Often I think about how my life would have been so different today if I would have listened to Jeb Z.’s advice and met with a “bankruptcy attorney” instead of consulting with Mark Z., my tax and financial consultant from childhood as well as my dad’s personal and business tax and financial consultant for 20 plus years. You see, when I was active in my addiction and trying to grow my solar business, I was afraid that Mark would tell my dad about all of the unmanageability that was going on in my business.
A few errors that I was making off the top of my head were: taking out cash to pay vendors, taking out cash to pay employees, coding employees as independent contractors to avoid taxes and paperwork, taking out cash to maintain my drinking and drugging habit, using the equipment loan and lines of credit that were secured by for solar jobs to fund my side projects of building a solar, off the grid tiny house for Mario, funding hydroponic research, building out a shipping container with solar panels, a solar hybrid generator, and wooden shelving setting it up for a ‘grow operation’ as well as trying to pay my own salary.
You see, I went for about 6 months without taking home a pay check. I don’t know how or why my wife put up with me during this time. I had racked up 8 credit cards that were attached to her name in one way or another and she didn’t know about the amount of debt on them. I was using credit cards to pay and the loans from banks to pay for groceries, a Nissan van payment, a $750 a month cell phone plan that included two cell phones, and multiple hot spot pucks and phone plans. I ended up paying for Mario…and ultimately his brother Jose too.
I was paying Landis $1000 per week, Mario $900 per week and eventually his brother Jose $900 as well. To say that there were a few holes in the life raft is a drastic understatement. I thought that Landis needed a $5000 signing bonus and that Mario needed me to buy and custom build out/ furnish for him a tiny house in order to work for me.
You could call the Mario and Jose situation “Codependent Creep.” This is when one brave worker decides to try out a small business owner for a short term, minimal hourly rate. He may start out working for this person…lets call him ‘Matt’. He starts to work for Matt being paid with a ‘check” and working a pretty defined scope of work for a set hourly rate…like $10 per hour. Before Matt realizes it, Mario is liking the job so much that he is over producing. Mario is doing WAY more than what a $10 per hour white or black guy would ever dream of doing. This is not a racial thing…it is the truth.
I heard one guy say “when you have Hispanics on your crew and you show up to the site, the Hispanics jump out of the truck with shovels in hand. The white and black people on the crew get out, slowly, walk over to the hole, smoke a cigarette, talk about how big of a hole they have to dig today, then they walk back to the truck, tie their shoe, get a snack, grab a shovel, then maybe…if you are lucky…they will grab the shovel and start digging. The Hispanic ate the snack and tied his shoe in the truck and is ready to work when you pull up to the site…before you turn the truck off, he is out of there.” This is what my bosses were saying. I mean, it was a compliment about their work ethic but at the same time, it is a gross stereotyping of people.
This over production allows Matt to put more projects infront of Mario. Mario continues to produce and do a wonderful job that Matt gets more work for him to do. Then, Matt get so much work for him to do that one day soon, Mario says, “Mateo, tu nessessitas mas ayuda. Tengo un hermano para manana.” Mario says makes the recommendation that, ‘for tomorrow’ he has a brother to help because I need help.
So, since it is nothing long term, Matt says sure, bring on your brother for helping us tomorrow because by this time, I’ve already committed to more work than what is physically possible for just Mario. So tomorrow, I paid Mario and Jose for their labor. Sure, they might have been able to do double the amount of work as Mario alone, but guess what….I’m paying an instant double the salary. Oh, did I say salary, they were independent contractors remember! They started out as independent contractors and getting paid with a check remember.
So, day one turns into evening one and Mario looks at Matt and says “Manana por Jose? Tu tegusta trabajando con Jose?” Tomorrow for Jose? You like working with Jose? Matt’s codependent ass can’t say NO….because Jose did a wonderful job and helped us do double the amount of work. So Jose shows up with Mario for day two. This continues and turns in to a 5 day a week committment of not just one hispanic, but two. The Hispanic Creep turns into two workers, 5 days a week…but then, we have Saturdays too. Mario makes the Friday project one day roll into Saturday because there is no clear boundary set by small business owner Matt. The boundary of limiting the hours worked or clearly defining what will get done today is never set.
So now the Friday afternoon project rolls into the Hispanics telling Matt that they will finish it up on Saturday morning. So now Matt, who really needs to be spending Saturday playing with his wife and daughter, now Matt is having to drive to Red Bank to pick up his Hispanics early on a Saturday morning. Oh did we mention that Matt now has to start being their transportation because one day Mario’s unreliable piece of shit car didn’t start one day. Matt is so addicted to Mario’s work style that he is 120% dependent on Mario now starts to have to drive 45 mins one way each day to pick up Mario. This didn’t just happen to Matt and Mario’s relationship. It happened to Matt and Danny’s work relationship as well a few years earlier in the pine straw business days. It is an exact replica to what happened recently in the solar business. The dependency of a few key Hispanic employees crippled my small business.
I surrendered and called a meeting with Meagan and Mark. This was after my dad and I were sitting down one Sunday trying to take an inventory of all of my debt. I presented nervously to Mark this list of credit cards, unpaid and outstanding loans, and as many account balances as I could manage to uncover. I had racked up over $330,000 in unsecured debt…this was not including the house that my wife and I owned which ran the sum of debt to over a half a million dollars.
He advised me to cut up each credit card after closing as many of them as possible. Then we set up a plan to start paying off the ones that were in Meagan’s name. Any of them that would cause her credit to be damaged, we actively worked to pay them off. I had to throw my credit out the window, or under the bus…however you want to look at it. Anything that was Warren Solar related debt had to be segregated and written off as bad debt. There was no way that I could pay those credit cards and business lines of credit at this point. I’m so glad for quality advice. Today, I am recovering one day at a time and am tracking expenses and income to the penny every day. I now have a handle on every dollar and we have restored our net-worth to $173,857.31 today. Looking forward to the day when this is a positive $330,000. That will be a miracle. But, just for today, I will do what I can to not debt, not borrow any unsecured money, don’t bounce a check and pay every bill on time.
