Back in the late 1990’s, I had built a business to multi-millions in revenues and almost eighty employees. It started seven years earlier as just a desk beside the bed in my little Seattle apartment, and a loan from a friend for $1,500.
In the summer of 1998, the business was flourishing. The local newspaper had just done a front-page story on the company’s rise, and while I didn’t pay myself that much of a salary, on paper I was worth millions.
So I splurged and bought a new BMW 740.
Well, I financed it. I didn’t pay cash. So it wasn’t really mine, as I was soon to learn.
In late 1998 the business took a series of fatal hits. We lost our largest client in a lawsuit that eventually settled in our favor, but killed us in the short-term. We lost our second-largest client soon after for unrelated reasons. I was terrified, and I felt worthless and helpless. I downsized the company to just eight people to keep it afloat, and I went on unemployment just to make payroll.
Which brings me to the car. I had to sell it, so I took it down to the local BMW dealer and put it up for a consignment sale. They told me I could sell it for a certain amount, and when that happened, I could pay off the loan and pocket a few thousand dollars of much-needed cash.
A couple months later, the car hadn’t yet sold, and I missed my first payment.
I got a call from the lender. “I don’t have a payment right now, but I have a plan to pay it off.” I naively told them. I told them where my car was, and what I was selling it for, thinking that would encourage them to keep working with me.
Within an hour I got a call from the BMW dealer. “The lender came and repossessed your car.”
It’s like someone kicked me in the gut. I was too young and stupid to think that would happen, but it did. I called my wife, who had just had our sixth child, to break the news. “Honey, I can’t believe it. They took our car!”
It gets worse. Instead of selling the car at retail value and clearing me a few thousand dollars, they sold it at wholesale, and stuck me with a ten thousand dollar bill. Not only was I on unemployment. Not only was my world crashing around me. Not only was I not going to get that desperately-needed few thousand dollars. But I got a bill for ten thousand dollars instead.
Looking at that settlement statement from the lender, and trying to sort it out in my frustration and anger, a thought hit me. Some guy just got the deal of a lifetime because you weren’t wise with your money. Some guy with cash was able to pick up that brand new BMW for a fraction of its value, all because he was financially strong and you weren’t.
From that point forward, I resolved to be the guy on the good side of this situation instead of the bad side.
It took me years to recover, but I remember the day when I went into the car dealership bought a late model Mercedes, wholesale, all cash. I walked out of there knowing that the repo was the best thing that ever happened to me. It gave me the resolve to get financially strong.
