“To be prepared for war is one of the most effective means of preserving peace.” George Washington
There is nothing more important than taking care of yourself first. Before anything else in your life, you need to “get your shit together” concerning your own mental, physical and financial well being. It is an imperative of immeasurable importance. It cannot be stated more emphatically.
I make this pronouncement not from a place of opinion but one of personal experience, an incredibly painful experience. I lived the error from every angle. It almost killed me, literally.
My journey is your lesson, exemplified.
It has taken me four hard, long years to regain a semblance of my past self. The lessons were excruciatingly painful, but in retrospect, they’re worth it.
Please don’t be a fool nor naive in this context. Life is going to present challenges. It’s going to strike hard and with ruthless intent. You need to be prepared, or you are going to suffer the consequences, and they can be extreme.
Life’s hardships can destroy everything you have worked for and everything you believe in. But if you are aware and prepared, you can stand ready when that wolf comes howling at your door.
Having your “life house” in order is all-encompassing. It requires a critical look at your physical and mental health and your regime for both, your finances (insurance, savings, emergency funds, etc.) your geographic locale, your alternative career opportunities and a host of others. I am not a professional advisor. I am a journeyman who lived to tell his tale. Hopefully, you can see the right in all of my wrongs.
These challenges will take many forms and pierce all areas of your life. You can expect something in the following at some point in your journey: health issues, relationship breakdowns, job loss or demotion, family issues or a debilitating accident.
Nobody wishes any of those mentioned above to occur and being prepared for what might come is the best preventative medicine that we can prescribe.
None of us can predict when something may occur, but the chances of at least one of these striking you at some point are reasonably sure. Escaping hardship for a lifetime seems like an impossible undertaking for the majority of us.
Twelve years ago, my life was incredibly fulfilling and gratifying. I was a partner in a successful steel distribution company on the outskirts of Detroit, MI. We were making substantial money, and it gave us liberties that enriched us all.
I was single, visited my family and friends regularly, flew around on the odd private jet, driving a new Porsche, bought whatever clothes I wanted to, ate at any restaurant and traveled to the most beautiful resorts and destinations on the planet.
Note: I am describing things and locations that, except for my family and friends, are not gratifying without the foundation of what truly matters in life which is being grounded with genuine purpose, deep and meaningful relationships and contributing to society. Being a semi-rich vagabond who collects objects will never get you to the finish line with a smile. The harsh realities of life are about to unfold before me.
When you are in the midst of enjoying success at a young age, you can feel invincible. You begin to believe that you cannot be beaten.
We had several significant issues in our first five years, and we got through all of them. We were sued by US Homeland Security for retroactive countervailing duties on corrosion-resistant steel (galvanized). They deemed our past five years of shipments as underpaid regarding export duties. We had met the current .051% that was demanded, but the US government had stated that we had to pay an additional 18+ % on the material.
At the time, this was the new Byrd Agreement. It was passed in Congress. All companies doing what we did got hit. We were shipping over 25 mill per year at the time. That adds up quickly. We fought the charge, hired a fast-talking, slick, trade attorney out of Washington, DC. He was astronomically expensive at 1k per hr and utter waste of money. He did nothing and got us tossed out of court. We then just filled out some paperwork at the Detroit border, and we were excused of the retroactive obligation.
Next came a seven hundred and fifty thousand dollar hit concerning a customer delinquency. I had just flown from Nassau, Bahamas to Key West, Florida to celebrate US Thanksgiving with a good customer and who I considered a real friend. I ordered and shipped down some Maine Lobster and Lobster Bisque soup to mark the occasion. Damn, I was making efforts! We spent 3 days together, His family and Me. It felt genuine. I was inspired to take our relationship deeper concerning exposure if they met our credit requirements.
After a few internal meetings between my partners (with reluctance from one; he was right), we agreed to ship steel that was ultimately destined for General Motors to be utilized for the door and hood skins; referred to as electro galvanized “exposed.” This was like platinum in the world of ornamental assets. Seven hundred and fifty thousand dollars worth of material shipped, invoiced and extracted from our inventory. It was now an asset for ninety days concerning a receivable in the eyes of our banker and the criteria defined in our lending formula.
Thirty days came and went, then forty five, then sixty. Our nerves began to shake. I made call after call, collection calls. My partner did too. The owner, my friend, stated that he had a harder time shipping than anticipated but he didn’t deny payment. It was just slow. We asked for partial, he was too tight. We gave him a week and demanded cash in full before ninety days.
You see in steel industry, distribution centres (what we were) source steel directly from the producers, the steel mills. They consider it a privilege to be their customer, and they demand 30-day payment on their invoice. Pay to play; forgiveness did not exist.
Therefore we pay our source in 30 days and hope to recapture the acquisition cost plus profits with 45–60 days maximum. Being paid in 90 days and beyond creates issues. Number one, it’s no longer eligible for borrowing against in what’s called accounts receivable financing nor does it seem likely that payment will come at all. Where there is smoke, there is fire. How true this remains.
120 days later and we still hadn’t been paid. Our cash flow was tightened as our eligibility at the bank had been pinched. We met the owner at a bar in Ferndale, Michigan. Over a hamburger and a beer, he told us that he could not pay us and was “sorry.”
It was at that moment where I came to realize what betrayal felt like, and it induced searing anger. I was a forgiving individual, and I have empathy but fuck you and your lobster bisque brother. I had gone to bat for this man and his company, and he just betrayed me. Even though we made a collective decision to ship the material, I still looked like a fool and a high risk to the viability of our collective entity and partnership. Not something I wanted to be.
I came to realize this wasn’t personal. Entering a business transaction, we do it in good faith when credit and other objective criteria are met. We don’t decide the ending. Extraneous factors come into play. There are no guarantees in the land of exchange. There’s tax to be paid. In this case, a 750k sale came too easy, and the taxation was delinquency on non payment.
As a smaller company, we each held the position of judge, jury, and executioner. We didn’t have a China Wall between our commercial operations and credit management. Therefore, we allowed the subjective and emotional to blend into the objective and rational decision-making process. A dangerous combo when quick decisions are made.
“If you do what’s easy, life will be hard. If you do what’s hard, life will be easy.” Les Brown
During this entire time, we had to deal with two other lingering issues. Our inter-company ownership structure was set up incorrectly as we shared foreign ownership. Our advisors had utterly screwed up the accounting and legal set up of the combined entities. This created an absolute nightmare with regards to proper tax filings and reporting. We had to undergo multiple voluntary disclosures and work closely in audit type situations for extended periods of time. We ended up suing our lawyers and accountants. This was a lingering monkey on our back and expensive to rectify, but we got through it successfully.
The next 360 days were challenging, but we made up the loss. We battled through and came out on top, again. That was 4 substantial battles won. We felt invincible and had a false sense of the unconquerable. Nothing to this point had taken us down. Nothing EVER will be the mindset that we embraced. We were here to stay, and our work ethic and strategic maneuvers would prove it.
The next several years were profitable, some extreme and some marginally but they were in the black.
Then 2008 came, and the world collapsed, initiated by the mortgage meltdown and real estate crisis. We quickly went upside down with the banks utilizing the “mark to market” method of real-time inventory valuation as opposed to the original acquisition cost.
We were bleeding for the first 8 months of the year, and then we stepped up and made the best deal we ever made. GM was being bailed out by Obama. Nobody was comfortable extending them credit as payment terms and the source of payment we’re unclear.
Would the government guarantee the exposure or was GM paying based upon their previous payment terms and cycles? The distribution industry was unclear and definitely not taking chances. Most were savvy operators and they were on high alert for anything that may seem too risky to engage in.
Electro galvanized exposed automotive material was becoming rare. Everyone had cleared out their inventories and were too hesitant to restock. Opportunity knocks. I had a strong relationship with a US domestic producer of automotive grade exposed material, and they had a massive amount of stagnant inventory that was sitting on their floor. They needed to move it and generate cash flow and sales. They were a public entity and had shareholders to answer to. They called and asked us for a favour. Could we take several million dollars worth of steel on a discount? They would extend the credit in these uncertain times. I agreed and pulled the trigger. We bought it all.
For us, it was a massive purchase and one that contained risk, substantial risk. But we were survivors, hustlers and we had a team with great contacts. Our VP of Automotive sales put the next deal together with GM for astronomical margins. She was a machine with a laser focus. We shipped, invoiced and collected payment promptly. We turned a bleeding year into a monster profit. Boom, right out of the park. Again we proved that we can make it through the storm. Nothing will derail this team of young hot shots.
Son, please sit down. It’s time for a reality check. You’re about to get destroyed, and you have no idea how hard it’s going to hit. This is going to hurt your fragile ego and somewhat inexperienced, ignorant self. You’re not prepared.
New Years, 2010. My buddy and I decided that it was a great idea to celebrate at the Fountain Bleau in Miami. We booked a room for 4 nights and bought a 2 seat couch at LIV nightclub for New Years. The seats were on sale, $6k for 2; Jamie Fox was the DJ. Time to bring in the future! We started our festivities around 11 am at the Blue Bar in the lobby and to say we went hard from the bell would be an understatement.
We bumped into some buddies from Oakville, Ontario (the town next to our hometown) and we decided we should all celebrate with any and all elixirs that could be ingested. This was going to be a crazy day. By the time midday came, we were wired for sound. We had 8–10 hrs before midnight … the train had to stay on the tracks.
We hit the pool and enjoyed the sun while maintaining our euphoria. Hell, it was New Years. That’s what people do, right? Definitely not normal people. We finally made it to the opening of LIV’s doors at 9 pm, and we were ready. Our “couch” was above the DJ booth and overlooking the dance floor. I tried to order some food, but all they had was strawberries to go along with the $1000 bottles of champagne, Fuck it, I’ll take 2. I need my fruits.
11:30 pm, I ask the waitress for my cheque, and she looks at me like I am nuts. I couldn’t stand it anymore. I needed to get out of there and go to bed. She made fun of me and then said to hold on while she goes and grabs a few of her friends to chat us up and bring in the last 30 minutes. Little did I know that one of the ladies would be my fiancé 8 months later. We “fell in love in a hopeless place”. … and NOTHING good can come of that as life is about to show me.
I made several trips to Miami over the next few months and what was entirely apparent was that we were about as different as two people could be. We were from totally different worlds, we had different mindsets, different schedules, different desires and different goals. Why did we spend time together? Truthfully, I can’t answer this correctly.
Vanity, her need for support at the time and my habit of engaging in the self-destructive behaviour. Our energy wasn’t compatible. We resonated at different levels. Nonetheless, we played ball and got deeper.
I lived in 2 locations, Troy, MI and Burlington, Ontario. A little different than Miami. She came to visit both and our time was spent spending money shopping and going to the best restaurants we could find. The basis of our foundation was hollow. It was fake. The house was structured with playing cards.
Neither of us trusted the other’s true intentions and yet, we continued to play the ball downfield. It wasn’t slow, steady and respectful. It was combustible, full of doubt and mistrust but again, I stayed.
We always argued and had blowouts of epic proportion. I felt as if I was being tested at every angle. It infuriated me to feel like my integrity was being questioned but yet again, I continued. I was a sucker for pain and stress. Fools and gold. Fools and gold … fools and gold.
A few trips later things became far worse. Like two geniuses, we got engaged. I should’ve realized once we declared our commitment that neither of us wanted to tell anyone. It had to be a secret. Also, planning a wedding was something we NEVER discussed. How could we when we couldn’t agree on the simplest of matters. We would push one another on the most sensitive of subjects and take personal shots constantly.
This relationship was an implosion of ludicrous proportion. It was 18 months of narcissistic abuse and mental anguish. It was a road of massive amounts of money spent going to the best vacation spots and buying the most expensive gifts. Nothing mattered regarding the small things. It drove me to the edge. Hollow begets hollow.
It was such an abusive, turmoil-filled time in my life that it sent me into a depression. I had never had my character or integrity questioned on such a consistent basis nor had my emotions played with. I went to therapy several times per week. I saw a spiritual healer, a shrink, and a psychologist. I learned about mental abuse, narcissistic supply, and pathological envy. I went deep in understanding the root of my anguish.
I knew I was equally to blame in pursuing this relationship and allowing myself to be exploited. But the toil it had taken had enormous effects on who I was. Some people never come back from relationships of this kind. It took me a long time to be able to stand tall and be proud once again.
The issue that became most prominent during this time is that my focus and output diminished. I lost focus as I tried to heal. I did what I could, through therapy, fitness, and my own study but I was far less useful than before I allowed myself to be thrown to the lions.
To be clear, I am not labeling anyone. This relationship was strained at every angle. There was isolation, unknowns, doubts, perversions, and labels. We are both intrinsically good people with warm hearts and issues. Just like the rest of the world. I have nothing but good to say outside of the relationship. Our collective was the issue, not us individually.
The definitions and terms I used are what was described in my therapy sessions. Therefore, I utilize them to express the reality of the experience. I mean no disrespect to anyone.
As I began to stand tall once again, the steel market was unraveling at a rapid rate. Imports were flooding the market, and excess production capacity was everywhere. The producing mills were going customer direct and taking our customers. We couldn’t compete. The material that we held in inventory was sourced at price levels that were too high to compete with the mills. We had to begin to chip away and sell material at a loss. This would quickly erode our retained earnings and weaken our balance sheet. Not the best signs of strength on the eyes of your lender.
It began to get stressful, incredibly so. Our company, the job, inventory, financials became an all-consuming focus and one that seemed to be 24/7. Stress will kick your ass if you don’t gain perspective. As it mounts, so does the debilitating effects. I was not working out as much, I wasn’t eating right nor was I socializing at all. I was becoming reclusive. Consumed by our flaws and defective nature. Shrinkage is a term that could be used.
I went to my Michigan based Dr. and explained all I could. He prescribed me Xanax and Ambien. I can honestly say I wish they didn’t exist. Sinister isn’t a strong enough term for their addictive qualities and long-term effects. Yes, anti-anxiety meds are short-term band-aids. I was blind in the midst of turmoil. All I sought was temporary relief from the relentless encroaching suffocation of the puppet masters. Those that had greater control over our viability than we did. There was a monkey on our backs, and he felt like King Kong.
“I have absolutely no pleasure in the stimulants in which I sometimes so madly indulge. It has not been in the pursuit of pleasure that I have periled life and reputation and reason. It has been the desperate attempt to escape from torturing memories, from a sense of insupportable loneliness and a dread of some strange impending doom.” Edgar Allan Poe
These meds gave me the sense of calm and escape I was looking for at the time. Note, I did not say “what I needed.” This is an essential point that we will elucidate shortly. But for continuity, I will allow the flow to progress.
I would leave work and immediately medicate myself so I could escape the reality I was living. I lived alone. As I was from Canada, I had no family in Michigan. (I had some truly wonderful friends that saved my life to be candid. They know who they are. I will never forget them nor diminish their incredible support ). I hid from reality. I wasn’t adequately prepared to weather a storm of this magnitude, especially after just regaining my footing from a brutal and mentally abusive relationship. Sleep was all I desired. Real life was getting too stressful and intolerable for me. I wanted to punch my exit ticket however irrational that may seem.
The negatives in our business continued to mount. The market was collapsing even further, and that made our goal of inventory reduction, creating liquidity and lowering our risk profile to be even more challenging. To execute anything remotely close to our plan, we needed to take more significant losses, erode our balance sheet further and take ourselves more in-depth into the mix of questionable sustainability.
There is a saying that I have come to understand on the deepest levels: “where there is smoke, there is fire.” We used to say that amongst ourselves when we felt that a customer or someone we all knew in our marketplace would slow down concerning payments or take a hit from a customer on the street. Typically, the vessel was cracked, and there was leakage in some context. The stalwarts of the industry had deep enough pockets to sustain these delinquencies and stretched receivables. We were not one of those entities nor was the market convinced we were either.
To understand the compounding effects of the phrase “shit rolls downhill.” Once the market, consisting of our suppliers and customers become aware of the fact that we are potentially suffering, their mercy disappears, and they seek to capitalize. You cannot blame them, positions of power will always take advantage of the weak. It is how they feed their beasts to reach new levels and gain competitive edges. The weak get eaten; this was the plains of Africa personified in the mean streets of Detroit’s steel distribution industry. Empathy was abounding, but mercy was not.
It became harder to sell at prices that were high enough as our customer base understood what was going on so they would low ball us, stretch out their payment terms and leverage our weakening posture. All of our suppliers were now closing the door on any further extension of credit terms so blending anything new and price competitive became a futile endeavour.
The banks want strong sales at maximum prices and expedited payment terms. The Lions see it differently. They’ll low ball you to the extreme and stretch you out. Nothing like being sandwiched in the middle. Good times.
We had material that was overpriced and targeted for customers that could no longer use it or want it. We were far too bloated, and we were gasping for air regarding inventory. Our taskmasters didn’t care. They needed to cover their exposure and understandably so.
They sent in a team of “consultants” to guide us. Though I can honestly say none of these people knew the game anywhere near the levels that we did, their participation was instrumental in having us follow the guidelines that were needed to rectify the erosive issues. Deduced to a basic level, they are there to keep order and flow. They bridge the gap of communication when tensions run high, and they do. As critical planning and execution go, not even close. They don’t have the street credit (actual corporate warfare experience) to understand how the game really works. No disrespect. Let’s call it as it is.
We had to let go of so many excellent employees, who I considered family. People that gave a decade plus to our cause. They had families to support and obligations. Our failure became my failure to have their backs as I always promised. My pride was gone as was my integrity. I failed them as much as I was unable to retain operational control along with my partners. I took this so personally that it was destroying me. I had failed those I truly cared about.
The writing was now on the wall. It wasn’t written in chalk, but spray painted permanently as a mural on the side of a crumbling building, visible from I75 North and South, in the mean streets of Detroit, Michigan. Reality is harsh, and forgiveness doesn’t come easy. We all have a job to do, and that is to protect the entity and institution that supports us; no hard feelings in retrospect. This is life, and it isn’t easy. This is just business but accepting that reality in the midst of turmoil is not easy.
The bank had us on personal guarantees. We were tied tightly to the essence of our corporations. They could pierce our corporate veil and come after our own assets. All is fair in love and war. As it became apparent that we were terminally ill, I personally felt the same. I had a lot of insecurities, and I pinned my identity to the life I had lived. A young, successful steel guy and now it was unexplainably painful to accept the fact that I was now “an older, failed, journeyman who had a crutch; prescription meds.” My identity was fading.
I became physically and mentally sick beyond my own comprehension. My nerves were destroyed, I lost weight, my voice was meek. I couldn’t speak, even through a megaphone. I also contracted a form of Lyme disease at the same time. It came from a tick bite I received while golfing. This compounded my physical condition. I needed help. I needed saving. I was scared.
Asking for help in your weakest state is something that I never in my life would have even considered having to do. Guess what? None of us do. The dreaded feeling of being honest, both with myself, my partners and most importantly, my family was the most challenging thing I ever did in my life. I was humiliated, I was defeated, I was no longer the man I knew. Hard pills to swallow, perhaps pun intended. At this point, I couldn’t tell. My life was reduced to shambles. I was unrecognizable even to myself.
I finally hit a wall; I broke down; I collapsed. I was done. I didn’t quit; I fell apart. I had nothing left to give. I needed to save myself. I had nowhere else to turn for salvation.
I’ll never forget telling my parents, face to face, that I needed help. It was a pain that I never knew I could feel but the second I did, their instant unconditional love and support, at any cost, was genuinely liberating, inspiring and life-saving. I hit bottom, rock bottom. There was no farther to fall. But love surrounded me. There were no judgments. I could work on stability and then hopefully rise once again.
I failed, I folded, I tapped out; reality took me down. I wasn’t adequately prepared for the unexpected, and it hit me from so many angles that I got crushed. It is hard to try and honestly articulate the intensity of the experience. It was life-changing. It was powerful.
“The secret to happiness is freedom… And the secret to freedom is courage.” Thucydides
My father accompanied me to a detox facility in Tampa, Florida. I had to fight the dependency on the anti-anxiety meds plus eradicate the Rocky Mountain Spotted Fever (a form of Lyme infection) at the same time. It wasn’t pleasant. I spent over a month there, and it was ugly.
There was a week where I fainted over forty times. As soon as I stood up, I’d lose all consciousness and collapse. My pops wheeled me around in a wheelchair. He even bought me milkshakes and cheeseburgers.
Family first, forever.
Having completed my detox, the hard road to recovery was just beginning. I needed guidance and support. I had the incredible fortune of working one on one with an addiction therapist. She was beyond exceptional and guided me like an angel. Was it easy? Not even remotely close. I went almost 3 weeks with minimal to zero sleep as my body readjusted. Trust me, you’re going to watch some strange things on YouTube for three weeks without sleep. Delusion is real, or is real delusional? Ponder that.
I worked out daily, I got a dog, I began training in jiu-jitsu and boxing, I eliminated any and all toxic people in my life. I ignored the happy haters. Hate on brother. I worked on me. You have to love yourself to give quality love to others. I was determined to do just that.
“And once the storm is over, you won’t remember how you made it through, how you managed to survive. You won’t even be sure, whether the storm is really over. But one thing is certain. When you come out of the storm, you won’t be the same person who walked in. That’s what this storm’s all about.” Haruki Murakami
Today, I am driven by purpose. I am inspired to help others and contribute positively. I have an incredible woman who loves me unconditionally. I feel blessed to share my life with her. I love her beyond words. I am closer to my family as well as my lady’s. We share truth, wisdom and what’s real in this world. We share love, unconditionally. I have an incredible circle of supportive and positive friends. They enrich my life daily. They inspire me to be the best person that I can be. Life is beautiful, and life is worth living to the fullest.
Just remember the details. It is where the devil resides.
Extreme challenges and adversity, however unexpected are going to come your way at some point in your life. Knowing when is impossible. Being prepared is not. I could have done so many things to be ready for what life threw at me.
I could’ve remained healthy through disciplined exercise and positive thinking. I could’ve spent less money on “things” and fancy trips to places that didn’t leave my soul inspired. I should’ve built a larger financial war chest for times of uncertainty instead of counting on the retained earnings that were held in our company. Be aware, retained earnings are not yours until you deposit in your personal account.
I could’ve recognized that certain relationships were just not healthy to pursue. The eradication of toxic and harmful influences in my life was instrumental in my personal downfall.
Who is the blame you may ask? Me and only me, period. I could’ve been acutely aware that nobody is untouchable and even though we survived a few difficult battles, the war we lost. The list goes on. It will always go on.
Preparation is a fluid undertaking. Never stop paying attention. Complacently not only breeds mediocrity, but it also unlocks the fortress for the thieves at night.
Get your “Life House” in order.
It is the Critical Imperative.