Get Outta Debt! by Robert Spiegel

So I have to admit that this is a very ambitious and intimidating blog for me.

Firstly, I help people build wealth using real estate for a living.  I make sure that my clients make sound financial decisions that enhance their financial lives.  I am known for disagreeing with people when I feel they are making a mistake, and I really feel that my clients trust me greatly.  I am so proud of this reputation, and I can admit that I have worked hard for it.

I am a mortgage banker in Houston, Texas and I have attained the designation of Certified Mortgage Planning Specialist. Fundamentally, I enjoy helping people. I love Real Estate and I enjoy making the process of buying or owning a home more fun, easier, and safer.

So it is time for me to take some of my own medicine. For the last 5 years I have counseled clients on how to get out of debt, specifically consumer debts such as credit cards.  Generally I view consumer debts such as these as evil.  They are generally lousy debts that most people have acquired because the money was “available”.   I am finding myself in a lot of debt, though I did not acquire debt from consumption, as did most.  I acquired debt from starting a business and investing in that business.

In the first years of my business, obviously, there was not a lot of income compared to the expenses so I used credit cards and lines of credit to live.  As the business grew, I began to invest more and grow the business more.  Suddenly I woke up and realized the debt was starting to overwhelm me.  The real wake up call was in 2008 when business started to slow down and then our area was hit by Hurricane Ike.  I realized that I had massive amounts of overhead and no income to pay for my staff, office lease, insurance, etc.

I found myself in the position of being the sole producer again in my business after hiring a number of loan officers that just were not good enough to represent what I was trying to create.   I began to realize how much the overhead was sucking the life out of me.  I was trying to keep my clients happy and deal with changes that were occuring by the minute as the mortgage markets were imploding.

I never made it to the place where I missed payments or couldn’t pay, but I was losing sleep, getting fat, and drinking a lot because I was so panicked over how I was ever going to be out of debt.  After using the “rob peter to pay paul”  method of paying bills for a number of months, I decided that I’d had enough.

So there I was. I had to create a get out of debt plan for myself.  It was not going to be easy and it would involve sacrifices.

The first part of the plan was to get rid of my office space.  I created an expense sharing arrangement with a competitor whereby we could share an office, and the staff that we required.  This was actually not that difficult.  The next decision was…I got rid of my expensive car payment and settled on a sturdy (but not at all fuel efficient)  used Ford Expedition that I was able to pay cash for.  Though it is not the fine European automobiles I was used to, it felt great to be free from a car payment and the obvious upkeep that a luxury car requires. I then leased my vacation home out for a year. I trimmed expenses and went to cash only lifestyle for my personal expenses. If there wasn’t money in my checking account, I didn’t need to buy it.

Suddenly the hemorrhaging of money slowed down.  It was a huge stress relief, but I was not anywhere near being out of the woods. These seemed like huge steps at the time, but in reflecting back, they were babysteps for what the future held.