Bankruptcy IS a Business Decision - A True Story
Businesses file for bankruptcy ALL the time...when times are good and when times are not so good. When consumers file, I think we look at it as a bad thing because we have personal attachments to our stuff i.e. houses, cars, savings, etc. And I can understand this because I was one of those people.
However, I'd like to share a story. A few years ago, one of my colleagues invited me to dinner with one of her friends. When we got there, her friend was a small, unassuming guy with a slight Texas accent that pulled up to the restaurant in a mini-van. However, when he paid for dinner, he paid with an AMEX Black Card. I had heard about the Amex Black Cards (also called Centurion cards), but had never personally seen one.
In order to qualify for an Amex Black Card, you have to have:
1. High credit rating
* If your life circumstances or sense of responsibility have caused blemishes on your recent credit history, this card may be out of your reach. At least until you fix your credit rating, anyway.
2. Have a Platinum Card
* You need to already hold an American Express Platinum, if you want to apply for a Centurion.
3. Extravagant spending habits
* Your Platinum account will have to demonstrate a $250,000 annual spending rate. Again, that's a quarter of a million dollars, each year, charged to your account.
4. Significant Assets
* These might include, oh, say, a house, or savings that exceed your current credit card spending limit. A company or an island might help as well.
And, to KEEP your Black Card, you must:
1. Pay a one-time fee of $5,000.
2. Pay an annual fee of $2,500.
3. Pay off the balance, in full, every month whether you charge $5 for a Starbucks coffee or $200k for
a first class trip around the world.
Why Am I Posting this??
This meeting was in 2008. This guy filed bankruptcy in 2005. Not only did he TELL us this, the story recently broke in the media: http://www.tmz.com/2010/10/16/real-h...ng-bankruptcy/
Yep, that's right. If you watch the show, you'll see in the latest episode that they just spent 60k (no, not 6k), SIXTY THOUSAND DOLLARS, on a birthday party for their 4 year old daughter.
Now, how he built his net worth, or credit for that matter, back up after his BK is a moot point. The fact is, he looked at filing as a Business Decision. This guy is a Venture Capitalist, by the way, so by working in the finance arena, he's probably learned some important lessons about BKing and rebuilding..
Do you think that this BUSINESSMAN thought twice about filing bankruptcy in 2005?? Nope, this is a smart man. He knew that if he lost everything he could rebuild again...bigger, better and stronger than before.
So, if it makes sense for you to file, go through the headache, but come back bigger, better and stronger than you were before. That doesn't mean go grab an AMEX Black Card, LOL, but if you choose to rebuild your credit, treat yourself to a financial literacy class, or constantly educate yourself on sensible credit building. If you choose to live on cash only - more power to you. Just find ways to create more cash in your life.
I hope that we can all learn lessons from our BK filings, if not from this guy, then from each others, as well as our own, personal stories.
However, I'd like to share a story. A few years ago, one of my colleagues invited me to dinner with one of her friends. When we got there, her friend was a small, unassuming guy with a slight Texas accent that pulled up to the restaurant in a mini-van. However, when he paid for dinner, he paid with an AMEX Black Card. I had heard about the Amex Black Cards (also called Centurion cards), but had never personally seen one.
In order to qualify for an Amex Black Card, you have to have:
1. High credit rating
* If your life circumstances or sense of responsibility have caused blemishes on your recent credit history, this card may be out of your reach. At least until you fix your credit rating, anyway.
2. Have a Platinum Card
* You need to already hold an American Express Platinum, if you want to apply for a Centurion.
3. Extravagant spending habits
* Your Platinum account will have to demonstrate a $250,000 annual spending rate. Again, that's a quarter of a million dollars, each year, charged to your account.
4. Significant Assets
* These might include, oh, say, a house, or savings that exceed your current credit card spending limit. A company or an island might help as well.
And, to KEEP your Black Card, you must:
1. Pay a one-time fee of $5,000.
2. Pay an annual fee of $2,500.
3. Pay off the balance, in full, every month whether you charge $5 for a Starbucks coffee or $200k for
a first class trip around the world.
Why Am I Posting this??
This meeting was in 2008. This guy filed bankruptcy in 2005. Not only did he TELL us this, the story recently broke in the media: http://www.tmz.com/2010/10/16/real-h...ng-bankruptcy/
Yep, that's right. If you watch the show, you'll see in the latest episode that they just spent 60k (no, not 6k), SIXTY THOUSAND DOLLARS, on a birthday party for their 4 year old daughter.
Now, how he built his net worth, or credit for that matter, back up after his BK is a moot point. The fact is, he looked at filing as a Business Decision. This guy is a Venture Capitalist, by the way, so by working in the finance arena, he's probably learned some important lessons about BKing and rebuilding..
Do you think that this BUSINESSMAN thought twice about filing bankruptcy in 2005?? Nope, this is a smart man. He knew that if he lost everything he could rebuild again...bigger, better and stronger than before.
So, if it makes sense for you to file, go through the headache, but come back bigger, better and stronger than you were before. That doesn't mean go grab an AMEX Black Card, LOL, but if you choose to rebuild your credit, treat yourself to a financial literacy class, or constantly educate yourself on sensible credit building. If you choose to live on cash only - more power to you. Just find ways to create more cash in your life.
I hope that we can all learn lessons from our BK filings, if not from this guy, then from each others, as well as our own, personal stories.
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