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The Perfect Storm

Prologue

In 2002, a series of events brought my financial life to the verge of collapse and threatened to pull down the rest of me with it. Never before I had experienced intense feelings of frustration, fear, anger, despair. Mid 2002 through early 2004 was my darkest hour of my life. I wasn’t sure I would make it through. I wasn’t sure if I wanted to make it through.

This is the story of a financial perfect storm. My own…

He who sows winds will reap Hurricanes…

The principle of action-reaction applies to all aspects of one’s life. This is a natural process that we tend to distort because of the way we program ourselves to interpret the events that occurs in our lives. We tend to frame the results of our actions in terms of success and failure. We learn to do this very early in our lives, usually starting at school. There is a line of thinking that proclaims that all events are neutral and have a purpose; and that within that purpose there is no such thing as success or failure, only feedback, and that this feedback is a vital part of our internal learning system. We have also heard the say that goes: “Those who do not learn from history are destined to repeat it”. Framing our experiences in terms of success/failure makes difficult the task of learning from events that we deem as negative because we don’t want to be “losers” or “failures”. We protect ourselves from failure by assigning blame outside us.

Another important principle that appears to determine one’s outcome in life is Responsibility. Others prefer to call it Respond-ability to avoid the feelings of “guilt” usually associated with an undesirable outcome. Either way, this principle establishes that we are either, the masters of our lives or, a victim of external circumstances; i.e. things happen to us. We seem to be wired to readily accept “credit” (responsibility for things going good), and to deflect “blame” (responsibility for things going bad). In the first case we are in charge. In the second case we become victims. The problem with the last case is that by becoming victims, we automatically miss the opportunity to “learn from history”. When something bad comes our way, we desire to avoid feeling bad about ourselves, and we quickly assign blame for the undesirable event on others or things outside our control and quickly forget about it, or so we think we do (in reality the matter goes into our subconscious where it keeps bugging us in ways we can’t explain). We repeat to ourselves that we were just “victims” until we end believing it. The last thing we want to do is to discover that we could have done something to prevent it or to limit its damage. Since whatever was that went bad was not our “fault”, we do not develop alternatives for the future. Therefore, we pre-dispose ourselves for continuous disasters.

One example: Have you ever heard of people who are always stuck in bad relationships? They could not seem to find the “right” mate. They have “bad luck”, always getting a raw deal. Don’t they? Perhaps it is that they attract those types of people! But if you point that out to them, you are sure to be labeled as “rude” and “insensitive”. How do you dare suggest such a thing! However, taking that assumption (that is it they, who attract the wrong kind of people), leads to explain better such a “mysteriously constant” occurrence. Furthermore, this assumption also provides the basis for changing the outcome. It gives the person control, options and hope. But one has to be strong enough to take responsibility for everything that occurs in one’s life.

Applying the principles outlined above I could rephrase the summary I wrote at the beginning as follows:

In 2002, a series of events exposed how, with my poor cash flow management, I brought my financial life to the verge of collapse threatening to pull down the rest of me with it…

With this background laid out, I now proceed to tell the story of my financial perfect storm and the insights I gained from it.

Sowing Winds
Setting Sails
An Early Warning
Roger "Credit"
My Second Warning
The Last Days of Pompeii
The Tempest!
The King is Dead
Corollary

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