Several entries ago, I wrote about how one of the proudest achievements of my life originated from the money my friend loaned me for business. Now I’ll reveal why.
It wasn’t the advertising campaign succeeding – it failed.
It wasn’t either of us making a ton of fast money – we didn’t.
Instead, it was how I paid my friend back.
Every month, without fail, I wrote and mailed him a check for $500. Somehow I made it work, even when I was earning $12 an hour, paying for rent and food and car repair… and then eventually state taxes owed on top of that.
Then the gold-buying business went bankrupt.
Few people living a middle or upper-class lifestyle in the United States understand how vital it is for those near the poverty line to get their hands on consistent “right now” money. A mere missed week of income can mean the difference between paid bills and a roof over your head… or penalties, a repossessed car, or worse.
Imagine being cut off from oxygen… for a “mere” five minutes
(Which is why savvy employers offer daily pay for low-wage jobs.)
In 3 days, I landed a new job. But it didn’t officially start for another week, and that gap punched a near-deathblow to my finances.
I called my landlord, explained the situation, and asked for a few more days to send my rent check. He allowed it.
Then I wrote another $500 check to my friend, and sent. Paying back my business loan would absolutely not be delayed.
That was, I as much as I can remember, the second-to-last check.
Eventually, I paid off the entire loan. Not a single payment was even a day late.
No drama. No whining…
No twisting his arm because he was a friend. No avoiding the issue. And no making excuses because I was near-broke.
When it was complete, I knew I had planted a multi-million-dollar seed, in a way no other action could have done.
After all, anyone can talk shit about money. It seems most people do. How they want to make more, how they try to save, and why they should definitely, totally, really really should have some. I PROVED when the chips are down, you can count on me. How rare is that? What repercussions would it create?
These are just off the top of my head:
- My friend will always remember that I paid him back on time, so he’ll see me as a safe investment in the future. This has a number of benefits because I predict my friend (who is already a successful, connected businessman) will continue to grow and prosper. Plus, any loan I ask for in the future will have a higher likelihood of being granted, and I’ll be able to ask for much better terms.
- I’ve trained my “money muscle” to be much stronger when it comes to savings, asset allocation, awareness, and discernment. Simply by going through the struggle of repaying a business loan, I’ve developed an unconscious proficiency related to wealth, that people who read and ponder about abundance can only dream and hope for.
- I have a success story I can refer to, when negotiating with others.
- I have a success story I can refer to, when instilling confidence within myself.
- I have a neat story to write about, that could inspire others to financial stability and abundance, possibly when nothing else could strike a chord within them in just the right way.
Not a bad return on investment, just from doing the right thing.
If more people understood and practiced this, there’d be many more rich people out there
Note: I’m compelled to answer the question permeating the energetic airwaves: What would I have done if I truly couldn’t pay back the loan on time? Like if the new gig had fallen through and I was unemployed for 30, 60, 90 days or more?
Again, off the top of my head, I would first determine that I truly couldn’t pay him on time. Then I would immediately contact my friend to explain the situation. Filing for Chapter 7 bankruptcy would not be an option as I’d done so only a couple years prior. Filing a Chapter 13… eh, maybe, but I’d rather negotiate in private.
I’d ask to change the terms. Longer payout in exchange for more interest. And even if my friend turned into a cold-blooded animal, the profit derived from him squeezing me wouldn’t be worth the financial expense and mental effort. So I’m sure he and I could have reached a fair agreement.
Another note: If I had used the above process with all my creditors back in the day, including the IRS, I might have been able to avoid my bankruptcy and even ended up in a much better financial position – let alone the better credit history. Live and learn. Or, perhaps in the case of some folks reading this, read and learn so you don’t have to live and learn.