Start From Where You Are, is a guide for you, the entrepreneur, to a place that will help you reach your personal goals, both financially and emotionally. Learn how to take your current situation and turn it into success. Follow your heart and learn how to create a business through simple to understand and fun examples. The lack of jobs and crash of the housing market have left an entire country looking for ways to pay their bills. The internet has helped turn ordinary people into entrepreneurs, forced to find new sources of income. Americans are weighing their options and starting businesses at unbelievable rates. Rather than being hardcore entrepreneurs, these are regular people surviving financial crisis and potential foreclosure. You are the hero in your story. You will be given simple clues to how you can make your life exciting and fulfilling. Too much you say? Then you do not believe in yourself and your ability. Regardless of where you have been in the past you now find yourself where you are. Start From Where You Are by taking a personal assessment of who you really are and what you enjoy doing. I have included a worksheet called the 1, 2, 3's of Short Term Goals, which can be completed while you read. You should pay attention to the thought process that has been laid out for you. Thinking like an entrepreneur is natural for some, yet seemingly impossible for others. There are no guarantees in life and your journey will not be easy. If you assume the role of hero and muster your brains, heart and courage, you can Start From Where You Are. You must begin by believing that the hero always wins; with the right plan. So: Start From Where You Are.
START FROM WHERE YOU ARE
By KEN ESRIGAuthorHouse
Copyright © 2011 Ken Esrig
All right reserved.ISBN: 978-1-4634-3716-9Contents
Start from Where You Are!..................................1The Housing Market Crunch..................................7We Always Start from Where We Are..........................11You Are at the Top of the Page.............................17Long-Term Goals Must Be Panoramic..........................23Set Simple and Precise Goals...............................27Your Yellow-Brick Road.....................................33Working Out the Details....................................39Follow the Dollar..........................................45Is It Really That Easy?....................................51Making Money!..............................................55You Can Come Up with the Idea Yourself.....................61It's Okay to Be Afraid.....................................65Addendum: The 123 of Short Term Goals......................69
Chapter One
START FROM WHERE YOU ARE!
So, you used to be successful and very important. You have accomplished many things. You have a great story to tell. But you are upside down on your house or just can't find a job.
Many of us have had to come to the realization that the world has changed around us. The economy and the job market have all but collapsed, and our homes are not selling for enough money to cover our mortgages. We are upside down!
For years, we earned money doing what we liked and going to work each day with a smile on our faces. Our families were happy, and for the most part everyone had not only what they needed but also what they wanted. Times were good, and the "harvest," so to speak, was plentiful. Banks were lending money liberally, and mortgages were so easy to get that, in some cases, both spouses did not have to sign on the mortgage. Many people were able to get insane interest-only loans with no income verification.
None of us individually are to blame for the economic downturn, but blaming the government, the banking industry, the insurance industry, and financial markets will not change our situation. The entire country—and the world, for that matter—experienced a radical downturn in the availability and flow of money to lenders, borrowers, and consumers. As a result, the entire world—but for our discussion, the entire country—has found itself in a housing market like none that it has experienced in thirty years.
As a result, some people have simply stopped paying on their loans and live in the house that they call home. Many couples have experienced great frustration over their inability to meet their financial obligations, especially when they lose their jobs or are unable to find any jobs. Many divorces occur when finances become difficult, flooding the housing market and adding to the backlog of people in separations and new divorcés, almost none of whom can afford a home by themselves.
The banks inevitably have no one to go after, and the market continues to crumble because of sales of overpriced, foreclosed homes. So the auctions begin. The market corrects itself through the flood of opportunities for buyers. Some people think that everyone loses when the economy is bad, but for every loss, there is an opportunity. For every foreclosure of this nature, someone turns to the rentals market. Statistically, the husband moves out first, and the wife and children move out right before the foreclosure. Let me assure the reader that I do not blame divorce on the foreclosure market, but this is a very real scenario that might realistically apply to the reader. What do you think?
Are you reading this now wondering how you could have paid your mortgage or how you can pay the note? Many people simply give up. They throw up their hands and simply walk away from their obligations. In any sport, someone who walks away because he's losing is called—that's right—a quitter!
How many people do you know who have told you that they are upside down on their home loans and cannot pay the mortgage? How many do you know who have been so stressed out about it that it ruined their lives completely? How many people do you know who are living under a bridge because they could not pay their mortgages?
Now, how many of their well-intentioned friends and acquaintances who have decided not to pay their mortgages are with them under that bridge? How many people have had to sell their cars? Are those friends now driving them and filling them with gas? Are they taking the kids to school and out for snacks later and then putting everyone on a plane to go visit Grandma and Pop Pop? Are they starving themselves, or are they looking like they could shed a few pounds? Maybe a terrible tragedy befell the family. And again, I am not suggesting that homeless people ever expected that fate or that divorce could have been avoided had money not been an issue. That is my official disclaimer, but I will never believe that paying nothing is better than paying something toward your debt. Nor do I believe that all of these people really thought that the right thing to do was to stop paying their home mortgages. Making the decision that it is better to stop paying completely and pretend that you can afford other things even though your home is soon going into foreclosure is a lie to yourself, your family, and your friends.
What about our moral fiber, our character? What lesson does walking away teach our children? How few times did any parent say, "Sorry, kids, but you're going to have to share a room so that someone can rent this room and keep us in our home." Or is the usual message sent to children more like this: "Kids, when we get back from Disney World, we are going to be moving into an apartment. Sorry, but we can't afford our home." The tragedy is that this kind of behavior has become generally acceptable.
These are the same people who tell their children to be honest and work hard. They are good people who have no idea what to do other than to surrender their homes to the bank. These are our neighbors and friends who sat by and waited for the sheriff to come to their homes and serve notice in front of horrified children and the always-present watch of the neighbors. This is the life they have chosen. They preach lessons of honesty and integrity to their children and employers while denying their obligations on their homes. Their home, the very sanctuary and long-fabled castle to the king and queen, is now being surrendered at a loss, but not just a financial loss—a moral loss as well.
Most everyone I know wants to be a winner. Who do you know who says, "I wish I would lose my house"? But do you know one person who sold his car to help pay for his home? Without insurance, gas, and payments, the car money could become house money. Am I wrong? Yes, some situations are that bad, but the majority of foreclosed individuals go on living a fairly normal life, only in a different habitat.
What lesson do we learn about these people who do not honor their commitments? They have decided not be industrious and committed enough to themselves and their families to set goals and work hard to get out of their predicament. What lesson would they share with their children and grandchildren? The excuses abound, but there is only one thing they can say and the only lesson I see is, "Everyone, I am a quitter!"
Well, I am not a quitter, and neither are you. Let's start from where you are. I will assume a couple of things—first, that your home has not already been taken from you, and second, that you are an honest, hardworking, individual who wants to do the right thing and pay your bills because of the respect you have for yourself and your family. Then let's start from where you are!
It is critical that you be realistic and honest with yourself and your family. Do not try to hide the problem, but also do not go postal. You are not alone! I must confess that I too have a wonderful home that I really love and a mortgage that I can't stand. There is always a cost for the things that we want. In the winter of 2007, my business suffered three devastating blows that changed the fundamental basis of my existence.
Our number one client moved its business to a wholly owned service that competed with me. My second-largest client moved its office and would no longer need our services, but at least the people were sorry to leave us. The last was a devastating cut in our insurance reimbursement rates, which reduced our charges by 45 percent without regard for any of our operating expenses. The sum of the situation was very clear: the party was over for now.
My partner of twenty years and I would have to make some difficult decisions to survive this change in our reality. The entire playing field changed as several large competitors simply closed the doors because they knew they could not fulfill their obligations. They quit, right there and then. Multimillion dollar businesses with multimillion dollar loans simply walked away and closed up shop. As the saying goes, business is business, but I was not so lucky. My name was signed on large notes, and neither the business nor the value of the leveraged property would fulfill my obligation.
It was just like being upside down in a mortgage. One loan on my most used machine was $35,000 per month, and another cost about half that amount. These loans had been taken out based on sound business expectations and a business history of twenty years. All of a sudden, the bottom fell out and the business could no longer afford to make the monthly payments. Not only that, but two partners were trying to make a living out of the business while the financial picture resembled the last moments of the Titanic.
Almost no business was left due to increased competition, and the business that remained was going to pay only half of what it used to pay. So a deal had to be made—him or me. I believed in myself and my ability to find a way to live up to my commitments no matter what it took. I knew that the road ahead was filled with bad things that could swallow my business and me in one bite, but I still could not just walk away. I could not give up without the one thought that I will recommend to you now. I was in my chosen field and believed in my plan based on my personal assets and desires. I believed that if anyone could save this business, I could. I believed that someone would succeed in the business and that I am the best there is, so I should be able to fix all that was broken and rebuild.
You must believe in yourself and your ability. You must believe that if anyone can come out of a situation as bad as being upside down in your home or saving a business from ending up on the bottom of the ocean, you can. You can do it. Yes, you! Of course, you will have to set goals and make a plan. You will decide what is right and what you must do. You will make an honest assessment of your skills, ability, and goals and then make a commitment to honor your plan.
I was taught a lesson years ago by one of my mentors, who was the president of the Baptist Medical Centers in Birmingham, Alabama. We were riding in the car one day, and he asked me if there was anything I wanted to know. I thought for a moment, and I asked him when he considers a deal to be good. He hardly hesitated when he told me in his high Texas twang, "When both sides are happy with the deal."
I made an offer to my partner—a nonnegotiable offer that would be acceptable to me either way it went. I would either pay or stay. He could pay me the same amount as I was willing to pay him, and the business would be his. Or I would pay him, and the business would be mine. Either way, something had to give. The loans were too much to handle and needed to be renegotiated. I was so emotional that I ended up in the hospital with diverticulitis, but I would not budge on the deal. I knew that it was fair on both sides. Danger would result only if we disagreed.
I was screaming from my hospital bed, and it was not helpful to my condition. Can you imagine a patient screaming from his bed to some lawyer he has never met about how there is no way in hell the deal will change? So as the deadline approached, my partner and I made a deal. To this day, I wish it had gone the other way, but I am still standing four years later.
Just like being underwater in your home, I was really underwater in the business. No one thought that we could bring the costs of operation down enough and stay in business. The loans were choking us. The banking crisis was looming large, and I could not make the large payment. I missed a payment and then two. Things looked grim, very grim. The bank, which had been so nice to me for so many great years together, was now saying mean things.
The bank did not want me to miss a payment, but it also did not want to help me based on the same reasons that were sinking others in my industry. "Well, then, come get your machine if you want it," I insisted over the phone. "I will send you partial payment, and you can keep calling me every day to remind me that I am late on my payment." I could have refinanced a used piece of equipment for a longer time so that I could stay in business and make good on this loan, but that was not going to happen.
I sourced other banks and finally found one in Colorado that thought that I would be able to make a loan half of the amount of the monthly payment. I would not have to personally sign for it, but I would have to subordinate any income in any month that I did not make my payment. That means that I couldn't take profits or a paycheck if the loan was not paid on time. Deal! I had paid off the old loan, cut my operating loan in half, and was already marketing new business. Three days later, all banking in the country came to a screeching halt. If I had not moved to refinance as quickly as I did, the opportunity would have vanished. Another scenario would have played out, but the results would have been the same. I am sure I would have found a way.
You are reading my story, and now it is time for you to do the same thing. You have to figure out how you can afford your house. You can't lose, and you can't quit. You have to do everything possible to make sure that you do not get to the point of home foreclosure, but even if you do the lesson is the same.
Decide what you can and cannot do with your life. Evaluate yourself honestly and completely. Don't leave out important assets like your family. Make sure that you set a plan in motion to earn enough money to pay your mortgage. Be creative and determined. You are not alone. Do you think you are the only one who has no equity and cannot afford the monthly payment? Do you think that your best days are behind you and not in front of you? Do you think that anyone else is going to work hard to help you if you don't help yourself first? What do you think? Are you a quitter or a winner?
Chapter Two
THE HOUSING MARKET CRUNCH
There is a saying among boat and yacht owners that the difference between a big boat and a small boat is how much it costs you when you hear a crunch. Our common experience was that things were great until we all heard the crunch in the housing market. Individually, we all felt at the time that we did nothing wrong. However, we now are experiencing the other side of the downturn.
The differences between income levels have more than diminished in the recent housing market crunch. Just for the sake of comparison, let's observe the hierarchy of the crunch theory. First, we start with the lower priced starter homes and homes for beginning families. These homes ranged from $100,000 to $300,000 when purchased. They are in lovely communities, and all of the neighbors have experienced more than their share of the housing crunch.
Many of these homes are being foreclosed on because the jobs that generated the mortgage payments vanished. The banks stopped lending, and the wheels on the economy came to a screeching halt. This is the greatest opportunity to the smart investor. Even the houses that have not been foreclosed on have owners who are struggling to keep up with the payments and would love to sell. Many of these households have taken second mortgages and are so upside down that the bank dreads taking the houses back.
This is an opportunity for many people. Take a second and think about what is happening. A distressed market with sellers desperate to be chosen over the next home is a new phenomenon. Listings have no real price and are subject to a viable buyer with a strong will. Take the opportunity to put a contract down on one of these homes, and you know you will be happy with your side of the deal, but will the seller? Who cares?
Now is the time to buy a home in a community that has low overhead and that over the coming years will certainly regain value. Enjoying your low cost of living will confirm that you made a great deal. But what if your taste and your wallet want more? What if you want to spend between $300,000 and $750,000 and you wonder when you should buy. What about now?
The housing market has created a vacuum that has destroyed the basis for prices. So many homeowners simply want to quit, walk away, and not pay their mortgages. Here you come, with your sense of confidence and courage. Do your homework and find out what is for sale in your market. This is not like any other housing purchase you have made in the past; this market has no cost basis. Now is your opportunity to start from where you are, if you have the money or can get the mortgage.
Forget what the seller is asking. Forget what the bank is asking. What do you want? What are you willing to pay for a house? What bank is going to turn you down if you have maintained your credit and have a plan for making your payments? You call the shots. Take your time, but do not waste time. Find a neighborhood or community you like and find out everything you can about it. More important than comparable sales and what prices other homes are currently listed at, what would you be willing to pay for the house you have found? If you are in a position to buy, then you are riding in on a white stallion to save the distressed owner from a mortgage and bank that keep him awake at night.
(Continues...)
Excerpted from START FROM WHERE YOU AREby KEN ESRIG Copyright © 2011 by Ken Esrig. Excerpted by permission of AuthorHouse. All rights reserved. No part of this excerpt may be reproduced or reprinted without permission in writing from the publisher.
Excerpts are provided by Dial-A-Book Inc. solely for the personal use of visitors to this web site.
