I had coffee a few weeks back with a business mentor of mine.
We discussed what I had been working on the past few months. And what I was going to do in the future.
I had been doing some lucrative consulting, but wasn’t completely happy with the long term value in what I was doing. Working as a freelancer for other people is cool and all, but it’s doesn’t build value in anything I own.
And I need to own assets.
Now that my emergency cash flow issues seem to be past (hopefully!). I want to focus more on building more business assets, than consulting on other people’s assets.
I think it’s also a short-term vs. long-term view. Short term, I can definitely make more money working on client’s projects. But will that get me out of this huge debt whole I am in? Eventually yes, but I think it would take a heck of a lot longer.
Patience
I’m discovering a new found wealth of patience. I can’t take most of the credit. My counselor has been helping me tremendously in this area. Patience that I WILL pay off my debts. Patience that I can grow my business. Patience that I will someday meet the right girl, etc.
Speaking of girls, I think I said I would update here if anything happened. Well, if you don’t follow me on twitter, the update is that I asked out two girls this week.
And definitely got turned down by both.
Oh well.
Patience, right?
{ 9 comments… read them below or add one }
Well, you are finally saying something that is worth my listening to you. But you might not be in the position to build equity.
DebtKid,
You write: “Now that my emergency cash flow issues seem to be past (hopefully!).”
Can you give your loyal readers some detail on this? Are you making minimum payments on all your loans, and the ones that were in default have been reinstated? Or are you using the ostrich approach to some of them?
No question for me that your way out of the debt and into wealth is through your business. Perhaps you are already in a position to make the scheduled minimum payments on all your loans, but the problem is that some are in default and have been sent to collection. What progress on that front? Where did you inner CFO go?
Cheers,
Alan
Alan, all of my business loans have gone to collections. Two of the business lines of credit, I honestly haven’t heard anything from the banks in over 6 months. The obligation is still out there somewhere, and at some point it will have to be dealt with.
I have already received settlement offers on some of the business loans, and I hope to be able to start settling accounts by the end of the year. My “inner CFO” is telling me to save up cash and try to settle these one by one.
What do you think?
Although you didn’t ask me, I think that your Federal Tax Lien is going to restrict you so much you’re not going to be able to breathe for awhile, so forget asset building for the time being. The thought of owing so much and posting such malarkey makes me doubt you’re being serious.
I think maybe I didn’t make it clear here when I talk about “assets”
I’m not talking about cash or stocks. I’m talking about more illiquid assets such as customers, software, ip, etc in my business.
DK,
I think you have the right idea. Tackle each account individually and cross it off your list. It will make you feel better to know that one is completely out, and only x more to go. Also, I agree with you that you need to start building assets for your business. I think you have a good start, just keep focusing on building more, leveraging what you can, and sticking to your goals.
On the consulting, I think for now if you can balance both, I would do both. The extra money is always good and building these relationships can be an asset of its own down the road. You never know.
I would say focus on your business, but if the right consulting gig comes around, don’t let it pass you by either. At this point, making as much money as you can will help to tackle your debt.
Keep up the good work!
DebtKid,
Your idea of saving up cash to settle the debts one by one is risky, because you may get nasty surprises from the “sleepers.” I would not ignore them. Why don’t you give them a call and try to work out a payment plan, to try to bring the loan current? (Just don’t tell them you saved up a stash, as I’m sure they’d love to get their hands on all of it.) Also, the default interest rates on your loans are probably making the balance grow so fast that even if you make some payments you are still getting deeper into debt every month. Wouldn’t it be nice to be able to reduce the aggregate outstanding balance of your loans each month, even if it’s just a little?
By ignoring the lines of credit, you are flying blind. Strikes me as irresponsible.
Also, when you say “at some point it will have to be dealt with,” I hope you mean that at some point you will have to deal with it.
You’ve come a long way since the early days of this blog, but you still need to get these last pieces under control. Now go get ‘em.
Cheers,
Alan
“all of my business loans have gone to collections”
That is all that needs to be said about this. Why can’t you read the writing on the wall? You have really mis-handled the whole BK.
When in a hole, stop digging.
I’d try a hybrid scheme that’s like hedging: do some contract work along with some business investment. That’s because it’s good practice not to put all your eggs in one basket. I’m working on a facebook app that I hope to use for resume as well as a revenue stream. so if you can do a project like that, which would work a few different ways, you might be pleasantly surprised that your return leans a bit higher.