Patricia
BTGNow.net
Dani
debt kid
VA Loan Guynothing to lose, everything to gain
My whole life seems to be turning upside down these days.
- I will be living in my office (for at least a short time…maybe longer) in 2-3 months, assuming I can get my house sold
- I am no longer in the business I began 2 years ago, and though in the same market niche, am doing something I never imagined (but I do enjoy)
- 2 of my close friends are moving out of the state, leaving me looking for new friends (in all my spare time! right…)
I am meeting with the credit counsling place again today. We are going to get a debt management plan set up. This will be a good thing for me longer term. The only problem I have is that a good portion of my debt is under my business (though personally guarenteed by myself and my social security number). The lady was not sure if business debt could go in the DMP. I really doubt it.
The good news is that I already negotiated my 4 Citibusiness cards down to 0% for 12 months. The bad news is that I have 50K in 2 business loans with WAMU and Wells. WellsFargo closed my business account, and I told them I would be calling them this afternoon to figure something out (after I talk with the debt counseling agency).
So, at this point, with nothing to lose (my house is going, my friends leaving town, the girl I was interested in has a boyfriend now…) what am I?
Very dangerous.
Not in a bad way. No, I’m very dangerous in the sense that with no ties, very little commitments (outside my business), and a hell of determination to get out of this mess, I have a freedom I’ve never had before.
Since I stopped trading and came clean with the family (it’s been over two months), ideas have been flowing like water. I’ve had more great business building ideas in the last 2 months than I had all of last year.
And I am actually acting on them, not just dreaming about them. Our advertising program is generating over 7K a month now, and I have a pretty solid plan to stabalize this income, and grow it to around 12K in the next two months.
12K a month? Holy crap. That’s a lot of money. And with my biz expenses running a little over 5K a month, that’s not bad for takehome pay (not that I would take all that home of course).
But that’s just the beginning. I think I can start up two new programs this year (in our same niche) that will generate 20-30K if they go as planned. 40K a month? I could stop writing about all my problems here with 40K a month!
I have alot of work ahead of me. Lots of work.
So, I am excited. I am scared. I have nothing to lose, and everything to gain.
Side Note: I’ve noticed that nearly half of the traffic to this blog comes from that crazy Casey Serin kid. I don’t have time to read all his posts, but my gosh, that guy is crazy. I have to give it to him though, he does know how to write compelling content, no matter how nuts he sounds most of the time. I think I should challenge him to a business contest or something (ie, whoever gets to 20K a month first in net profit buys the other dinner or something). Anyway, just a thought.
P.S. Thanks for all the comments, some have been very useful! (that is one of the other reasons I keep writing here…some good encouraging comments) Some people bash, but that is totally understood, and I deserve it. I won’t deny that. But it’s nice to hear encouragement as well.
on March 22nd, 2007 at 4:41 am
Its very inspirational reading your blog.
Congratulations in negotiating your 4 Citibusiness cards down to 0% for 12 months. When you get a chance could elaborate on how you did this?
on March 22nd, 2007 at 6:39 am
You are doing all the right things and Casey none of them. Don’t waste time on him! I think you have figured out that trading was not for you, but maybe you have a big potential in the business you are in. It’s good then to focus on that. I am still trying to work out whether trading is for me. Gradually I make money at it but then suffer blowups like yesterday which set me back for a while.
on March 22nd, 2007 at 1:51 pm
Your business sounds like it’s doing very well. It seems like you’re going in a good direction fairly fast.
0%! Like a previous commentor, I’d appreciate more info about how you did this? (I am working on paying off some debt right now).
on March 23rd, 2007 at 9:01 am
Moom is right.
You got yourself in a mess, and you are working your butt off to get out of it. You are everything that Casey Serin is not. A business challenge with him would be like shooting fish in the barrel.
Challenge him instead to a taking the garbage out contest. I am serious …. challenge him to a contest to see who can most consistently take the trash out for a month. If you manage to get your garbage to the curb at least 80% of the time, you will win.
on March 23rd, 2007 at 10:02 am
DON’T GO ANYWHERE NEAR CASEY!
This is just a friendly PSA.
You effed up but really seem to have your sh*t together now.
You’ve admitted your mistakes and have talked to your family, Casey just used his to try by offering them a 24% return for investing with him.
You are talking to your lenders and working out payment plans, Casey won’t talk to any of his lenders and hasn’t paid a penny in MONTHS.
You washed your hands of real estate deals and are MAKING money doing something you’ve come to like, Casey is trying to find the next sweet deal and lining up “money partners”.
You are making sacrifices (i.e. ramen and living in your offic), Casey thinks he deserves Jamba Juice and dinners out.
Good luck and I can already tell you will make it, keep focused and keep working hard,
on March 23rd, 2007 at 10:35 am
Casey is crazy, and delusional, and isn’t doing a whole lot to crawl out of the mess that he’s in. You don’t seem crazy or delusional, and you’re taking active steps to get rid of your debt and expand your business. Big difference. He may achieve more notoriety (much of it negative), but you’ll actually have achieved something.
Speaking as another young person with some investing experience, the investments that I’ve had success with over the years are high-yield CDs and savings accounts for short to medium term needs (operating cash for a business, purchase of a vehicle, down payment for a house), and no-load mutual funds with a low expense ratio for long-term needs (retirement).
The investments I haven’t had success with–and which, seeing the lack of success, I got out of before committing large amounts of money to–are active trading, mechanical trading strategies, and “hot” fund/stock newletters/reports.
I know that your situation right now requires you to invest in paying off your debt and operating your business, and it seems like both of these investments will net you very good returns.
on March 23rd, 2007 at 10:41 am
You are an anti-Casey, as you are actually working very hard to do the right thing, and I applaud you for that.
Again, I have offered this to you before, and I will offer it again. I’m willing to go to bat for you. I’m an economist by training. Contact me if there’s anything in my area of expertise I can assist you with
caseyserininfo@yahoo.com
on March 23rd, 2007 at 11:22 am
Dunno if you’ll avoid bankrupcy. Do know you’re finding the right ideas. Keep finding them and we’ll just see what happens.
on March 23rd, 2007 at 7:29 pm
I really enjoy reading your blog. I think it has inspirational value for others, and possibly theraputic value for yourself. Please know that with your willingness to work hard and your honesty you are winning people over.
Please don’t compare yourself to Casey. His blog is an excercise in frustration. When he is finally foreclosed on, he will have nothing positive to take away and his web traffic will suffer as a result.
With your positive attitude and hard work, you will succeed. Even your failures will have value, for you will have learned from them.
on March 23rd, 2007 at 11:16 pm
You are doing wonderful. Just keep it up and remember, you owe them money…..you don’t owe them your life!
on March 25th, 2007 at 8:09 pm
I’m one of the ones who found you through comments on Casey Serin’s site, and am glad to see you’re pulling yourself out–the right way, it sounds. Casey, unfortunately, is still hoping for a solution that requires no work and a lot of luck, so I have no doubt who’d win the contest you’re proposing. Keep at it!
on March 25th, 2007 at 10:22 pm
Hi there,
How did you end up with so much debt? You say it was through bad trading (forex, options), but I haven’t seen any posts that go into much detail about that. But those kind of trades are definitely not for amateurs.
Did you just not know what you were doing? Or did you fall victim to some scams? Maybe your trading became an addictive form of gambling. Anyway I would be more curious about how you ended up losing so much money day-trading or whatever. Blogging about that part could be helpful to coming to grips with what happened.
But good luck with your efforts, you seem to be approaching this rationally and realistically, making sacrifices and setting goals to deal with your debts and actually contacting your lenders and following up.
on March 26th, 2007 at 10:39 am
I am really impressed with the class, determination, and dignity you are exhibiting as you attempt to right your wrongs. You may have made some mistakes, but you’re handling those mistakes in an honorable way. My hat goes off to you. Your parents raised a fine young man.
on March 27th, 2007 at 6:56 am
I admire the fact that you have the balls to stare down your mistakes and try to fix them. Unlike some other deadbeats.
Just remember, you are still young and you have your whole life in front of you. Everything is not always as good as you might think when you are successful and everything is not always as bad as you might think when you are struggling.
on March 27th, 2007 at 6:37 pm
One thing that you seem not to have thought about is getting investors in your company. Your current and projected revenues would be enough to give you a decent valuation. You could hire a lawyer to incorporate, take money from investors, you’d still control over 50% and you’d have enough cash on hand to pay off some of the business debts.
I worked for a tiny, failed internet startup for a couple of years. In the middle of nowhere, Texas, as a matter of fact. And we had no problems getting investors through my co-founder’s well-connected father. All we had was an idea. We never generated a dime of income but we managed to get several hundred thousand in funding (of course, our idea was one of the ones that theoretically could end up being worth eBay- or Amazon-style $billions, while the potential market for your business seems considerably smaller; but still).
You have an established business with a good cash flow as well as a solid plan for increasing your revenue. That’s worth something. You can come up with a valuation based on that. Say $200k. I personally would pay $5k to you in exchange for 2.5% ownership of your company (I would need to do some due diligence first, but from reading your blog, you seem to be the kind of person that I would trust with it — even so, I’d go into it fully knowing that there’s a decent chance that I will lose my entire investment). I’m sure there are other readers of your blog here who would be willing to pay similar amounts. There is so much money out there that you would not believe it. People are sitting around with money burning holes in their pockets, looking for new things to invest in. So you could use that valuation (which may be somewhat conservative) to raise $98k, and you’d still own 51% of the company.
You could do it a couple of ways. First would be to create the corporation with 10,000 shares that you own. You trade all of the company’s assets (which, presumably, are currently your personal assets) to the corporation, and in exchange you receive 10,000 shares of stock. Then you, as a stockholder, sell off the shares to other individuals based on the valuation. That way the money would go to you for your personal use. The other way would be to issue yourself 5,100 shares of stock and then issue further stock from the corporation, and all funds raised would go to the corporation’s coffers for business use. $98k would be enough that you could pay off all of the business debt and still have $10k left over to help with cash flow for the next couple of months.
What would be the downsides? Well, you’d have somebody to report to. You would have to provide detailed financial statements to investors, but that would be a small amount of work. It would be a way of keeping you accountable and focused on the business. When you share your financial statements with 10 other people every 3 months, you find it hard to hide things like gambling on the stock market. You’d need to pay yourself a reasonable salary out of the revenues, and profits would be allocated according to the Board of Directors (which you could effectively control with 51% ownership). So you’d reinvest some of the profits and give some out as dividends to the investors (including yourself). So you’d basically be giving up half of your potential profits from this business, forever. But it would go a long way to getting you out of your current mess, and maybe it would be worth it. You could, of course, gradually buy out your investors at whatever amount you could negotiate.
Anyway, it would probably cost you $1000-$1500 in lawyer’s fees to get all of this set up. If it sounds like something you’d be interested in, I’m sure you could put a more definite price on it with just a little effort. And honestly I don’t think you’ll have problems finding investors if you decide to go this route. Anyway, e-mail me if you want to discuss this or other possible plans.
On other notes (I just got done reading this entire blog), you definitely need to sell your house. No doubt about that. You may also want to discuss it with your roommates / tenants about it. Maybe they would want to buy you out if they like the house and have the money to spend. Since they are already living there then there might be a way to create a win-win if you explain your situation to them. You sell to them, avoid foreclosure or a short sale, catch up your payments and they get a good deal on the house. Even if it requires a promissory note from you for $25k or something to make up the difference, the payment on $25k is a lot less than on $400k.
Just stop worrying about the girlfriend and the social life. Running a startup small business is choosing to put such things off for a couple of years. It’s just so much work. Running up a whole bunch of credit card debt makes it even worse. Yes, you need some balance in your life just to keep from going crazy, but a girlfriend is probably not in the cards for another year or two. You can’t afford the money (because of the debt) and you REALLY can’t afford the time (because of the business). You just have to keep your eyes on the future. Once you’ve got that $40k/month revenues then you will feel like such a badass and you’ll be able to spend plenty of time and money chasing women. Just try to put it out of your mind, and do whatever you need to do to keep from going crazy. Don’t feel bad about it. It’s better to do it this way. A lot of people get married right out of college, get crappy jobs and then go on have regular fights about money, and it only gets worse once the kids arrive. Getting the money taken care of first is the wise thing to do.
Otherwise, keep your head up. You are making good progress. It might be nice if you updated your spreadsheet to reflect the current situation with 0% interest, etc. E-mail me if you have questions or need help with anything.
on March 27th, 2007 at 6:43 pm
Just wanted to say two quick things. First, I don’t envy you, but I certainly respect what you are attempting. I’d imagine that most who read your blog are gunning for you. Second, It will probably feel like you are drowning at times. Try to think of where you want to be in 10 years. Maybe at that time you could write a memoir or something. I am sure it would contrast nicely with whatever memoir Casey Serin would write.
Either way, best of luck.
on March 28th, 2007 at 3:02 pm
I’m also another who came here through Casey Serin’s blog. I think it’s AWESOME that unlike him you plan on paying back “every dirty penny”, and it seems like with your business acumen, you’ll be way in black with your business as soon as your debt reaches $0. I remember the days when I had to eat ramen and sell CD’s on Amazon to make ends meet. A few years later, now things are stable with no debt (though no assets since I rent… but that also means no liability), packing away 10% for retirement, I can have all the Jamba Juice I want, hold the wheatgrass shot. Just hang on dude!