I recently found this incredible story of how a regular guy got $556,000 (archived only) in debt. I was intrigued that this was so easy for him to do. The original blog is now missing, and the story is now unavailable at JoelMaxwell.com

It intrigues me that our societies now treat debt so lightly and make it so easy to get for personal use, for business use, for investment use, and FOR SPECULATION. I do sympathize with a number of the problems he had as they are very easy for eager business owners to fall prey to: overexuberance in the first months, unexpected expense, unforeseen cash flow issues, high leverage of debt, but mostly lack of a Plan B, if things didn’t work out. In fact, having a Plan C and a Plan D to fall back on is always a good idea so that if you can’t get your Plan B, then there are still other options that don’t include borrowing even more money.

Our business nearly got put out by the unexpected advent of SARS, and we didn’t have much time to prepare for it, as we were forced to close for 2 weeks. We were fortunate: no debt, malleable costs, and a willingness to sacrifice. But it could have been much worse than it was. Guess what, we haven’t learned yet either.We’re only now planning to set up emergency funds, and create a wall of financial security for the business… It’s going to take a lot of time and a lot of learning for me, I’m not particularly savvy at this kind of things, so the learning comes at some cost to myself. But it must be done.

I do admire Joel’s resilience to bounce back in a desperate situation. And so I am supporting him with positive thought waves and wishing him well.

Kenneth