Very recently a deal I structured and was fully commited to went very sour. I have lost a lot more money than I have (or have access to)putting me in a tight situation. How do I pick up from here, how do I restructure my short term personal liabilities and convert them into long term liabilities...without getting a job, as I still have many dreams and ideas to pursue? In the long run the situation appears minor, but right now I am lost for solutions.

-- (so_money@clear.net.nz), October 18, 2000

Answers

Debt is like Brian Epstein trying to get someone to sign the Beatles, you just keep knocking on doors until somebody signs. Debt also isn't everything that its made out to be, I am determined to run a debt-free business, that's my personal goal and I have also partnered with a web development business which employs 40 people and is also now running debt free, because in both cases we looked at debt as the enemy rather than a friend.

That doesn't mean that you shouldn't structure a deal because the more your tangible assets cost the more greenbacks you will need, but if I didn't have at the outset a plan how to manage that debt, or even what modern day debt freaks like call a good exit strategy, then I too would be stuck for solutions.

Personally, all I can say is keep knocking on doors until one opens but unless you have or can establish partnerships who can share the load with you my take on it is that you don't bury yourself too deep.

Note that Mark Zorro is a pseudonym I use to seperate my personal writings at FC from my career, business and family interests, since to do otherwise will severely compromise these interests.

-- Mark Zorro (zorromark@consultant.com), October 18, 2000.

Sorry, I disagree about debt being bad. Then again, I'm one to drink Bud as opposed to Coors 'cause Mr. Coors' product is more expensive per unit, all else equal, when considering the cost of 100% equity financing. 'Course if you can't meet your Int + Princ. payments, then you're really up the creek. More than anything, debt or equity management is all about cash management / cash flow. When does it come in, when does it go out, and how much can you float in the short term, and at what rate?

And it all depends on your philosophy, really. Eliminating your debt will provide you with a lot of personal satisfaction, probably, but you won't be leveraged to use OPM to get a higher return...depends, depends. Of course, if you don't have access to cash or flexibility in the short term (sounds like you don't), then it sounds like you've got your work cut out for you and obtaining a reasonable interest may be hard, unless you have the right kind of [liquid] collateral.

If you don't describe your situation, what you do for work (or don't do, I guess), then it's really tough to have any ideas on how to restructure your liabilities. Just watch your interest expenses, and try to refinance so you're paying more reasonable interest rates...good luck.

-- Brandon Ward (brandon_ward@yahoo.com), November 26, 2000.