The Financial Costs of Supporting a False Image from My Life University

1995 Jeep Grand Cherokee

I bought a top of the line forest green Jeep Grand Cherokee a few years ago in Mt. Vernon, Washington.  It was the newest vehicle I had ever owned and it growled with power!  I felt accomplished when I drove it.  My friends and family could smell my success in the leather of the interior.

The jeep portrayed the image I wanted people to have of me.  I was starting a new business and wanted everyone to believe it was a success.  I followed the "fake-it-until-you-make-it" mantra. It worked. I was able to fake success right up to the day I had to give the jeep back to the bank.

I had convinced myself success was a privilege of the brave.  Those brave enough, deserved it and got it.  I was brave, and following documented success formulas, so it was just a matter of time before I was successful.  That is until my stupidity ran into my arrogance and it was time to pay the reality check.

One of many lessons I learned during this painful season of my life, was to not undervalue the cost of risk. I believed courage and hard work could overcome risk.  They couldn't.

In the late 90s (dot.com era), many of my friends worked in Internet start-ups.  They jumped from one start-up to the next chasing the stock option dream of a big payout.  They used all of their available income and bonuses to invest in more and different Internet start-ups.  They accepted risky jobs, with risky start-ups, in a risky industry and then re-invested their money back into a risky market - effectively doubling down on their bet.  Most lost it all when the dot.com era ended.  There is a real cost to risk.

I have learned over time that my behaviors and those of my high tech friends toward risk were not so unusual.  Many people take on large student loans, credit card debt, large home mortgages and car payments all assuming things will go well forever.  Isn't that poor risk management?  I received my education on risk management from MLU (My Life University).  I took out high-interest loans to attend.  Here are some things I learned from my mistakes that can hopefully be useful to you:

• Manage risks carefully.  It's not about your manhood, moral fiber or level of courage. It's a math thing.
• The more risk you are exposed to - the greater the chances of bad things happening.  Again, it's a math thing.
• If you want to take a risk, save up enough cash so you can pay the cost of risk. There is always a cost and you can't escape it.    
• Risk does not necessarily equal reward.  Often high risk pays very little potential reward for the level of risk exposure.  For example, risking 5-years of your career on a poorly run, money losing start-up that pays you less than market value and doesn't provide stability or a career advancement path is highly risky.  Why risk so much?  Move on when risk exceeds the possible reward.  It's a math thing.
• Problems in business, personal finances, employment, health, relationships and mental and emotional issues are guaranteed in your lifetime.  In fact, it is rare you will have a season of life without some or all of these things happening.  They are not a distant possibility for the unlucky few, they are absolute guarantees in life and come with a cost. Invest in understanding them so you have frameworks for working through them.
• Many life events are not under your control.  You need close supportive relationships, spiritual, moral, emotional and philosophical frameworks and tools to help navigate a scary and unpredictable world.  Invest in these.  A meaningful relationship with God can help you get through a lot.
• Today the average person will stay on a job 4.1 years.  If you work 40 years you may have nearly 10 different jobs (am told it is a math thing).  It is best to acknowledge the transient nature of employment and prepare yourself mentally, spiritually, financially for change.
• Life is more fun without debt.  You can live an extraordinary and meaningful life of friendships, adventure, service and flexibility if you are not a slave to debt.  
• If all your emotional energies are consumed by debt worry, you have little energy left to invest in loving relationships, joy, creating beauty around you and investing in life changing experiences and service projects.
• Debt multiplies risk, increases stress and limits freedom.
• Be real.  Be authentic.  It's healthier, cheaper, more enjoyable, and less risky than propping up an expensive image on a credit card.  
• If friendships and social status has been developed and propped up based on an image that is not authentic or financially sustainable - confess and start fresh.
• Many a childhood dream is squashed under the weight of debt.
• Many golden years have become leadened burdens because of poor risk management and not predicting the predictable.  It's a math thing.

When I was in school I complained, "When am I ever going to use this math in real life!!!?  The answer is I didn't and it cost me big.

Want to read more?  Read Formulas for Success that Don't Work.

************************************************************************

Kevin Benedict

Husband, Father, Writer, Speaker, Traveler, Jesus Fan, Life Addict

Follow me on Twitter @kevinrbenedict

Read My Blog! Way Word Traveler

Read Shawna's Blog! Words on the Way