How would you feel to learn your financial planner came close to bankruptcy five times in his life? Maybe I should have considered that question before I told the world about my business mistakes in an interview with Morey Stettner that was published July 18, 2022, in MarketWatch.com.

I’ve often told clients that I’ve made a number of business mistakes, which means I can help them avoid making the same ones. Still, as open as I am with clients and others about my past mistakes, I realized I had omitted important parts of the story.

Some folks might conclude from the article that I actually went bankrupt. I did not. A Certified Financial Planner who did so could lose the right to use the CFP designation. Readers also might assume that I could still be struggling financially, something any client of a financial planner would be wise to be concerned about.

Here’s what I didn’t say in the interview. First, these bad business and investment decisions spanned 40 years of owning multiple businesses and properties. I didn’t explain that making mistakes is normal for individuals who build significant wealth. Second, I didn’t say that despite my five near bankruptcies, I have been successful enough in my business ventures and investments that I could have retired at age 57. I continue to work because I really enjoy what I do.

The 2008 book The Middle-Class Millionaire, by Russ Prince and Lewis Schiff, noted that the average millionaire made 3.1 major career or business mishaps, versus 1.6 mistakes for non-millionaires. The difference is that those who succeeded in building wealth tried again, and again, and again. They didn’t give up. For every really bad financial decision that I’ve made, I probably have made five good ones. With every bad one, I called on all my resourcefulness to dig out of the situation, minimize losses, pay off my debts, and learn from my mistakes.

Prince and Schiff also noted it was common for millionaires to own some or all of the companies they worked for. I have a hunch the resiliency required for business and investing success has something to do with taking business risk and having “skin in the game.”

My business mistakes gave me chances to learn to do things differently. They gave me opportunities to feel how paralyzing a mistake can be. How difficult it can be to keep going. I remember how small and inadequate I felt compared with “successful” businesspeople in my community and even at times my own employees.

One particularly tough time for my rental property business was in the mid 1980’s when B-52 bombers were relocated from nearby Ellsworth Air Force Base, sharply reducing its population until B-1 bombers and their crews came in a couple of years later. Vacancy rates soared to 25%. When my rental houses were full, I still needed to take $1,500 a month out of my salary to pay my rental mortgages and expenses. With vacancies, of course, the monthly negative cash flow was even greater. I learned not to look at my balance sheet or income statement, because doing so paralyzed me with fear that I wouldn’t be able to continue to earn enough to support my rentals and my family.

I didn’t look at my income statement for 20 years—around the time I started examining my own relationship with money. I still remember the trepidation I felt as I gathered all the numbers. What I saw shocked me. That negative $1,500 a month had changed to a  positive $5,000 monthly cash flow.

Business mistakes are part of the process. They don’t have to be the end of the story.





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