome, jet skis, and motorcycles. While you’re at it, you might want to check on the value of your home. Do you really need all that room? Afraid what everyone will think? It’s more embarrassing to have the repo man drive away in your Class A motorhome. Trust me, I may or may not have knowledge about that; not a motorhome, but maybe a car.
Don’t be confused; this plan has nothing to do with paying down debt, it has everything to do with eliminating debt. In other words, you’re going to do a debt cleansing. Or a debt enema. If you truly want to fix your situation, you have to accept that you screwed up. You went and lived the American dream like every other dummy out there. And now it’s time to fix it. And you can do it; i know you can. I believe in you.
You see, I have a theory; you don’t deserve all the crap you own right now. If you did, you wouldn’t be in the position you’re in. Someday when you’re older and more responsible, you’ll be able to get all that stuff back. But you won’t do it; nope, you’ll do what the rest of us apartment owning (no partners, no syndications) conservative types do. What do we do you ask? First off, when it comes time to move up to the bigger house, we buy a 4 unit apartment complex. When we have our debt ratio on that building down to 50% (thats how much debt you have compared to what you owe), its time to go shopping for a boat. Not just any boat, but the bass boat of your dreams. I want you to look at them, research them, figure out what kind of gear you’re going to get, and the truck to pull it with (you’re driving an older Toyota pickup now. Cheap to fix, and you can haul all the stuff you need to do repairs on your units). After you’ve done all the prep and research (that’s the fun part for us guys), buy the 4 unit next door to the one you already own. Keep all the boat and truck brochures, you may need them someday. Trust me, one of your buddies will get a boat, you can go fishing with him.
Heres the thing guys and gals; once you start down the road of financial debt cleansing, you’re going to enjoy the saving and investing game a lot more than the spending one. We spend because we’re insecure (a whole ‘nother story). Once you remove the insecurity (ridiculous amounts of debt for stuff you don’t have time to use), you get this amazing new feeling; a feeling like no other. It’s called pride. Pride in your financial position, your families happiness, and pride in yourself. When the kids go to bed, and your wife or husband looks you in the eyes, I guarantee that sexy feeling has a lot to do with being debt free and cash flowing. It feels better than a new Mercedes, or a Gucci handbag. And sleep? You never slept so well (until you get the call at 3am that the toilet in unit 4 is overflowing; yeah, thats a reality until you can afford a property manager).
Theres a whole lot more to talk about. Don’t worry, I’ll share all the secrets about how I did it. I’ve been doing this for 10 years now, and Yuko and I have made pretty much every mistake you can make; I’ve been thorough, I don’t think I’ve missed any. You’ll hear about our journey, the good and not so good. Some parts are funny (maybe not then, but now it’s kind of amusing). You may cry. If you read a couple of days ago, it was pretty crappy. That will continue. I need to share that, been holding that s__t in way too long. Don’t worry, you’ll laugh too, as I’m pretty darn funny. Please share this with someone you care about. I’m not looking for likes or anything like that. Message me if you want. I respond.
Oh, one more thing; I meet with one person every week at a coffee shop in Costa Mesa to talk about where you’re at. Then I talk and you listen for a bit. Then you get to ask questions till the hour is up. That’s it. No charge, and I usually even buy the coffee (pumpkin spiced double espresso whip cream grande latte is not coffee). Thats all you need. I don’t mentor, don’t ask. But I write, and I’m learning everyday, so chances are I won’t run out of stuff to talk about; and it makes me feel good. See, I am selfish.
With Humility and Affection,