I grew up with a father who ran (and still runs) a very successful and profitable business. He has always had his personal finances and fortunes tied very tightly to his business’s well-being, and because he’s a good businessman, that has worked out well for him. He has 100% of his retirement tied into his business, and is quite secure in it.
Because I saw that being modeled, I naturally grew up thinking that was the way things needed to be for me too. Start a successful business, grow it, keep investing in the business, and it will be my retirement plan and savings, growing all along. I’ve started many businesses, and am self-employed today, but none with the success I see in my father’s companies and none of my businesses have the remotest chance of being a source of retirement savings and income for me. When I’m not working, my businesses stop making money, and they would fail if I tried to draw a retirement income from them.
When I realized that I’m not getting any younger and my ideas of retirement were very different from the ones my dad was enjoying, I got very discouraged and started thinking that I would never be able to retire, no matter how hard I worked. Because I never educated myself and was never taught the ideas of retirement savings and compound interest over time, I became convinced that I had missed the boat on retirement back in my 20’s and I was too late to be able to save or invest any meaningful amount into savings for retirement. I also carried a large amount of debt and was facing a divorce and child support payments that were already forcing me to work two jobs just to keep afloat. Lots of reasons to be discouraged about my retirement ideas that I was starting to see on the distant horizon.
In my mid-30’s, I had:
Tax debt of more than $30,000
Credit card debt of more than $4,500
Child support payments of $950/month
House payment of more than $1,100/month
And a mess of other smaller debts and costs per month that were keeping my finances in a real bind.
Things were looking bleak for my future and I was feeling overwhelmed and hopeless. I know I’ve referenced Dave Ramsey many times in my blog, but he really is the one who opened my eyes to personal finance and how, using a series of intentional small steps over time, I could climb my way out of my financial nightmare and begin dreaming again. His book, The Total Money Makeover, changed my life, and my family’s future. I’ll go in to details later on.
Personal finance was a mysterious thing that I didn’t understand and didn’t think would be much use to me because I thought I could never have the finances to use strategy and planning. I was 100% wrong. When assets are low, is when personal finance strategies are their most useful and important. Not to mention how interesting and heartening it is to see how using one’s money wisely, you can lift yourself out of debt and poverty, and have a plan to build wealth.