Photo by gilbertofilho
It’s been over two years now since I filed for a Chapter 7 bankruptcy.
Two years of scrapping, recovering, learning, and often, pain.
So, what have I learned in the last two years? Plenty.
1. Bankruptcy hasn’t hindered my life dramatically
The funny thing about Bankruptcy is it dramatically kills your ability to get credit. But if you just filed a BK, the last thing you need is credit again, right? I mean, go all cash for a while. I didn’t even think about credit for a long time. I’ve since rebuilt my score quite a bit by getting some bad credit credit cards, and paying everything on time. But I still have zero credit card debt 2 years later.
For me, my bankruptcy wasn’t a “start over”, it was just a marking point. I still had over 150K in debt (to my mother and student loans that aren’t discharged in a bankruptcy). For many people, I imagine a bankruptcy is devastating. For me, it was the right move at the time, and if I had to go back two years, I’d do it again. I’d have too.
2. Owning a home doesn’t mean “you’ve made it”
In fact, most of my friend who bought homes 2-3 years ago are kicking themselves. I mean, I fell for the trap as well, but I feel many of my friends still think home ownership is the bees knees. I’m sorry, it’s just not. I can’t tell you how many people keep asking if I’m buying a home when I move, and I’m just like, “Nope, just renting”. You can almost hear their shock at how confident in my statement I am. It blows people away, even in 2010, that I don’t want to buy a home (even though I now definitely could again)
3. Cash is King
For about two years (2007-2008), I slept horribly. I was always on edge, always waiting for the shoe to drop. I’m still getting over that. The cause? No cash.
No cash in the bank means that any small event (minor accident, illness, car trouble), could turn into a major one. And that causes a ton of stress.
$5K in the bank will fix that for most people. Granted everyone’s “Sleep Better at Night” number is different, but for me it was around $5,000. Once I had that in the bank, I knew that any small bump, would be just that, and nothing catastrophic.
4. People will judge your regardless of your wealth
Rich or poor…it doesn’t matter. You’re always going to encounter people who aren’t happy that you are succeeding, or are happy that you aren’t. Haters gonna hate.
5. You have to force yourself to succeed
When you have no other option than to succeed, a funny thing can happen, you actually succeed. Two years ago, I had no choice but to succeed. I’m not quite there yet, but I’m getting darn close to being able to pay off my Mom completely, and my student loans, and be 100% debt free. For me, my bankruptcy wasn’t a “start over”, it was just a marking point. For many people, I imagine a bankruptcy is devastating. For me, it was the right move at the time,
6. You can learn from your mistakes
I think a lot of people, some of my family included, thought I wouldn’t be able to kick my trading habits. But I haven’t traded a single stock or currency (I have sold some stock holdings I had) since Jan of 2007.
Just because you screw up big time, doesn’t mean you’ll always be a screw up. You can learn learn from your mistakes!
7. Hard work WORKS
I’ve worked my rear off in the last two years. And it’s paying off. I’m closer than ever to many of my goals, I’m getting married, I’m in decent shape….but it hasn’t happened magically. I had to work to prepare myself to be in a relationship. I’ve had to work my butt off to make more money. I’m always looking for new ways to improve myself, in business, in learning, in life. And that takes hard work.
{ 4 comments… read them below or add one }
I relate a lot to #5. You have to force yourself to succeed. How true indeed! When you have no other choice to succeed, you have set the perfect conditions to succeed. Simply because there is not turning back. I wish you from the bottom of my heart to reach your success point (pay off your debt) and be 100% debt free. Did you have the chance to read the email I sent you?
I totally agree that having extra cash for emergencies will definitely go a long way to give you peace of mind. I remember when my sister had an accident and I had to bring her to the hospital. Good thing I had already saved a little extra cash then. My sister got cured and I was able to pay up the hospital bill without a problem. If I would have been still in debt at that time, who knows what would have happened.
On #2 – one of the things about explaining why you refuse to buy is that the people you are talking to view it as an insult. The other person probably owns a house, and you’re telling them that it might be an unsound investment. They take it hard because it relates to his/her personal net worth. Home ownership is a choice that is not for everyone, but people tend to be pro- or anti-, no gray areas.
Wow! I am so proud of you. You are a grown up man. I am 27 years old and the last two years had been a wake up call for me (and everyone else!). I totally agree with everything you said here. I am slowing getting back to trading the market with much better risk management and gaining confidence. Keep up the good work!