Learning To Leverage Your Past Failures

When I was a teenager I was always broke, a problem not uncommon to teenagers. And when you have NO MONEY, you do what everyone else does.  Find a job.

As a teenager a part time job easily fixed my catastrophic dilemma.  Soon I was delivering pizzas for a local place in my town.  The job was part time after school and earned me some good spending money.

I did not realize this early mistake.  As a teenager I had all the time in the world, so trading my time for money seemed like a simple solution.  You need money, you get a job.

First Mistake: Trading time for money (ONLY).

If I had paid attention, my first job could have supplied me with infinitely more value than spending money.

Neal, the guy who owned the pizza business, was only about 10 years older than me and had begun growing a successful business in his 20's.  Imagine what I should have learned.

I should have paid more attention. I didn't.

A few years past and after high school I went to college. In school I never really applied myself and was forced to go community college. (blessing in disguise, no college tuition debt)

But all I did was waste a lot of time (had fun) and finally dropped out and started working a full time job.

Now with a steady paycheck and no responsibilities, I had money. Even extra money.  So I bought stuff: a new set of golf clubs, nice clothes, weekend trips partying with friends.  It was a lot of fun.

Then I learned I could borrow money and financed a motorcycle and then a car. Soon all these credit card offers started coming. Which led to my next mistake.

Second Mistake: Financing liabilities not building assets.

This was another large mistake. I felt like money grew on trees. I thought, life is short, why not have some fun. I can always make more money.

A few years later I got married and we had 2 incomes while sharing the bills. We had more extra money and for a time we felt rich. We started doing what other people did at that age. Try to save for the down payment on a house.

The problem was we had learned to spend, but we had not learned to save. We had car payments and credit cards payment that ate the bulk of our money. And of course we wanted to get better furniture, a nicer apartment, vacations and eating out at restaraunts.

No real savings, but life was good. And then came the kids, which made life great!!!

But saving for a house took last priority. Years passed and we raised our kids. We finally did get the house, a moderate 3 bedroom which we loved.

But we had no real money saved, the kids were teenagers and college tuition was around the corner. And I had been working a dead end job that left me exhausted and dead inside.

I knew I had to do something quick or our family would never get out of the debt snoball that was growing.  But what could we do?

I thought back to my first boss Neal from the pizza place (who now had a half a dozen resturaunts and owned commercial properties all over town) and I knew I had to start a business.

This was not a completely new revelation to me.  I had been trying to start side businesses for 15 years with varying levels of success and failure. Mostly failure.

But now the stakes were higher.
I had to make something work.

About this time, our family visited a specialty franchise business that we loved and I saw the earning potential with a pretty low start up cost.

The day following my first visit, I called to inquire about starting my own franchise. Seven months later and a loan from my 401K, we opened our doors to great crowds and great sales.  Which was great because the day we opened we had only $400 left to our name.

The business took off and within a few months I was able to pay back the 401K loan and quit the miserable dead end job.

And while we now have more income, the business requires a significant investment of time and labor. Which leads to my newest mistake.

Third Mistake: Build A Business That is Hard To Scale

As of this writing, we still own and operate 2 of these stores (7 years later) and are blessed to have income that paid for our kids college tuition, taught us about business and allowed us to serve our community.

It is a LOT of fun and a LOT of work. It requires ongoing active participation of time and maintenance. And is difficult (not impossible) to scale beyond a few stores.

So I had begun investigating about starting another more passive business. And I got a wake up call.

On November 1, 2022 I suffered a stroke.

So now 7 months later, while still suffering weakness and numbness on the right side of my body, I have begun to take stock of my latest mistake. And making some changes in my daily habits, work life and future goals.

So what have I learned in the past months of rehabilitation and revisiting my life mistakes? There are too many to name, but for the purpose of this article I will focus on my financial mistakes.

And hopefully you can learn from my mistakes.

Fix To Mistake #1 - Focus on skill development not a paycheck.

Creating value for a company and in turn getting a paycheck is a pillar of work. Working for a paycheck is not the problem. What you don't want to do is to work ONLY for money? Trading your time for money is the worst trade you can make.

Do this instead! Focus on jobs that give you opportunity to increase skill sets, especially early in life.

My early work in a restaraunt could have increased my skills in customer service, sales, upselling techniques, inventory management and personnel training.

Fix To Mistake #2 - Use income for building assets with positive cash flow.

Most people use their money to finance purchases such as cars, vacations and nicer things. And the money they have leftover after paying monthly bills is used for the future.

Do this instead! Instead of borrowing money to create debt, minimize liabilities and use extra finances to buy or build assests.

But not just any assests, only those that create positive cash flow. Most people think of their home as an assest, but your house does not pay you each month in positive cash flow. (only when you sell, but then you have to buy again)

Rule of thumb: Consistent Positive Cash Flow is an Asset!

Once you have one asset producing cash flow, then you can use that cash flow to buy or build other assests. Keep this going until you have reached 1.5x your monthly income and you can walk away from your job.

Then you are ready to focus on the third remedy.

Fix To Mistake #3 - Build assets that grow without you.

Many entrepenuers know that a business is a great positive cash flow asset. The problem is a business is usually highly dependant on the owner showing up every day. Usually working 60-80 hour a week. And while the money is better than a job, most business owners have simply built for themselves a highly stressful better paying JOB.

Do this instead! Learn to build cash flow positive assets that will eventually grow without ongoing large investments of time and attention from you.

This allows you to focus on the things you really care about; family, friends, helping others or even building more assets.

Once you have assets in place that produce a growing monthly income, then you think about buying those new cars, long vacations and nice things. The difference is the money is not financed (debt) and you continue to generate cash flow (asset) while you enjoy them.

  -  Jason Dillingham, Curator of The Art of Intention, (c) 2023

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