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

Setting Sails: Entering into the "Real" Labor Market

Half of my college tuition was paid for by my Mom. The other half was financed by the University. I had the contractual obligation to start repaying that debt once I graduated. I don’t remember if I got a grace period, probably I did; but as soon as I started making some money doing drawings for other architects, I started making the payments. It was a while until I landed a steady job but once I did it, I started my long and laborious process of climbing the economic ladder. It was an upstart company and therefore the pay was not that great but to me it was fitting. I had enough to make my education loan payment, and my luxuries. I still enjoyed a subsidized life: No rent, utilities, basic food and some transportation costs. Somewhere along the line I came to know that financial product that soon would become like a drug to me: The Credit Card. At first I was paying it in full each month. But soon enough I was making only partial payments and started the slippery road to uncontrolled credit. The limit was low though, so the potential for damage was minimal.

That job lasted for 2 years and then the company went bankrupt. Thanks to one of the acquaintances I made at that first job, I had immediate placement at another company that was setting up similar services for another subsidiary. This time, the company had a history although the type of services I was hired for were also an upstart. I experienced an increase in pay and being a professional I also did side jobs that brought in more money, however, somehow it never seemed enough. At the time I could not see that with the pattern I had created for cash flow management, it was no wonder why I never had enough. I always had too much month at the end of my money. All I knew was that the “cause” was simple enough: My pay was low. And the “solution” was equally obvious: More money! So I asked for it. I got a raise so small that I felt short changed. When I started with that company it was agreed that my initial pay was going to be somewhat low (still better than the previous company compensation), and that after a trial period of 6 months, pending a review of my performance I would get a substantial increase. Well, despite the performance showcase, my boss alleged the startup nature of the services. I swallowed it and decided to try again later. After all we were just starting a new and innovative project that if successful would catapult the new services and my performance. The project was a huge success. We won praise from our client and the client’s client. My boss was now projecting an increase in equipment investment and I figured it was time to “solve” my problems. My new attempt did not fly and that was the straw that broke the camel. I quit and started my own business.

Before moving forward I would like to sketch the type of life I was having during my days as an employee. It would have profound implications on the events in latter stages of my life.

My first job had low pay and required long hours. It was motivating only because it married two things I was passionate about: Computers and Architecture. There were no AutoCAD schools back then. I had to be self-didactic. With limited English knowledge, it was an outstanding achievement that I could be ready for “prime time” after only three weeks. But that was only the beginning. AutoCAD is a multi-discipline drafting package. In order to provide industry-specific support in a proficient way, add-in packages are required. Back then Autodesk had released one for Architectural applications but it worked only in Imperial units and the standard for our country is the International system (metric). I took upon myself the task of writing our own AEC application. I had to learn AutoLISP, AutoCAD’s embedded programming language. I barely had a “life” as defined by popular culture but I was having a blast! As soon as my earnings increased a little bit I signed on in a club at a local hotel to have the right to use the hotel’s swimming pool. Whenever I felt like it, I would go and relax. Sometimes I would have snacks by the pool side or at the restaurant outside tables.

That continued to happen after I moved to the second job. This time however, it was more of a regular ritual. I was swimming freestyle about 2 kilometers (about 1.24 miles), non stop. I also owned a VCR and rented movies almost every other day. I also had a love life which added frequent dining outs and a new meaning to going to the movies.

Now, it is time to get back to the financials. You would expect that with such a subsidized life I had it easy starting my own business, right? Wrong! I did not have a SINGLE CENT! Almost 3 years on the labor market and I had nothing significant to show for it. Sure, I had met my loan obligation, have good clothes, a music collection, a few electronics and the memories of dining out with friends, family and my girlfriend. But absolutely no capital reserves, no savings, no real assets.

To buy the computer I needed to start my consulting I had to apply for credit at a computer store. I had no credit but the person that introduced me to my last job (who also encouraged me to quit), bought the computer on credit for me. I had to come up with the down payment and had to make the monthly payments whether he gave me contract work or not. Well, I had to go to a bank to borrow money for the down payment! Such was my initial foray in business: Bonded from toe to neck and to top it off the equipment I got was the bare minimum required for the job, which meant I had to work hard to afford expansion.

Doors started to open and opportunities came my way. But, the flow of money coming in became erratic in frequency and magnitude while some of my cash outlays were regular in frequency and constant in amount. Instead of elaborating a plan for the creation of a capital reserve, I relied on my growing credit lines to supply for the resources I needed to run the business and my life. And don’t forget that my underlying theory about money had not changed since my childhood: Earn-to-spend. Only now I added something more: If you don’t have it, borrow it! And I had the perfect excuse at that time: I was financing my business expansion. Now that I reflect on it, it was not entirely bad IF, and only IF, I had the knack to know when to stop. But I did not. Like a drunken sailor, the more I made the more I borrowed to make even more and in time borrow more, and more…

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