Wednesday, October 22, 2008

God's Good Humor

Borrowing a line from the epic film Titanic, I am officially operating on "God's Good Humor". I've finally reached the end of my rope, there is no more savings, no more money in the retirement account, no more access to credit, and no where else to turn. Like Leonardo DiCaprio's character I'm on "God's Good Humor to be her with you fine folks". The sheer thought of being broke is almost incomprehensible. To go from multi millionaire to negative net worth is, well, its humbling. If you've been following "My Story and I'm sticking to it" then you know I've been struggling to rebuild our financial lives and focus on creating new wealth. Each is a formidable task in and of itself but becomes more challenging with the fear of not being able to provide life's basic essentials for your family. For an everyday guy who worked so hard for so long and sacrificed to build up a considerable net worth its just hard to accept I can't even pay basic utilities.

Case in point, as I write this article there is a concern in the back of my mind the lights at my home might get shut off, today. As bad as that might sound it dwarfs in comparison to another concern and that is whether I will be able to feed my family next week. I'm overdrawn in my checking account by $3,300.00 as of this morning and the check I wrote to pay the electric bill last week might get returned resulting in a disconnection of service. Thank goodness the twenty year relationship with my business banker has pretty much resulted in her approving any payments we make to our mortgage companies. But there is only so much she can do and I can't expect every check I write to get paid when I have no money in the account, duh! I thank god daily for sending me small blessings.

The whole process of our spiraling economic situation has brought on a new perspective. To say the experience has been humbling would be a travesty, rather I imagine a correlation to the pain a man would feel if he were burning while eating his own flesh to eliminate the pain. My mother, a very loving and devoted mom, told me recently I pushed it too far because I have to much pride. And she is right, my pride has driven me into this situation. Unfortunately my pride cannot help me pay my bills. Pride was not able to explain to my innocent daughter we could no longer afford teenage auto insurance for her car. Since we had to cancelled her insurance we now drive her to and from the private high school she attends. We live in an affluent area on the coast in California and her high school is located relatively close but a bit inland in an area considered to be "rough" by many in my neighborhood. The reality is the area is a typical lower to middle, middle class blue collar area. An area very similar to the one I grew up in. And while driving through this area you need to take extra precaustion for the numerous pedestrians. Most of the residents use public transportation, walk to work, or ride bikes to get around. And then there's the beggars. You've seen the signs "will work for food" "please help my kids are hungry" "Vietnam vet please help".

Now if you're like me you look away when you see these signs. We may choose not to acknowledge there is a person who is behind the signs. They are there asking for food, an essential life support. No I really never looked in their direction and never paid much attention. Prideful nature or not my faith has allowed me to possess a decent level of humility. This humility has allowed me to see their situation in a different light, there situation is not much different than my own. Oh sure, their geography maybe different but at the end of the day we both need the same thing, food, and we both don't know how we are going to get it. I've developed a new appreciation for their plight. Their plight, hum, that's sounds a tad contrite. As I try to relate my own situation to these very real people my indifference shows through my selection of words. I'm sitting here hungry and I can't even put myself on the same level of the guy standing on the street asking for help. Pride!

The fear of not being able to pay my light bill is not the only fear I am presently experiencing. I'm afraid I might not be able to feed my kids next week. If you want to talk about pressure, that my friends is pressure. My kids are the most important thing to me right behind the big guy up there, god. So I would/will do anything earthly to make sure they have a roof over their head, and food to eat. And I've been so fearful of not having either of these two for them that I've made decisions in the recent past to get us to this point, a bearish point of no return. In an attempt to keep the roof over head I've continued to pay very large mortgage payments, and some larger than needed lifestyle commitments eg; Porsche payment, steak and cheese, instead of bus pass and wieners. And these decisions have taken me to the point of "all in", using Texas Hold'em parlance. In hindsight I should have recognized the potential of our current reality and made a decision to sell our house and replace it for a smaller one, and significantly reduce our lifestyle. You've heard it before hindsight is 20/20 and you can't go back in time and decisions. The living reality now is we're broke with no food in the frig and cupboards are about bare. Next week should prove interesting as there is a real fear I will not be able to provide food for my family.

Its human nature to take much for granted when things are good. I could never have envisioned a time when I would be concerned about food. Growing up my family was in the dairy business, They owned farms, cows, pigs, chickens, etc. And while I grew up in a metropolitan suburb my family always had plenty of food as my dad ended up in the food business. Food has never been an issue in my household we've always had the ability to buy what we need and probably much more than was needed. This is in stark contrast to today. Today I'm am sitting here writing this and my stomach is growling. I'm so fearful our dwindling food supply is going to run out I've cut my eating back to once a day, and even then its been minimal. This began two weeks ago, and I noticed my wife has done the same. Neither one of us talks about it but we both know. For example we had one meal last night, a two egg omelet and home made hash browns. Hash browns have become a favorite as it doesn't take to much to make a meal out of potatoes. I wonder if there is some Irish in us both.

There is some irony to our situation, and perhaps a good lesson to be learned. As I've said I'm darn near starving but less concerned about this and so much more concerned I won't be able feed my kids in a couple of days. The lights are still on so I'll be able to finish this story but they might not be on for very much longer so you will forgive me if I don't respond to your comments for a couple of days. And here's the irony, we are living through this hell, but we are living through it in our $2MM house, driving our state of the art Porsche while contemplating the future of our next meal. The majority of my net worth was lost through business failures ( "My Story and I'm Sticking to it") but our lifestyle choices added fuel to the asset loss fire. The lesson? Watch your lifestyle choices. You might take for granted what is gone tomorrow.


  1. Read:
    1) "Your Broke Because You Want To Be" by Larry Winget.
    2) "Your Money or Your Life",
    3) "Choosing Simplicity"

    1) Pull the kid from private school (Da...). Might get a cash refund of tuition.
    2) Sell the Porsche and pay cash for a cheap car that will suffice for transportation.
    3) Sell the jewelry, Rolex's, etc.
    4) Ebay what you don't need as basic necessities to survive.
    5) Get you and the wife back to work earning any cash possible.
    6) Apply for gov't assistance
    7) House has to go
    8) Learn to forget about appearances, your neighbors are probably right behind you on the downward spiral.

    Who am I to advise: a business owner that was also a Financial Planner at one point. Larry's advice in his book is what you need at this point. Read his Porsche 911 turbo went after I read it. Rolex and jewelry went. Raised cash from the sales for capital.

    Just do it...your family is more important than things, your vanity or other's image of you.

  2. You are everything that is wrong with America.

    You complain you don't have enough money to feed your family or keep the lights on but at the same time you have an extra car for your daughter to take to her private school.

    You are knowingly spending money you know you don't have.

    You complain you don't have money and you may have to move onto your boat? Why not sell the boat, the cars, etc.?

    You have no income, no money, and live in a house you were never able to afford. You are not rich and since you were always in debt up to your ears, you never were rich.

    The reason you are broke now isn't because you have too much pride, it's because you don't have a job and and buy things you know you can't afford. You are sickeningly irresponsible and you and your wife's behavior is going to cost me and every other responsible citizen money.

    Instead of whining on the internet about how you are going to lose all your stuff, why not do something to fix your situation. Is your house even on the market yet? Is the Porsche? The boat? The 2nd and 3rd car?

    Believe it or not, the world doesn't owe you anything and we don't share in your misery.

  3. Anonymous, right on. You're advise is good. We have been on course to rid ourselves of many of our possessions prior to this article. I did check out a copy of the "Your broke Because You Want To Be" from the library. Winget's advise is good, a hard love type of approach. I can relate to his method and strategies.

    I also want to thank PLANK for his comments. PLANK you are absolutely correct, my present situation is what is wrong with America. I'm not ducking and hiding, I got myself into this situation and I'll get us out, and you won't be left paying any of the bill.

    I would like to point out that this particular article is part of a series of articles which together comprise a complete story. I was actually rich with a NET worth of approx $4MM and no debt outside of mortgages on my house and investment properties and at times perhaps a car payment.

    For 15 years when I bought most things I paid cash or I didn't buy it. This included the 3rd car ($2K) the boat ($12K) and any other luxury item. These things also had operating expenses, gas, insurance, maintenance, and slip fees which needed to be accounted for but often are overlooked. But then as we accumulated more wealth our consumer behavior started to change. We bought more things we probably didn't need, took more trips than we certainly should have taken, and in these trips upgraded to "Suites" and 1st class fares way more then we should have. This change was slowly at first, but then it accelerated to the point of taking on debt to pay for the excess purchases. Why, I'm not completely sure, yet. I think I've got a pretty good idea but that is the purpose of this expose.

    Thanks for your input. Your comments are taken at face value, in the context they are meant, and I will use them as ammunition in my battle back to wealth.