Around 2 years ago, I read an interview with Ryan Holiday. I cannot locate it, but the gist was:
"If I lost everything and had to start from scratch, I would be fine. Really."
When I was 19, I interned at a financial planning company. I met with the manager/boss of the branch in my first week.
As I understood from others, he had a pretty high-income. Somewhere in the $250,000 - $450,000 range. He also had a PHD in philosophy, which at the time sounded like the greatest thing in the world.
He told me: "If I was randomly parachuted out of a plane and landed anywhere in the world, I could create wealth. Anywhere, with my skills and philosophy background, I know I could make something happen."
Talk is cheap, but it sure sounded good.
Now, asking this question to myself: "If you lost everything and had to start over, would you be okay?"
First off let's define losing "everything". My working definition would be:
- Bank accounts at 0
- IRA, Stocks/Mutual Funds, Real Estate Investments would all be gone.
- My product businesses and consulting projects would cease to exist. However, my experience and learning gained from the work would remain.
- I would still have my vital possessions, clothes, laptop, ukulele, iPod Touch, and Kindle.
- My credit cards would have a $0 balance and about $12,000 in available credit to use.
And what exactly is "okay"?
- NOT bitter or resentful about the loss.
- The self-confidence that you can make it back.
Two years ago, I would have been crushed. Losing even my modest amount of assets would have shook me to the core and made be feel like a "failure" I'm sure that I would have made ends meet, but I don't know how long it would have been for me to get back on my "entrepreneurial mindset".
Today, I have a better, clearer outlook.
I estimate that I would have about 3 months to invoice and get paid. Around that point, the credit card debt would be mounting, and combined with the lack of success .. it would probably throw me off.
Luckily, there are so many odd jobs I could do that would take less than two weeks to get off the ground: English lessons, Math tutoring, Translations, Bartending.
So I could pay the bills at the very least. And I believe that I would be able to launch some side projects/consulting in those first few months that would get me "back on my feet". After a temporary shock, I the composure and confidence would return.
Recently, I spoke with a good friend of mine. He has a stable job and is risk-averse in many areas of life. Especially when it comes to money.
When I told him some of my new projects he asked, "But, are you putting your own money into them?"
I told him, "Yeah, of course."
"Well, be careful.."
I do appreciate the genuine concern from my friend, but there is/was nothing to worry about. Trying, failing, and learning via my own cash investments is not a big deal. It is what I have been doing and will continue to do.
At the end of the day, it's not the loss of cash/assets that will break you. The greatest risk is a loss of self-confidence. The feeling that you have fallen too far and no longer have the skills and drive to make it back.