Chains All The Same

In A Beautiful Anarchy, Life Is Short, Pep Talks, Vision Is Better by David50 Comments

duChemin-money-blog

I’m finally hitting Publish on this post. It’s long. It’s not about photography. And it’s none of my business. But it is yours and as I’ve been talking about freedom a lot, I feel strongly that there’s at least one person out there that will read this and avoid making the same mistakes I did, and find freedom from some of this stuff much sooner.

We don’t talk much about money. It’s not polite, which is too bad because if we talked a little more about it we might worry less about it, and we might all have a little more wisdom on the subject.  Our culture has multiple personalities when it comes to money. We want it. We trade our days for it. We buy goods that tell others how much of it we have. But we don’t talk about it. About 4 years ago I started talking about it, because as a confirmed financial moron, I had nothing to lose and much to gain. Getting my finances in order has allowed me to live the intentional life I keep talking about. In fact it started with getting intentional about my money.  But this post isn’t really about money. It’s about freedom.  Freedom to do amazing things with our lives. Generous, adventurous, creative things. It’s just that I need to talk about money because, depending on what we do with it, it’s either a path or an obstacle to that freedom.

I don’t think the secret of a good life is in financial riches. But I do think the good life will be better lived (more easily lived?) when it is lived free of the bondage of debt and the fear and the worry that results.

“Though chains be of gold, they are chains all the same.” ~ Bruce Cockburn.
Money is not the root of all evil. Money allows us to do things like feed kids, put a roof over our head, give to the causes we believe in, fund projects we long to be a part of, and travel to astonishing corners of this beautiful planet. True, money can be a terrible trap. So can poverty and debt. For all this, no one wants to talk about it, and those that do always seem to find a way to seem sleazy about it. It might help if we were less ashamed about wanting more of it, which would make us less ashamed about learning to use it a little better, and working a little harder to keep it.

I keep hearing that most North Americans – as an average – are only 2 pay-cheques away from financial ruin. Something tells me this is bad. Our debt load is astronomical. The 2014 numbers, for credit debt only, and only taking into account households that have credit debt, tell us the average credit debt (USA) is $15,000 per household. The average student loan debt in the United States is $33,000. I’m in Canada and our numbers are also staggering. Apparently there are more self-storage facilities in North America than there are McDonald’s restaurants. We keep buying stuff we don’t need, purchasing against our future, in hopes it’ll get better. It usually doesn’t. And still we have too much stuff.

You may have heard this from me before, but several  years ago I completely ran out of options and went bankrupt. One of the many forms I signed said: Reason for bankruptcy: _____________. I wrote “Optimism.” We all think it’s going to get better, though we don’t often make the tough choices that would cause things to get better.

For all the words in this article, there are no magic bullets. They don’t exist, despite what all the Get Rich Fast schemes out there promise. If you want to manage your money, the short, painful secret that no one wants to hear is this: change. When people say they wish they could master their finances they usually mean they wish they had more money (don’t we all?), not that they’re willing to change their behaviour. Change is the hard part. Here are 5 things that I should have done much, much sooner.

Scale Down.  
This is the easiest. And the hardest. Not everyone needs two cars. Not everyone needs the latest iPhone, the latest big screen tv, the latest Nikon DWhatever or Canon WhateverDMkII. We don’t need it but oh do we want it!  The problem, on a culture-wide basis (aside from how much money we make), is our appetite. GK Chesterton once said there are two ways to get what you want: the first is to acquire more and more, the second is to desire less and less. If you don’t need it, don’t buy it. If you bought it and don’t need it, sell it. Clear it out and don’t fill the space with something new. Tame the appetite. Learn to say no to yourself – or rather, learn to say yes to a bigger thing: a debt-free, clutter-free life that affords you the freedom to do what you want to do.

Our landfills are groaning from the waste. We don’t need it. Your kids don’t need it either. They’ll survive not being the cool kid. I did. Might be that not being the cool kid made me the person I am today. A simpler life, with less consumption, is more sustainable on many levels, including your finances.

More stuff, shiny stuff: it all comes with a promise, and it’s usually false. It never makes us cooler, but it leaves us with that impression for a while. It never lasts as long as we wish it did. And most troubling, someone’s always got something newer, ergo, something better, and we don’t. And it’s never anything we need.

What we need is freedom to live without the debt over our heads. We need freedom to pursue the opportunities that come to us in the present that we’re unable to take because at some point in the past we leveraged our future to buy something we so badly thought we needed. It’s a choice. I pay for nothing unless I have the cash for it. It means sometimes I have to wait. But the longer I do this, the more money I save, the less painful this is. It’s always harder at first. It’s going to hurt. But it’ll hurt more later if you don’t control your spending. If it’s too late, suck it up and go see a credit counselor. The sooner you take this seriously, the easier it’ll be. You won’t believe how fast a $10,000 debt becomes $80,000. It’ll make your head spin. You also won’t believe how freeing it is to live without owing a penny to anyone.

Scaling down applies to homes as well. I’m not going to go into it, but not all real estate is the investment it’s said to be, and there are many, many, good reasons to chose to rent instead of mortgaging a home. Cash flow is one of them. I’ve many a friend that laughed at me for throwing money away on rent who couldn’t themselves afford to do anything because they were so tied up in the mortgage they could barely afford, and several of those who sold the house years later for a return that didn’t come close to displacing what I gained from renting by paying no property taxes, no interest, and no maintenance. For some it’s a great idea, but question the prevailing logic because it might not be right for you. Don’t let pressure to own force you into buying – like all our stuff, a house can own you as easily as you can own the house.

Along these lines, my own policy is to buy the right thing the first time. Want a great pair of boots? Buy great boots the first time. I’d rather spend $200 every 5 years than $80 once a year for 5 years. Buying quality (not on credit) has always paid off for me. It’s false economy to be penny wise and pound foolish, as they say.  Second thought – unless it makes you money, it’s a liability. Tech (iPhone, Macbook Pro…) is a terrible place to put your money, and without a debt the worst thing you can use credit dollars to buy. If it’s a business, a lease might be a good idea, but that’s a different conversation. I’m not saying don’t buy them, just to understand you’re buying something with a best-before date and the more years you can use it before buying yet another one, the better.

Save.
When I was young I was taught to put 10% of my money aside. I didn’t. What did I know about money? We didn’t have much of it, but I didn’t know that. It seemed to be there when I needed it. I had no idea how hard it was for my single mother to earn it. I wish I’d been more grateful. I wish I’d started saving. It’s human nature, when things are going well to assume they will always go well.  Once you’re free of debt you can put into the bank all that staggering pile of money you were paying in interest. The best time for me to start saving was when I was 10 years old. You now know I didn’t do that. The second best time is now.

Once my bankruptcy was over I started put 10% aside into a savings account. I didn’t miss it. My trustee (court-appointed blessing that she was) told me to do this. In light of my financial incompetence, it seemed like a good idea to listen to her. Combined with tighter spending and no debt, that money in savings made me feel better about myself than any of the stupid things on which I’d spent my money over the previous decade. Slowly I opened more bank accounts, into each I put a specific percentage. Now I have money saved for the tax man, for my travel, and other adventures and contingencies.  I do this every pay-cheque and I pay myself first – which means those 10% chunks go into the bank before anything else happens (unless I’ve put something on the credit card to get air miles or purchase protection, that always gets paid first, no questions). Fill those buckets first, then whatever is left over is your means. And it might not be big just yet. But you know what, you’re debt free. You have money in the bank. And no, you may not have the newest Nikon. You have something much better – you have the freedom to use your camera – go somewhere! – and when it breaks or finally dies, you won’t have 2 years of payments left to make on it. Money saved is the same as money earned.

If you’re going to put money in the bank, shop around. Know what interest you’re earning, and how much you have to pay in service charges to earn it. Could be you spend more in a year with that savings account than you earn. That’s not saving. Know your country’s opportunities for tax breaks and leverage your RRSP, 401K, TFSA, or whatever the equivalent of tax free savings or registered retirement finds. One year I saved $11,000 that I would otherwise have paid in taxes, but moving it from a savings account to a retirement fund. One had tax breaks, the other didn’t. $11K is a lot of money and in the right investment it can double in 5-7 years. Keep reading.

Invest.
Do something with that money. I think it was the book Rich Dad, Poor Dad, in which I read this idea: the poor work for their money, the rich let their money work for them. It’s overly-simplistic, I know that, and I bristle at the distinction. But there’s something to learn in it. When you don’t service a mountain of debt, and when you’ve got some money saved, there’s money to invest. Where you do that is up to you. I won’t invest in the stock market, it feels too much like gambling, and mutual funds, etc., scare me. A friend of mine told me he will only invest in what he understands. For me that’s small investments in private equity that routinely yield 10-12%. I won’t explain it because that’s not my place. But 10%, compounded over the next 20-30 years is a great return without being too risky. If you could put $10,000 into something like this, you could double your money every 5-7 years. In 30 years, without doing a thing, you could have $160,000 from that initial $10k. That’s the possibility. But it’s going to take some work to find those opportunities and sift through all the empty promises.

Investing where you’ll see great returns is not just about making more money. It’s about giving your money away, in the places you want to make a difference. It’s about being able to create something – including a bank account –  larger than yourself.

Learn.
Don’t just follow the crowd. Study this stuff the way you do your photography. Be intentional about it. Read books like Rich Dad, Poor Dad, or The Richest Man in Babylon. Look up I Will Teach You to be Rich by Ramit Sethi, it’s an awful title that makes me feel like I need to go take a shower, but it contains some solid wisdom and should really be called, I Can Teach You Not to be a Moron with Your Money. And if you know almost nothing about money, any of those three books is a good start. Some ideas will work for you, some will not, but you’ll learn. And investing where you’ll see great returns is not just about making more money. It’s about giving your money away, in the places you want to make a difference. It’s about being able to create something – including a bank account –  larger than yourself.

Diversify. 
Diversifying your investments is smart, but so is diversifying the way you earn that money.  Find a way to earn multiple income streams. Pull your water from different streams, so to speak, and you’ll be less vulnerable when one stream dries up. And if you make one of those streams a passive income stream, even better. You can only be in one place, earning one dollar at a time for your presence. A book that earns royalties earns when you’re off doing something else, perhaps the day job you’re looking to one day leave: that’s passive income and the opportunity for this kind of thing has never been better. Spend some time looking around and you’ll see a staggering variety of things people have leveraged into new streams of income – both active and passive. eBay, Etsy, Shopify, and eJunkie all allow you to sell from almost anywhere in the world. And there are the same amount and quality of services that allow you to to broadcast or teach online, too. You can literally carry a store, a TV station, and a radio station, in your bag, and run it anywhere you’ve got a laptop or tablet and an internet connection. I’ve serviced customer issues from Antarctica. You can do this. If you haven’t read them, I’ll recommend them again: Crush It! by Gary Vaynerchuk, and The 4-Hour Workweek by Timothy Ferris. These books gave me notebooks full of ideas. The eMyth Revisited, by Michael E. Gerber is another good one if you’re looking to become an entrepreneur.

None of this is easy. Definitely isn’t magic. Changing our lives can be hard. Our own habits are hard to break and we live in a culture that passively, if not actively, encourages our debt and consumption. It keeps the big wheels well lubricated. But eventually your own wheels will seize up. Don’t let it happen. Your freedom is on the line. Your one chance at an extraordinary life may not be completely hijacked by your debt or money struggle, but mine was getting strangled. It took re-educating myself, changing patterns I didn’t want to change but could no longer afford. Read some books, talk to someone who knows how to use money well (not a guy who runs a mutual fund gig selling what his boss tells him to sell) – money is a tool and the sooner we learn about how to use it, the sooner we can build something amazing with it. Don’t give up.

Not an easy subject. Even harder to admit when things have been off the rails and ask for help. It’s deeply personal, I get that. It’s one of the reasons I’m finally publishing this article, which I’ve written and re-written a hundred times over the last year. I’m open to this post being a total bust but if it gives just one of you some new resolve or a fresh idea on approaching this, then it’ll be worth it. Your finances are none of my business, and my answers might not be yours, but the comments are open if you want to bounce some ideas around, tell your story, refer us to a good resource…

 

Comments

  1. Thanks so much for writing this, David.

    One of the biggest influences you’ve had on my career was very early on, when I was reading your “Visionmongers”. There were many pieces of wisdom in there, but the one that really stuck with me is the simplest: “don’t be a moron with your money”.

    I’m not saying I’m not one sometimes, but whenever I am considering purchasing something for my business or myself, I have little David in my head asking me whether I’m being a moron with my money or not. Thanks for that!

    1. Author

      Thanks Diana. On the Mac it’s as easy as using the Command and + keys and the font size will increase. On the PC there should be a similar function. Should make your reading easier!

      1. OMG – I never knew that – makes it so much easier to read. Thank you. And thank you for the awesome article with much food for thought!

  2. David, I highly respect you for posting these excellent thoughts. I’ll be sharing your post with others…

    Your photography is still on my walls. We love it. It has been such a good investment to reflect what is real, right and worthy.

    Many thanks. Mark

  3. Great post David, and certainly one that almost all of us “artistic” typed need.

    Living, as we do, in an age of seemingly endless greed, we need to be reminded that the best use of money is freedom and that without freedom all the money in the world will never be enough.

    Wonderful, quiet image at the top.

  4. Great Article. My spouse and I live debt free. Own Two homes, five vehicles. Have thought many times about leaving the 9-5 but I can’t walk away from 200k paycheck a year… Though I can probably live on the 4000+ shares of Apple stocks I own.
    Alas, I’m a workaholic and Photography takes me a way from that. If I left my work, then photography will turn into my 2nd work obsession instead of a passionate hobby.

  5. I couldn’t agree more. It’s not an easy road to make that change, but it affords more opportunity and less stress.

    I have been giving the book Millionaire Teacher by Andrew Hallam to friends. It presents an easy and effective way to invest, while being mindful of investment costs.

    1. Thanks for the recommendation! I bought the Kindle copy yesterday and am already halfway through. I love how it explains concepts so simply. And the ideas are very inspirational.

  6. Thanks for this post David. Good timing for me to hear this kind of stuff again. 2 kids, another on the way, mortgage, etc, are a struggle but still living within my means. I’ve learned a lot in the past year about ‘gear acquisition syndrome’ and thankfully everything I do buy for my camera is cash up front now, and only if it actually helps the business 🙂

  7. I wholeheartedly agree! My husband and I rarely buy on credit – when we do, it’s typically to earn reward points, and we’ve saved up money for immediate payoff after the purchase.

    Saving up for things also helps us narrow our focus on what’s really important to us – is that thing we want to buy worth saving up for the next 3 months?
    We live below our means, and put away about 15% of our income into IRAs and 401(k)s, in addition to an emergency savings fund. We have used Roth funds for IRAs and 401k, because the money you put in gets taxed when you add it. Otherwise, you get taxed when you take the money out at retirement – and I really only foresee taxes going up in the future. We have one international fund, and the rest are domestic. Of those, one is fairly steady but low, and the others fluctuate a bit more but historically do very well over the long-term, and also compared to the S&P 500 and NASDAQ.

    We’re originally from Florida, and we saw a lot of people buy houses during the boom, and lose out during the bust. We just bought our first house, and we set our price limit lower than we could technically afford, to make sure we really could afford it long-term.

    Because of our planning, we are fairly stress-free financially. We keep to a monthly budget, and we pay attention to our adherence to it. We also talk to each other about concerns or wants, so we both always know what’s going on.

  8. Either it be jealousy, judgement, embarrassment, etc, I get why actual numbers are kept secret but I enjoy the topic discussions. I wish I had a high school class that taught it.

    Having a personal accountant, investment advisor and bank relationships manager that I can trust and is always an email away is a plus.

    *** but forget the money. The waste and how quickly we discard is reason enough to stop buying. Holidays should be celebrated but the association to spending is infuriating. A sale is only saving money if you needed it before the sale. [/end rant]

    1. We decided about 15 years ago to stop giving holiday gifts within the extended family, with the exception of very young kids who mostly got educational toys.

      My wife and I realized that we rarely got anything we really wanted for holiday gifts, and we could all afford to buy what we REALLY wanted during the year. We therefore broached the subject at Christmas back in the late 90’s.

      We were surprised how quickly the rest of the family agreed. Turned out they were all thinking the same thing, but nobody else wanted to bring it up.

  9. Yep, I went through that way back in 1980 when I went bankrupt. In my case I realized I did not understand finances, and had put my own company into bankruptcy. I got an MBA in 1984, which taught me one heck of a lot about finances and money in general.

    I changed my approach — mostly the “dip from more streams” for income and investing heavily (in my case I studied the stock market and did well in it). I never really cut back, because the other techniques meant I didn’t need to.

    I retired last year, and moved to Ecuador to continue our adventure. 41 years married, 34 years since bankruptcy, and enough money saved away to let me live anywhere I want — and the health to want South America for a few years before moving on to our next adventure. 🙂

  10. Thank you for this post. In a society that encourages spending and taking on debt, it’s nice to have more voices behind the concept of reducing our consumption and focusing on sustainable habits.

  11. Great post. As one who is 72, debt free, cash on hand, even a somewhat limited income goes a long long way.

  12. Thank you for this. Very well written and something so many of us needed to hear.

  13. Hi David,

    As someone who’s struggled with money for years, I appreciate you sharing your experience and the lessons learned.

  14. What may help also help to ease the hunger for fancy things is to convert any spending amount into time: “Based on my income per hour, how long do I have to work to get this piece of equipment, this book, ticket etc. and is it worth the “life”time Invested?” – “And how much time will this investment cost me after I got it?”
    Money is abstract, time may be a little bit more better to judge on.
    I find the story with the “good pair of boots” very realistic. In the end you not only spend more money (time) to buy the “bad boots” more often, you also spend directly more time to get to the store, test the boots, decide etc.
    By the way: why is it there are more Malls built than churches?
    🙂

  15. our local photo community here in Winnipeg was a buzz last week when one of our own, a wedding photographer was charged with tax evasion. His “defence” was incompetence. Your article comes at a perfect time,.. off to share it with the group! ThX!

  16. Great post. It requires a lot of humility and courage to admit its own failure, but it’s admirable to share the experience so that one can learn the lessons. All the points you are making are so obvious and should be taught at early ages. I read the post several times and shared with my teenager kids.

  17. The most valuable of the listed is learn in my opinion. Never stop learning. I learn new things daily and it makes me better. Never let your ego be too big to learn from someone else.

  18. Thank you David for sharing so openly. Your point about buying more stuff is well made. I used to fall into this trap, buy the cool new stuff. I realized from reading “The Last Lecture” that stuff is meaningless compared to our experiences. I don’t remember a camera but I remember the road trip I took with my eldest son or the trip to the Omo Valley in Ethiopia. I will never forget these amazing experiences.

  19. David, you continue to be my main influence, teacher, encouragement, guide, ….it has been a year since I stepped back into photography (from film to the digital revolution) and I can not tell you how much I have appreciated your wisdom and teachings. But now you are going too far!!! How am I supposed to satisfy my GAS attacks now without increased guilt…just about to throw down $1000 for a fuji 56mm. I will start saving AFTER I get that lens, …ok? : )

  20. I agree with everything David has said. I am debt free and last year I was in Uganda, Rwanda, Nepal, Bhutan & Kenya. This year I will be in Iceland, Tanzania (Kilimanjaro), Zanzibar and Sri Lanka. It can be done. Thanks for putting it out there! 🙂

  21. Thanks for this post David. I (now) feel much the same as you about money. Debt free = freedom to choose. I see friends on the mortgage treadmill and I see them all working very hard to increase or maintain the value of their assets. Their focus is very much on the future while sacrificing the present. We don’t know how long we have in this world and I know I don’t want to spend my whole life tending to a physical enclosure just so that I can look back on an empty life in my freehold house.

    Thanks for having the courage to share your experience and views 🙂

  22. Such a great post David! This is something that’s always at the forefront of my mind and your insight is a valuable addition to help me, and many others, learn and progress. Thank you!

  23. Good post.

    “I count him braver who overcomes his desires than him who conquers his enemies; for the hardest victory is over self.”
    — Aristotle

    And, for the record, the other quotation should be:

    “Love of money is the root of all evil.”

  24. Your first few paragraphs made me immediately think of “How I Found Freedom in an Unfree World” by Harry Browne. It’s about all the traps we let ourselves get into and, basically, about being selfish to help prevent it. I’ve not finished it quite, but, regardless of whether you buy into his whole philosophy, it’s an interesting read.

  25. Thanks for the great post. Are you willing to share PE info for a consistent 10-12% return? That would really help 🙂

  26. Greatly written David. Health & personal freedom are the two most valuable assets a person can have. Keep writing so the masses can learn………..

  27. This was an extremely thoughtful and heartfelt post, which I shared with my wife and teenage son. I hope it reasonates with him–I don’t want him to make the same mistakes we did.
    Thanks for writing this.

  28. David, this is an excellent post and information that all of us in the arts should have been instructed in at the outset. Fortunately, learning and recovering from mistakes is a lifelong pursuit! I’d like to share a resource – the best financial advice I’ve received to date (closely mirrors what you are saying) is from a guy named Dave Ramsey. He has a 1 hour podcast that’s free and I’ve learned an immense amount from it about living debt free. He does have a book – but listen to the podcast and see what you think. I’m living debt free because of him and have purchased a lot of trips and camera gear for cash, so I know it works.

    That aside, I really appreciate the depth of thought and personal investment that you put into your posts. I made your post about “Life is Short” into a PDF that I re-read on a regular basis. Excellent stuff! This is not a dress rehearsal folks, go make images that make your heart sing!

    Thanks again David!

  29. Hi David, great post with a lot of truth in it. A few flaws in the second part though. The most striking is the 10-12% interest over 30 years. Anyone who achieves that is in the range of Warren Buffet and the likes. If you have the found the secret to investing (low risk, high interest) please share. I think people would even pay for that advice – including myself. Good article whatsoever … Cheers

    1. Author

      Philipp – Warren Buffett recommends Index Funds. Over 30 years you’d get a return pretty close to that, from what I read. My current investments – and I am still learning – are all in private equity, with project life of 5 years, then I re-invest. I will be adding Index Funds purchased monthly (dollar cost averaging) soon, once I pick a fund. I’d like to politely decline to tell you which PE finds I invest in, only because doing so publicly is a liability and I don’t want anyone’s investments on my shoulder. I can tell you I’ve chosen to invest largely in Canada, in things I understand and support – like solar energy development. But like I said, I’m learning, so I’d rather discuss principles, not specifics, lest I steer anyone the wrong way with a recommendation.

      1. Hi David,
        thanks for the info. Your investments sound very interesting. I will do some research on it. Regular investment in index funds for cost averaging is a solid and good concept.
        I am from Germany and here we don’t have that much of a problem of collecting debts but nevertheless we are still stuck in the same traps this society sets for us. Here it is more about the false perception of security. That ties people down and even myself am still trying to free myself from it. Wish me luck.
        On a general note: I am an avid photographer and have purchased a couple of your books just recently. Great work and I can only congratulate you for achieving this lifestyle of yours. As I just returned from a year long journey across South East Asia and now looking for a new job, I would love to do something similar to free myself from the ordinary 9 to 5 rut. Just a month ago I was in Vancouver visiting a friend. Would have loved to meet up but unfortunately I just recently discovered you and your work. Maybe next time.

        Keep up the good work and all the best,

        Philipp

        http://escapology.eu

  30. Pingback: Photography Links: March 2014

  31. Thanks so much for posting this article! Since reading this a couple of days ago I’m already halfway through one of the books you recommended and one of the books recommended in the comments. You totally motivated me to be more intentional with my finances.

  32. Thank You! Even if you are a saver, which I am, a gentle reminder to review your finances/lifestyle is always a blessing.

  33. As usual this blog post comes at a great time for me in my crazy, crazy life! 🙂 Although I have a couple of points to bring up. You know me, I don’t know how to not retort! 😛
    Last year my husband of almost 12 years left. April 2nd. I had never been on my own before, not really. I got married at 19, and here I was, 34 years old, with a house and 3 kids, and coming off a bout of depression (largely due to some health problems and my failing marriage and a job that sucks the life out of me) and getting ready for yet another back surgery and bam! I’m a single mom with a house and kids. No budget. Contemplating bankruptcy because my debt was staggering.
    This is the thing. When you have partner, whether technically married or not – if you merge finances, it’s so very, very important to communicate that. My ex husband and I never merged our finances. He’s almost 12 years older than I and he really felt it was better to keep them separate. How can you have a clear financial plan when the left hand doesn’t know what the right hand is doing? It sounds like common sense but you would be surprised how many people do this. In talking to people post break up, I was amazed at how many couples don’t have the money conversations. It’s only difficult if you make it.
    I filled out bankruptcy paperwork. And much of my debt was medical. Sure, I have health insurance. Great coverage. But a large deductible with large co-pays and some medication I take is expensive, so every month I’m paying roughly close to $500 monthly. That number has gone down since my last surgery, but I’m gearing up for another 2, one to remove a neurostimulator and the second another spinal fusion. The cost of these surgeries in the US is also staggering. So even with insurance, out of pocket expenses can be unbelievable. (Darn you Canadians and your socialized medicine! You have the edge there for sure.)
    There is nothing more humbling in life that I have experienced to date than filling out bankruptcy papers. It makes you feel like a moron. My divorce attorney and bankruptcy attorney assured me that I was not a moron (well, at least not for that reason). People file bankruptcy for many many reasons other than overspending. In my case, my spouse at the time and I did not communicate. We didn’t have a financial game plan. And that is a serious regret I have and something that definitely contributed to the demise of my marriage.
    I’m incredibly lucky. I’m an eternal optimist. As naked and awful as I felt filling out the bankruptcy papers (they ask you everything, and I mean everything except maybe the color of your underwear you are wearing while you are filling out the paperwork) – I kept thinking this was necessary for a fresh start.
    Bankruptcy has a stigma. No credit for 7 years – blah blah. But that isn’t the case anymore. Bankruptcy erases your debt to income ratio. It eliminates your spotty payment history, your late payments as you struggle and rob peter to pay paul. In fact, even though bankruptcy is on your credit file and affects you for 7 years, within a very short period of time if you play your cards right you can be credit worthy again, and in society today I think that’s important. As an employer, while we do not use this, I can assure you that there are many employers that do credit checks as part of the hiring process.
    Anyway, back to my eternal optimism. I was not going to let the thought of bankruptcy break me. I had to look at it as a fresh start. And ironically enough, the business my ex and I own was valued and as part of our settlement agreement, I’m walking away with enough money to pay my debts, remortgage my house and have lower monthly mortgage payments, my car, and money in the bank. I’m putting a portion immediately in a CD until I complete my financial strategy for the future.
    So – 2 thoughts and I’ll wind this long winded post down. TALK to your spouse if you have one about your financial game plan. lay your cards on the table and work together. It’s critical. I can’t stress it enough.
    Second – Think about a will or a trust, especially if you have children. If you are saving money, who do you want to manage it for the people that survive you? So many people look at it like well, I’m dead, who cares? They will figure it out. I’ve had enough people die in my life to know that isn’t always the case. In fact, we had an uncle die who did not have a lot of anything, and there was so much fighting over one of his assets it fractured my in laws family in ways I never saw coming. Don’t let this happen to you.
    Just food for thought. I’m lucky. I will rise out of the ashes of the worst period of my life like a phoenix, ready to fly. Eternal optimism, that quality literally saved my life during some very dark days. And most importantly? It’s money. If you make a mistake, it’s not the end of the world. Learn from your mistake and move forward. Bankruptcy is not the end of the world. It’s a fresh start for many, and you’ll make it through it. It’s not like they tattoo Bankrupt on your forehead! 🙂

  34. Another well written post David, thanks! I am in total agreement with the concept of a minimalist lifestyle. I truly believe it gives you more freedom to travel and do things you enjoy. Debt is such a dream crusher. I know, as I’ve been there. I’m happy to be debt free and looking forward to our future plans.

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