Posted May 9, 2020 in Podcast
The 4 Lessons That Cost Me $379,504 To Learn
Have you ever made a mistake — so huge that you felt like you could never recover?
I once made a mistake that cost almost $400,000. It was debilitating. My wife and I were financially destitute. But this wasn’t the end of the story.
We’re going to do something a little bit different in this episode. One of my most popular episodes is when I pulled back the curtain a little bit on our debt-free journey. Over the course of about 38 months, we paid off about $380,000. I’ve gotten so much positive feedback and so many requests for more advice, so I would like to be of service!
Right now with the COVID-19 pandemic, we are facing an impending recession. A recession is defined as two consecutive quarters or six months of declining GDP (gross domestic product — the sum of all things our country makes and sells). A recession is also a lagging indicator, meaning that we don’t really know we’re in a recession until after the fact.
As we face this impending recession, I’m stepping into it from a place of being completely debt free! But what I’m most proud of is that I’m stepping into this time as the kind of dad and husband that will confidently lead my family through a tough situation. 12 years ago, when we were facing the 2008 recession, I went through it from the exact opposite place. I was operating from a place of being financially uneducated. My ego kept getting in the way, and I really just wanted to get lucky and hit some sort of financial home run.
This attitude caught up with me, and it cost the big bucks. Today, I want to share with you the four lessons that cost me $379,504 to learn, and how these lessons have transformed my relationship with money for the better. My hope is that these lessons will equip you with the tools you need to prepare for the upcoming recession and give you a better mindset surrounding money! Let’s get into it!
The Problem: I Cashed Out My Retirement
Before we go into the lessons I learned, I want to give some more background into what REALLY messed me up during this time.
I cashed out all of my retirement. I paid all the penalties and taxes. And then I spent it all buying gold.
We all know that cashing out your retirement and paying all those fees is the number one “no-no” in personal finances, but I did it anyway. I was listening to all the doom-sayers who were creating propaganda in order to get you to buy gold.
And what’s worse — I bought gold at the peak price, something like $2,000 per ounce, maybe even a little bit more. So you can imagine what happened there. The price of gold tanked, and so did my financial dreams. This was the straw that broke the camel’s back.
The turning point of all this was a couple of years later. After being sick and tired of struggling financially, I sat there wondering, “What am I doing wrong?” I logged on to the social security website to see how much social security my wife and I would receive once we retired, and you guys — I was financially destitute.
When you log onto the social security website, you can review your lifetime earnings. I saw that my wife and I had made well over two million dollars combined, but I had nothing to show for it. As a matter of fact, not only did I have nothing to show for it, but I had almost $400,000 in debt.
This was the lowest point of my life as a husband and aspiring father. This was not how I thought I would lead my family. I never felt less valuable than in this moment, but I had reached a turning point. I saw that we were capable of making two million. Even though we had nothing to show for it, I knew that I could learn new skills and help save our financial future.
(And if you’re thinking, “Well, I haven’t made that much money,” don’t count yourself out of this story yet. Remember: I was starting well below zero. The average household salary in America is almost $70,000 a year, so over the course of 15 years, you will have earned a million dollars. So stay with me!)
After realizing that we were financially destitute, the first thing I did was face the music. I finally got honest. I sat down with my wife Lois, and we had that humbling, tough conversation that I had honestly been avoiding for a while. We decided to enroll and invest in the Dave Ramsey financial literacy program together, and I felt the weight of the world lift off my shoulders a little bit.
Since then, I’ve spent the last several years learning these four lessons that I want to share with you. Make sure to grab a piece of paper and a pen, because you’re going to want to write these down!
Lesson #1: I Do Not Control the Circumstances But I Do Control the Outcome
When a financial recession hits, there’s really nothing you can do about it. You can’t fix the recession. But you can determine how that recession will affect your finances moving forward — the important thing is, though, you can’t do it alone.
For so long, I had been obsessed with controlling everything about our family finances, and I didn’t want anyone’s help. My pride was saying, “You know what? I’m going to run this family. I’m going to take charge of the money.”
Clearly, I did not do a good job with that.
Lesson #2: Managing Finances Is a Team Effort
The piece I was missing was that managing finances is a team effort. It’s not just “my job.” My ego was trying to take control, but it ran me into the ground. Everyone needs to take financial responsibility in the household.
Now, you may be thinking, “What if one person is just more inclined to do the budgeting, the spreadsheets, and everything like that?” You accounting nerds out there know what I’m talking about.
It’s okay for one person to run those day to day finances, but all parties must always be caught up and fully aware of the current financial picture in comparison to joint goals. Family finances affect everyone — and so they need to be a family affair.
Lesson #3: Rethink Everything
When you hit rock bottom, you can’t continue doing the same things you’ve always done — it’s because of those habits that you’re there in the first place. You have to rethink those habits as well as rethink the future.
A lot of you know our story — I put a pause on my professional career and stayed home with our son for a season because it made more sense for Lois to explode in her career. That was tough for both of us. As a man with an ego, my pride was hurt. But it’s what we needed to do.
Explore every possible move. What moves do you need to make that you haven’t looked at yet? Maybe your ego is resisting something. Remember — sometimes you have to take some steps backward in order to get a running start.
Lesson #4: Reset Your Sights on a Big, Audacious Goal
Guys, this is the most important one, but it can’t be done unless you do the other three first.
If we don’t have an extraordinary goal to live an extraordinary life, then what is this all for? You have to remember — we often get what we aim for. If you stop at lesson three, you risk making a reduced lifestyle your new normal. You’ll just be getting by instead of moving forward.
That’s the path I was on, so I’ve made it my mission to save as many people I can from the same mindset. If I leave you guys with anything, please let it be this: The most important thing I learned is that I don’t have to sacrifice my personal balance sheet for my professional balance sheet.
I had been focusing on the wrong things, things that didn’t matter. It doesn’t matter if you’re a success at work but you’re failing at home.
Make goals that are more valuable than a paycheck. Make a goal to be a better husband, a better father, a better leader. Don’t sacrifice your personal life for professional gain.
Interested in Learning More?
Guys, I hope these four lessons have equipped you with the knowledge you need to start living a more balanced, fulfilling life. If you’re in debt like I was, know that there are so many financial plans out there that can help you get back on track. And while these plans are helpful, most of them miss a crucial part of the process: accountability.
So, let me throw this out there: I’m creating a nonjudgmental container for a select, small group of people who are looking to educate themselves on money management and improve their money mindset. I’ve integrated accountability as a crucial part of this program to help with paying off debt and cutting expenses.
If this sounds like something you would be interested in, go ahead and find me on Instagram, Facebook, or LinkedIn and let me know if you’d like to learn more about that program! These lessons cost me almost $400,000, and instead of them costing you that much as well, I want to give you a jumpstart and some money momentum, and it wouldn’t cost you more than a hostel.
If you found value from this episode, it would mean so much to me if you took a few seconds and wrote a five star review on Apple Podcasts and shared it with some of your friends. Also, please tag me @kyle_depiesse on Instagram with a screenshot and your takeaways from this episode! I’d be so grateful!
Cheers to your success! I’m rooting for you.