In the fall of 2015, I was ready to pack it in. I had two businesses going, things were OK financially, but I was burnt out. I decided I was going to try to work for Dave Ramsey. I applied to a couple jobs on his website, started thinking about closing my businesses, and called my sister-in-law to let her know things were going to be changing.
Thinking back, I'm not sure exactly how it all went down, but nothing ever came of that. I kept running my businesses, hunkered down for the winter, and joined a self-improvement coaching type class. My business income was lower, but consistent.
Spring was one of the most exciting times I've had as an entrepreneur...advertising seeds I had planted during winter and ideas applied from the coaching class led to the most rapid growth in my business I had ever experienced. Monthly sales went from $12,000 in January to $45,000 in April and May. I left for an anniversary vacation in early June, and it became very clear upon returning that I had made some big mistakes, grown too fast, hired too many employees, committed to projects that we simply didn't have the experience or resources to complete.
Summer was the beginning of some of the toughest months of my life. It started with a very poor decision regarding real estate. I purchased a house to flip in an effort to make up some of my losses, and to keep my guys employed. Buying a house for $140,000 and selling several months later for $115,000 is not what I would call a successful flip. As you can see from the graph above, it didn't end well. I decided to close my businesses effective the end of August, and started selling all the business assets...vehicles, properties, office furniture, anything of value to use to pay off debt.
Similar to the dot-com bubble of 2000, and the housing bubble of 2008, my business' explosive growth was buoyed by debt, and the correction was inevitable. It was at this point that I considered bankruptcy. I had several loans, but I had taken one loan from a friend that I needed to pay back first. Fortunately, I'd invested in some gold, and was able to sell that gold to pay off this loan.
Just like it always does, winter came after fall. I was able to get a job driving for Fed-Ex as I looked for better opportunities elsewhere. The pay was low, but consistent. I had a few interviews and eventually took a better job elsewhere and moved mid-December.
With Spring came happier times...we'd settled in after the move, found a great church, and were enjoying a more relaxed life than the crazy busy and exciting times from the Spring before. Always the entrepreneur, I started thinking up ideas of ways I could make extra money on the side to pay down our remaining debts more quickly.
Which leads to now...I just officially launched a side business doing financial consulting/coaching. Life is good. The trees are green.
As I start meeting with clients to discuss investing, I was challenged yesterday with tailoring my advice to various situations. Younger folks just starting investing, older folks closer to retirement, in different seasons of life in a way.
I paused when I got to the page going over my simple investment portfolio...25% US Stocks, 25% Real Estate, 25% Gold, and 25% Corporate Bonds...will this work for this situation?
After thinking it over the rest of the afternoon and then backtesting about 20 different asset allocations on portfoliovisualizer.com, I decided, "YES, this portfolio works for pretty much everyone!"
Here is the part where I try to match each season with each asset... Wish me luck! 🙂
I seem to always try new things in the spring. It's when I start new businesses, try to expand, hire extra help, etc. It's the time for thinking big and taking risks. Stocks overall have the best return, but they also have considerable volatility. My spring last year was a good reminder of this.
Summer is when your investments in Spring either pay off, or like the house I tried to flip, they don't. Real estate really reminds me of this because a property purchased for a good price, and good tenants can reap long-term great cash flow. On the other hand, real estate can be volatile like stocks...
Fall is one of my favorite seasons, and similarly, gold is one of my favorite investments. If you'd invested in gold in the early 2000s, even with this 8 year bull market we currently have, your gold would have outperformed the stock market... In my experience, gold is there for you when things go bad, and gold will buoy up your investments when the next stock market correction comes...which many are saying could be soon!
Winter is for hunkering down, being predictable, taking less risk, and preparing for Spring. Although bonds have a lower return than stocks or real estate, they are more consistent, less volatile, and a bit boring, like reading a good book by the fire on a cold day...versus cliff jumping with your buddies in June.
For more about this portfolio and how it's performed, check out my earlier post: Simplifying Investing.