“You see when you are middle class you have to live with the fact that history will ignore you. You have to live with the fact that history will never champion your causes and that history will never feel sorry for you. It is the price to be paid for day to day comfort and silence. And because of this all happinesses are sterile: all sadnesses go unpitied”

D Coupland in Generation X

I had been using my previous blog template for about 5 years and today thought it might be time for a change…

Chances are I will play around with this a bit before settling on a format that I like so there may still be some more changes afoot.

But in case you thought you had arrived at the wrong blog by mistake, nope… its just a long overdue upgrade!

About 5 months ago we discovered that we had lost $250K, as a result of a failed property development. We don’t have a spare $250K sitting around to lose so it has been a challenging time.

More accurately we had the money stolen by the company director who illegally used the equity in our development to prop up his other failing projects. Ultimately he hoped to return the ‘borrowed’ money, but given he didn’t ask our permission to do so, and given those other projects fell over in the economic crash, it left a very ugly situation and many angry investors.

Just before we left for our trip we had heard that we were probably going to lose around $100K of the $250 K we had put in. It was bad news and caused us to re-consider whether we should continue to travel or whether we should just stay home and make up the lost ground. Given we had borrowed $200K of the $250K we were already back in debt and feeling a little edgy about things.

In the end we decided to go, but cancel the USA leg of the trip.

And we’re glad we did, as if we had known what was actually going to happen I think we would have felt it totally irresponsible to hit the road for six months knowing we were losing potential income and putting the cost of our trip on what had suddenly become a decent mortgage.

We have had both wins and losses with property, but this was a bit of a sledgehammer and we felt its effects over the trip. It has been both disturbing and challenging as we have had to address all the issues involved in this scenario.

There has been a heap of learning and I imagine there is a fair bit more still to come. For those who are interested here are some of the things we have been pondering and working thru over the last few months.

1. Perspective is everything

– on the day we heard we were pretty angry and it caused a fair bit of anxiety as we saw the ground shift underneath us. I had a pretty bad day and even felt a bit of a panic come on. Our mortgage is now bigger than ever and I was feeling the pressure of it.

We are generally not financially driven, but we were investing in property as a bit of super / retirement plan. I went to bed that night knowing I needed to find some peace and in the prayer I was able to put things back in perspective. However they didn’t stay there… At various times as we were relaxing I would feel a panic cum anger attack hitting and for a week or so I was feeling almost depressed.

What really helped in those times was remembering that no one has died – no one has a terminal illness – our marriage hasn’t fallen apart – there has been no major life catastrophe.

We simply lost a lot of $$$.

And to put things further in perspective we are still way better off than many Aussies let alone when we compare ourselves to the rest of the world.

Perspective means I almost feel embarrassed at times talking about this as there are people whose lives have been much more screwed up than ours.

While its a lot of money and it has an impact, its still just money. And I don’t say that glibly. There are many things in life that are much more devastating than this.

Learning to Live Simply Has Been a Blessing – over the trip we were careful with cash, but not stingy. In effect we learnt how to live on a shoestring and we realised that if we could do it while we were away we can also do it at home.

So our home budget has been shaped around our experiences while travelling. Our goal is to pay the mortgage off again as quickly as doing that allows us space to breathe in other areas of life.

Our goal is to live simply and generously as we don’t want that element of our lives to take a backward step because of this event.

Contentment – I think some of our friends felt we were happy contented people because we didn’t have a mortgage and therefore life was cruisy. The truth is we were contented people 10 years ago and that didn’t change much with the absence of a mortgage. (What did change was the freedom we had to choose how to allocate our time)

I guess now is the time to live that again. I think we have been able to find contentment outside of the things we own, but its been a while since we have had to actually grapple with that.

Greed had a grip – I was conscious of this happening in me. I am naturally prone to greed so at times giving has been a spiritual discipline for me to counter this.

After a very successful property venture we had made plans to give a fair bit our windfall away, but we decided to invest one last time before doing so in a high yield project… Being fairly pragmatic I felt it was better to create a ‘goose’ than simply give a golden egg.

Danelle wasn’t convinced, but didn’t say much. Her intuition is usually pretty damn good and on this one she was right and it would have been good for her to be a bit more forceful. I think even she was asking ‘why not?’ as by all indicators the investment was a no brainer.

Lesson learnt.

Control is a Mirage – When it all hit the fan I sat down and worked out a plan for getting rid of the mortgage again asap. I did some numbers and looked at our potential income and expenses and figured that we should be able to clear the debt again in 5 years if I work hard.

Of course that all assumes that I don’t break an arm, get sick or that my business doesn’t dry up. Permanent sprinkler bans over here would see the end of my livelihood and we’d have to re-think those plans drastically.

This event itself has been a reminder that we have much less control over our lives than we sometimes like to think. In fact life can go belly up at any moment so in many ways we hang by a thread even we don’t see it.

———-

So I write this a long time after the event and I don’t write it looking for sympathy or anything like that, but simply because it has been a valuable lesson. Like most valuable / hard lessons you would never wish to repeat them, but I can say it has really forced us to chew over again what really matters and how we will shape our lives.

We both feel regret and anger that the money was wasted when it could have been used for so much good, but I have a feeling that an event like this will be formative in our own lives as we consider how we approach the question of finances and investing in the future.

Right now I feel fairly philosophical about it and I genuinely mean it when I say that compared to the crap other people have to deal with, losing money is a walk in the park. Its not a park I hope to walk in again, but for now we’re learning some new things as we make the most of an ugly situation.

It’s been a bit of a crappy week in business with one job turning to custard and leaving both me and my customer in a difficult spot.

I took on a retic and turf / landscaping job for a new house, something I really enjoy doing because it’s good hard work, pays well and the end result is always great to look at. However this week a series of miscommunications meant that my customer didn’t get what he wanted and I didn’t get paid as I expected.

It’s always difficult when things don’t turn out as you imagine and clearly the job that I completed was not what he had hoped for. We had misunderstood each other on the location of a retaining wall, on the acceptable slope of the lawn and on the product that was to be used to cover his garden beds, quite a few issues and considering we spoke on the phone numerous times and also sent plans back and forth it’s a bit bemusing how we finished up in the mess we did.

The garden issue was simple in that he asked me to supply woodchip when he actually meant mulch. His mistake and he accepted that.

The soil levels and retaining walls were more complicated. We were clearly talking about two different walls over the phone and my wall – which made perfect sense to me – was not the same wall he was expecting. On the soil levels I heard some mixed messages and in the end I didn’t remove as much as he wanted, leaving the turf on a slope, not what I would normally do, but what I thought he wanted as a cost saving measure…

So over the last few days we have been negotiating a fair settlement for what seems to have been a simple case of bad communication.

At the end of the day it came down to naming a dollar value for the work that he felt he needed to redo and that is where it got tricky. While we both agreed that we miscommunicated the apportionment of responsibility was much harder to navigate. I offered what I felt was a pretty fair cash amount as a gesture to compensate, but he felt it was half of what was fair.

Given he hadn’t paid the bill the ‘power’ in the equation was clearly in his court. At the end of the day I simply had to accede to his request or take the matter to higher authorities to try and get it resolved.

I don’t have the time or $$$ to do that. It would simply be an exercise in futility and a great waste of both time and $$$. So while I didn’t agree that the amount was fair, I accepted his call and decided to move on having learnt a rather expensive lesson.

The lesson is simply to be very clear on what is being done so that both of us have a shared picture of what the end result will look like.

I must say that while the ‘ balance of power’ lay with the customer in that he hadn’t paid me and owed a substantial amount, his attitude and approach to the situation made me much more amenable to accepting a loss than if he had been a jerk. If he were angry and accusatory rather than conciliatory I imagine I wouldn’t have made a cent and I would be sitting here fuming rather than feeling reflective.

In it all I am probably more annoyed that I appear to have done a crappy job than that I have lost some $$$. There is an element of personal integrity that gets called into question when someone feels you have let them down and I find that sticks in my craw.

So… another day of learning ends!