Having a Debt Free Business ~ Or Do You Really?

In 2008 I purchased the business I’ve had for the past 5 years. I was going to be one of the smart ones, I was paying cash. No financing for me. I sold my stock and bought my business. This was the fall of 2008. While sitting in a hotel room at the training for my new found bundle of joy, I watched as the stock market tanked right before my eyes morning, noon and night. I was losing everything. OMG, what did I do? I just left my solid job over over 20 years for this small business opportunity in my town. I left a high paying gig for one that didn’t promise me a penny. (another long story one day).

I have worked hard to not go into debt. However, right off the bat, my franchise expected me to pay for a new machine that was madatory. Boom, dang, guess that $10,000 visa card will have to used since I didn’t have a few thousand to pay that nice tab. A year later, boom,  I was required to buy a new register system they required with another few thousand $ price tag. Slowly that credit card was maxed out due to the little “emergency needs” that popped up. Just like in our normal life, Murphey was a calling and I never set up an emergency fund. There were no profits to pull a salary never mind pay for new equipment.

One of my large vendors allowed you to pay a week or two into the future. Slowly that also crept into having 2-3 weeks of debt.

emergency fundSo while I may have orginally purchased debt free, I really didn’t truly stay debt free. My debt monitor shows a debt of $153k. Hmm, lot of debt for a debt free company wouldn’t you say? My “true debt” is probably around $25k but I am including the remaining time on my lease. I owe them no matter what happens (open or close). So until that lease is paid off and I am no longer in business I will owe.

The lesson I’m trying to share is, if you are going to be debt free (which I highly recommend) please, please make sure you have an emergency fund. Things will break, you will be required to buy stuff, crap happens. Just like in real life, our business is the same. So be prepared!



The Debt That Drives Me Nuts!

Stop Laughing at Me!

As I look at my wonderfully, detailed spreadsheet of debts and ponder the journey I am on, there is one debt that just laughs at me.

laugh at me

Don’t get me wrong, they all laugh at me, but this particular one is having belly laughs and rolling on the floor. Not because it was from some stupid tax. Not even because it has been around so long it is now a pet, as Dave says.

No, this debt laughs at me since it is my lowest debt, but in the big picture it is so minor. It is the left over of a 2nd mortgage of a rental home. It is less than $1000 and has a very low interest rate. It laughs at me because it knows I would love to pay it off. (And probably should), however my nerd in me needs every penny to drive down these credit cards that have such a high rate and I can barely keep ahead of the interest.

Maybe it is good to keep him around to just remind me of how silly I was to take out seconds on all these rental homes. He is the poster child for rental stupidity.

So I laugh at you (HA HA HA) you little baby debt. One day you will be gone, for now you just sit there and mock me. I’m ok with it.

Ha Ha yu poor


Someday I will kick your butt to the curb!

Hanging in There…. Debt will NOT Win!

Hang in there

Whatever you do… Don’t Let Go!

Well I’ve been telling my story and before I get into the next phase of it, I thought I’d update those cool little graphs I put in my widgets. This way you (and I) can be reminded of how far I have come. The way I see it, if I can hang in there, so can you.

I’ve noticed when we focus on where we are, we forget where we started. Kind of like climbing a mountain and seeing the peek so far off you get discouraged until you look down and see how far you have come… (not that I’ve climbed any mountains lately but I’m gonna assume it might be the same)   🙂

Or maybe when you are so full and realize you can’t possibly eat that last piece of pizza until you realize you already at 7 slices. (Hmm, maybe that doesn’t work either….) Anyways, you get the point.

You see, as crazy as my $1.5 million of debt looks to me, I am amazed that I’m down $300,000 in the past year and half. Granted, I’ve sold some things and plan on selling more things. But hey, it all counts. It leaves my debt column and that is what counts. Now that I’ve got an a small income coming in, I can pay what I can which will keep helping too.

The hard part is to not get discouraged. I know it will take me years to get out of this mess but I am determined. I hope you are determined too. Don’t worry, I’ll make sure there is plenty of room on my rope for both of us to hang on too. We can do it! We will do it!


How Did I Get Into This Debt Mess?


I guess you are wondering how I got myself into this mess?

 broke the bank

I might as well start way back when. This isn’t some movie that starts at the end and messes with your mind when you blink and you are back 30 years ago. Then again….

I should warn you, I can be a smart ass. Humor is what keeps me sane. You see, I refuse to let my situation define my attitude. I have no doubt that having a positive attitude can help you out of anything.

I’ll give the short version of my mess, then we can explore in more detail as we go.

I had a great job. I made great money. Nothing crazy great but money people would go oh yea. But it wasn’t always that way. I worked my way up in my company, got stock options, let them grow and eventually I bought some rental properties in 2005 thru 2008. I can hear the gasp in audience now.


So yes, most of my 1.8 million of debt is houses. However, I wish that was my only foolishness. No, like many folks, I still have over $200,000 in other debt.   :-O    Yes, OH MY!  Probably even more but we will get to that later.

My point is… my story isn’t much different from yours. Maybe you didn’t buy a bunch of rental homes, but I bet you racked up credit cards, bought a “toy” or two you really didn’t need and maybe even made foolish career choices.

Unlike many folks, I didn’t have school loans. The couple of years I went to school I actually paid for it…. on my credit card, but I paid. LOL.  Seems funny typing that. It would have been cheaper to get a school loan.

But no matter how we got there. We got there. The important point is now I’m trying to get out of it. I try and find inspiration from those winning this war on debt. I quote Dave Ramsey due to the fact that many times over the past year, his radio show has been the sole piece of “hope” I held onto at times. Yes, I was better than I deserved. But, like many things, more on that later.

So the answer to the question – How did I end up in this mess?  Easy, one loan at a time. One stupid decision at a time. And I’m pretty sure there were times when I did them all at the same time.

debt weight

Tomorrow, I’ll take you back to the memories that started this silly ride….The memories I thought I was using to make smart decisions. Turns out, maybe, just maybe…. I over thought it.