Blog Post Date: Oct 18, 2005

Blog, Free

Saturday Commentary:
Writing in this blog has been quite enjoyable. I have enjoyed the comments and responses that I have received so far. I invite everyone to stop by, comment and leave a link to your personal finance blog.

In writing about financial maturity, I am usually pulling from my own experiences. Since a very early age, I have always been extremely anxious when it comes to money and credit and debt.

A silly but important story.
When I was about 21 years old, I owed $5 on my TD Visa credit card. This was after months and months of paying down a $500 balance. I was so debt anxious that I actually lost sleep over the $5 I owed. Don't ask me why. The next day when I got paid, I literally ran down to the bank and paid my $5.00 off. I was then debt free.

It was cool that I was debt free, but it was scary that I had that much anxiety over the enormous $5 outstanding. That was the beginning of my financial maturity process.

I suddenly realized that the banking system wasn't going to crash without my $5.00!! I realized that I had always paid my bills on time and that my credit rating was perfect. The amount of anxiety that I had wasn't going to make my credit rating any better. All of the fears that I had relative to my meager $500 credit card were pretty much unfounded.

Since then, I have created, developed and ran a few companies. In my employee days I was a financial analyst and my job title was to administer company debt, foreign exchange transactions, fixed assets etc. I administered $110 million in debt, $650 million in fixed assets and $35 million in foreign receivables, corporate payroll, amongst other things.

So... on a corporate financial level I've seen many things that the average person wouldn't see. I've seen what happens when a large company defaults on its debt. I've seen what happens when foreign exchange changes rapidly when I'm trying to sell a 650,000 pounds sterling letter of credit.

The beauty of my corporate experience is that it rings true for the consumer. Leveraged by outs of the 80's created a glut of debt that hurt and destroyed many companies.

It is my opinion that the U.S. and Canadian consumer will soon feel the same damage. That's why I'm pretty passionate about this topic.

Corporations did not have financial maturity in the 80's when they were taking on debt. They had no idea what was going to happen to them. They were more interested in the instant gratification of expansion via leveraged buyouts.

I have learned and grown a huge amount personally since my $5 credit card debt - anxiety days. I still have the same fears and anxieties, as they are part of my nature. However I have learned to deal with these anxieties in a much more productive fashion.

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