How To Recover From Financial (and other) Disasters

Mark / April 11, 2020

Setting Out

At the end of 2005, I left my moderately successful career in tech in Silicon Valley and acquired a 17 person custom cabinetry business. This involved taking out a  personally guaranteed $1.5 million loan backed by the US Small Business Administration. The loan was made possible by the equity in my house in San Francisco and the cash flow of the business. Cabinetry businesses have very little in the way of hard assets. By 2008,  my management, marketing and sales skills along with my team had grew the business to 45+ employees.  I was captain of my ship and looked like the smartest guy in the room.

The Storm

Unfortunately, like so many before me my ship was not as prepared for a storm as it might have been.  My particular ship was launched from shore not with a champagne being broken across the hull but with me lifting the boat out of dock on a massive wave of debt. Beginning in 2007, we began to feel the first effects of what would become the Great Recession.  My challenge was I was fully invested and vested, locked in with no liquidity options. My attitude was that no challenge could not be overcome and the surely this recession thing was going to be brief. We just had to confront and work through our challenges and maybe it would take a while and be painful but we would turn this thing around. Besides the alternative was to lose my comfortable valuable house in San Francisco, lose my fancy Lexus sports car, lose the pretty blonde girlfriend and go from looking like the smartest guy in the room to a deluded idiot.

As is common with most people who are feeling desperate and stressed, I started to make mistakes. I borrowed money I should not have from family and friends. I did a very fancy maneuver that enabled me to put my protected retirement account savings into the business as a last ditch effort to save it. “Leave Everything on the Road” I believe was a popular saying at the time meaning never give up; no retreat, no surrender. My efforts however well-intentioned – were no match for the macroeconomic forces of the Great Recession and accompanying housing crisis.

There were no other options then to declare both corporate and personal bankruptcy in 2009.

Lost at Sea

At this point, I was in  an unknown stormy ocean on a moonless night without a compass and no guiding star. I was ashamed, depressed and embarrassed and suffering from low self-esteem.  Having lost almost all my financial resources and gone from being a CEO to unemployed at a time when jobs were far and few between, I found myself in the darkest night I had known in my life. Perhaps the worst part was explaining to my then 11-year old daughter why we were losing the house that we both enjoyed so much.

The rest of this post is about recovery or finding my way home (or back to myself) – after all – isn’t that what we all want to do? The reason I am sharing this experience and what happens next is to hopefully help others in similar or simply difficult situations do the same. I feel obligated to warn you, my course was not easy, short or straight – however sometimes the scenic route has more to offer than the super highway. So I hope you will stay with me and keep reading.

Sailing Into The Storm

The good and bad news was that my life situation was so awful that I no choice other than to acknowledge what it was.  The best and first decision I made was that I was 100% responsible for the scenario I was in. It was not the economy,  Wall Street or my team. I had made the decisions and taken the risks that ended up with me being where I was. If they had worked out, I would have taken the credit and rewards and since they had an incredibly negative outcome it was for me to accept the blame and take the pain.

It is not possible for me to emphasize how important this first step is of accepting 100% responsibility for everything in your life is  – in recovering from significant setbacks. I am writing this at a time when the COVID-19 pandemic is ravaging the world and destroying lives, families and communities in a horrifying and tragic manner. An obvious question to ask if COVID-19 has affected you, your dear ones, your economy is “How am I responsible for this?”. The answer is that you are not responsible for the COVID-19 pandemic and its effects. You are 100% responsible for all the decisions in your life to this point and your reaction to COVID-19 and the scenario it has created on a local, national and global scale. Think about the pain and suffering that is present today in a more manageable, common way.

All of us will experience sorrow and loss in our lives. Who has not had their heart broken, experienced rejection or lost someone or something they valued and were attached to? It is not possible to live a life where nothing happens outside of how we want things to be. Our task if we choose to accept it is to learn how to live a wise response rather than react from our conditioned historical patterns which are typically not as skillful. This is not possible if you are blaming others or the world for your predicament.

This turning towards our pain and suffering is why I called this sailing into the storm. No doubt, this can range from nerve wracking to frightening to outright terrifying. However, what the vast majority of people find is that it is the anticipation of the pain and suffering that is greater than the pain and suffering itself. In my case, when the business was failing and I knew it, the months before declaring bankruptcy were the worst in my life. Once I made the decision to and enacted the plan and the process to declare  bankruptcy it was not nearly as awful as what I had thought it would be. In speaking with my bankruptcy lawyers they said this procession of feelings and thoughts is the way it goes for almost everyone. 

When thinking about romantic relationships that have gone from great to breaking up – the process is similar – if not as severe (at least for me) from being anxious about the act of breaking up to the uncertainty of the future. However, when the break-up happened there was always a great feeling of relief.  I was fortunate that my Dad, lived until he was 84, the last years of his life were punctuated by Parkinson’s disease and the slow loss of capabilities that occur with this disease. As with other sorrow causing events that you can see are inevitable before they happen, I had similar feelings of anxiety, fear and sadness about the prospect of Dad dying. When an incredibly aggressive and rare cancer took his life in the course of couple weeks and saved him, his family and friends from the worst that Parkinson’s has to offer – again I was relieved at his passing.  Let me emphasize, I did not want my Dad to die. His death was at the time and in the place and in the way it happened a mercy for him and the community that loved him.

In all of these cases and others, the pain that we feel is part of what makes us human. There is no weakness in feelings. It is the strongest of us that can turn towards these feelings and understand what feelings are arising; why they are arising; and what we need to do to process them in a healthy way. For some people, this may mean a hard physical workout, for others it may mean talking them out, for others it may mean finding a quiet place to process, there is no single way that works for everyone.

Reclaiming the Captain’s Chair

One of the things that happens when the storms of life become overwhelming is, we lose our center. We are getting tossed about by the winds of life and no longer balanced and grounded. Have you ever tried to do anything athletic or physical when you are off balance? It is rare that you are able to complete the move, make the shot or land the blow with any consistency when you are off balance. Do you think it should be any different when you are confronted with major life decisions?

So in order to regain command of your life and deal with whatever challenge you face you most likely need to reset your goals and perspective. This is extremely difficult because our goals and perspectives are part of how we define ourselves to ourselves and others. In other words, for a couple years I was a CEO / Entrepreneur of a rapidly growing custom cabinetry company and had ambitions of how I was going to leverage that to do other things in my “Grand Plan”.  For others, it may be changing from being a Husband or Wife to a divorcee, changing from being fully able-bodied to living to living with a prosthetic, or from being a proud parent to being a grieving parent. All of these catastrophes and more occur regularly on the spaceship Earth to it’s 7 billion+ human inhabitants.

In my case, the first set of decisions I made when the bankruptcy became inevitable was the following – 1) I would do nothing illegal 2) I would everything I could to ensure my customer’s in-process orders (for which we had taken deposits were fulfilled) and 3) I would do everything I could to ensure my employees lost as little pay as possible.  In other words, I wanted to exit this situation as gracefully as I could with my head held high. So I could look back at the events and only have remorse about the investment of money and time not working out – and not have remorse about my personal behavior or how I treated others.

If you are facing a difficult situation right now, a good question to ask is what were you trying to accomplish and given that the original objective is not possible, what is your new objective given your new reality? As you reset your perspective and your goals you reclaim the “Captain’s Chair” of your life.

First Light

In any difficult situation, the first step is to objectively assess where you are and what your priorities are. This requires a certain level of detachment that is quite difficult. One way of getting there is to imagine yourself sitting and talking to a coach, a consultant, a wise person,  or a deity and have a conversation with them about whatever it is that is up for you. Or if there is a human in your life who can play this role – even better.  . However, this is tricky because you have to be willing to be very open and vulnerable and they have to have both the willingness to empathize with your tremendous amount of pain along with the wisdom and skill to ask questions and advise you absent most of their own filters and judgements. This is why, if you have the resources, in a difficult situation you might hire a professional to help. I did not.

In my case once the bankruptcy was completed, I needed to find a source of income that was greater than my expenses as fast as humanly possible. Everything else at that point in time followed from that. So I sat down and looked at my resume which I had not really paid much attention to for about six years. What I was looking for was an obvious storyline that I could pitch in writing and interviews for jobs that were being hired for in 2009 (again, remember Great Recession). For me, when I looked at the resume what came through was that for much of my career in different roles – the most consistent role and results I delivered were in tech sales. My criteria for a job became the following:  ethical sales job in the San Francisco Bay Area with high income potential – preferably in technology.

Based on the difficulty you are facing, your goals will of course and should be completely different.  My recommendation is that your primary goals are simple and do not contain more than three points and can be summarized in a sentence or two. The reason for this is that when you are highly stressed it is hard to concentrate and hard to remember things. You want the goals to be memorable, simple so you can pull them up at any time. It is important to be able to remember your goals so that you can spend the time you have available whether a little or a lot  focused on activities that will move you along the path to achieving them.

However, it is not so easy to move from a vision of the future even when you can see the way in the first light of day to manifesting it. In the wake of a storm, there are still many dangers and obstacles to be dealt with.

Owning Your Experience

There are two ways to move through the world. You can either own your experience or you can be owned by your experience. When we are ashamed and embarrassed or being negatively judged by others or think we will be – the natural tendency is to want to hide whatever gives rise to these feelings and judgement. This is a symptom of not taking 100% responsibility for your actions.

What I found when I had heartfelt conversations with friends is that it was valuable for me to talk about what happened.  In fact, the more I talked about what happened openly without making any excuses simply telling the story in detail of what happened and how I reacted and how I felt and where I was now – the better I felt.  The difficult times for me were when I would wake up in the middle of the night. That is where my personal demons live (and still do to this day) – that is where I fought incredible battles and sometimes I won, at that time, more often I lost as I was suffering from what would be called situational depression. What was interesting is this depression was not present when I was in the presence of friends.

The good news when it comes to dealing with emotional and mental trauma, we live in an era of open source knowledge. There are so many  articles, blogs, books podcasts, and posts that if you are so inclined you can find positive material that appeals to you to assist in battling your personal demons. The more of this material I consumed – the more demons I vanquished. It got to a point where I would look for opportunities to tell a brief version of my story. The reason was each time I told the story the negative aspects of it had less and less power over me. Again, whenever I told the story I made no excuses, and if others started to make excuses for me, I would wait for them to finish and then say something like – yes, however it was my decisions and actions  and mine alone that put me in harm’s way.

When I tried to hide the fact of my situation, I found it both un-empowering and exhausting. I remember in particular as I was doing some consulting for a start-up going to very high end technology conference where I was interacting with a fair number of executives from large tech companies.  Most likely most of them were quite wealthy i.e. multi-millionaires and I knew they would only want to do business with people who they perceived as members of the club. After spending a couple days presenting myself as a “success” which at the time felt completely inauthentic and false – I was completely mentally and physically exhausted – and not in a good way like after a super hard workout. In this case, I was being owned by my experience.

If you are facing a difficult scenario – what would owning your experience (i.e. controlling your response to it) look like vs. being owned by the experience (i.e. letting it be your identity)?

Rejoining the Fleet

So far the majority of what I have been speaking to is your relationship to yourself and your relationship to a difficult experience.  Most of us our social creatures and all of the many wisdom traditions I have studied all place being part of a community at the center of being a healthy and wise human being. When we experience depression, high levels of negative stress or trauma we tend to collapse in upon ourselves. When we do this, we begin to isolate ourselves from our community of family, friends, acquaintances and colleagues.

Even a solo sailor is supported by a community.  This stems from a feeling of not feeling like we belong anymore. The voices of negative self-talk that tell us we are not enough, that we are not worthy, that we should be embarrassed and ashamed make it difficult to be engaged with other people.  It can also be easy to either be envious of other people who are not suffering as you are and/or to be overly sensitive to something that someone says however well-intentioned it might be.

Particularly, in today’s world where you can lose yourself in an infinite stream of  online video games, streaming movies and shows, and so much more – we can fool ourselves into thinking we are “healing” or “resting” or “learning” or “studying”  when we are simply engaging in avoidance through distraction. I did each and every one of these things. And yes, we all need a break from intense emotions and yet we also know when we binge watch a series for ten hours that we have gone to far, we know when we have spent hours playing video games that we are not doing anything beyond passing time etc. How much content consumption is to much? I don’t know but I know it when I do it – and so do you.

If you have accepted 100% responsibility for your scenario, if you have adjusted your goals and perspective to fit the new scenario, and decided to own your experience, then the next step is to re-connect with and/or re-build with the people who will make up your community going forward. This the fleet that you will sail with into the future – whatever it may bring.

And Finally, “Culture Eats Strategy For Breakfast”

You may be surprised that this article did not talk about budgeting, side hustles, real-estate investing, how to beat the stock market and myriad of other ways people look to recover from financial disasters. That is because money is not worth anything if you do not have at least reasonable access to joy, love, compassion and equanimity. The examples of unhappy wealthy people are legion from James Belushi to Robin Williams to Kate Spade. Having been dead broke and having recovered from it – I will say it is easier to access positive emotions when you have some money in the bank and income greater than expenses. However, if you are only living to work and make money – it begs the question what is the money for?

Outside of money, recovering from a serious tragic event or a series of them is somewhat similar. The skillful goal is not necessarily to regain or replace what has been lost. In many cases, that is not possible. The goal is to be able live a life well lived with grace and wisdom. However that looks for you.

Peter Drucker is one of the most famous and popular business consultants of all time. One of his most famous quotes is “Culture eats strategy for breakfast”. What he meant by that is that businesses with a positive culture where people worked together on a mission driven basis would always win when competing with a company that might have a better strategy but a less cohesive team. This same sentiment is echoed in the US Marine Corps manual on combat tactics where they stress that the difference between losing and winning in combat is the strength of leadership throughout the organization down to the private and up to the most senior officers.

What I am pointing to in this piece is that it is how you frame your experience (mental culture) not what you do (how to regain or replace what was lost) that will ultimately make the difference in the quality of life you are able to enjoy.

Executive Summary – Putting It All Together

  • You are 100% responsible for the decisions you make and responses to events beyond your control.
  • The shortest path through pain and suffering is to face it and move directly through the heart of it.
  • Given what’s changed what is your or are your new objective(s) that you are going to focus on?
  • How will you own your experience (vs. your experience owning you)?
  • How you mentally frame your experience will determine the quality of your life. In other words, do you see yourself starring in a film noire or a Hollywood movie with a happy ending.