Jul 30

What debt has taught me about myself and my choices

Need to feel 'comfortable'
"This shirt looks pretty good, but it costs $150. Should I get it? Yeah, maybe I should. It's a small part of my pay cheque, and you can never have enough shirts, right?"

And that's how I got that $150 shirt and ten others like it.

"Mmmmm... that Salmon belly sashimi plate costs $16. And I like it. There's other stuff on the menu, but.. Salmon belly sashimi, man, I could have some of that."

And that's how I ended up having $20 lunches most days.

"It costs $10 to get to the office by cab, and it takes 5 min. It will take me 25 min to get there by train. I need to take a cab. It will save me more time to make important work decisions."

And that's how I spent $20 a day taking a cab to and from work.

At that time, I was 28 and worked as a partner in a relatively successful game company. I drew a monthly salary of $5,000, but I saw very little of it by the end of each month.

"It's okay, we'll sell the company for lots of money later on. Right now, my time is important and I need to pamper myself, so I can make good decisions.

Nobody makes good decisions when they're uncomfortable." This was my mantra, and it was how I justified most of my purchases.
Out of control
Have you ever had that feeling that although you were comfortable, you were not at peace? Have you ever felt like you were chasing something? A better life, perhaps? But what does a better life mean, exactly? Upon reflection, I realised that at that time, I was grasping at anything that would give me a temporary feeling of a “better life”.

Then, 2008 came. The company was close to sealing a $1m investment deal and I thought I would finally be able to have a big pay cheque after all my hard work and be truly able to live THE lifestyle.

However, by July 2008, the US financial markets had bottomed out and venture capital firms had started to issue warnings about the economic uncertainty and the impact on startups. By end-2008, our investors had pulled out and my business partner and I were left with $100k left in the company account, 5 staff to support and potentially $150k in upcoming project costs for a game we were making to be finished and shipped.

The investors pulling the plug was a big blow for us. We'd already committed to a large project on the Nintendo Wii in anticipation of the investment being closed and we were already halfway through the development cycle. We were caught off guard and had to decide what to do with the remaining capital.

Both my partner and I decided not to draw any salary. I would fund my expenses and cover some of the costs to further develop our PC online game, which was doing relatively well, and he would fund the Nintendo project as he had more finances in the bank.

Having a $0 salary, you would think that I would have changed some of my habits.

Truth be told, not much had changed. There was $0 coming in, but the outflow was not that much different.

This began to snowball. By the end of 2009, I found myself $20,000 in debt. I remember the day reality hit me. I had maxed out both my cards with ~$10k limits and I realised I had no way of repaying them. I could not even afford to pay the minimum sum as I had $0 coming in.
Taking more control
There were things I couldn’t control (like the economic cycle) and there were things that I could (like my own spending, and the choices we made within the company). There were things that I needed and things that I wanted. Looking back, I realised I could not tell the difference between the two. I also did not take the time to discern between my choices.

Working through my money narratives over the years, and questioning the deeper underlying meaning of what drives my money decisions were steps I took as part of the larger intervention to rectifying my behaviour.

Some years on, there is an upside to the story. Among other decisions, I have pared down my wardrobe to exactly 5 plain black round-neck shirts that cost me $25 each. It is pretty much the only thing I wear out every day, and I could not be happier.

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