Adam's Financial Blunder - The Past

My First Foley in Finances

11/05/2023

A few weeks ago I wrote about my current financial situation and my plans to get out of debt. In the coming weeks I will do an update for my current situation. For now,  I wanted to give some more insight on my past in regards to how I got into trouble the first time, and if things did not go the way they did I would probably still be digging my way out of it.

Let's go back to 2015. I just graduated College, I got my first full time job, and I was itching to start a side hustle. In college as a hobby I got into Photography. I bought a Canon sx50hs. A pretty nice beginner camera for those that wanted to do more than just point and shoot. I got Adobe Photoshop and I started learning the software and taking lots of photos. I drove all around the state as I like to shoot Landscapes. 

After doing this for some months my friends and family suggested I start to do photoshoots with people. Everyone that saw my work liked it a lot and thought I would do great with people. So this led me to buying a better camera and lenses and a professional grade photo printer, lights and reflectors, the works basically. I thought I could do a self sufficient photo booth type business where I went to events, like comic conventions, and set up a mini studio and edit the photos over night and email/print them for the patrons to pick up either later that day or next day.

This was a great idea, if I didn't try to scale before I had even started. I ended up sinking around $4-5K into this little venture before I had even gone to my first event. I could have done this with much less overhead and gotten the same results for my customers. I was basically in the red before I even started. I didn't save up any money to help cover going to these events and I just put everything on credit. I ended up having to sell most everything after my first event as I could not keep up with the payments for the equipment, which I put on Credit cards, and I had to sell the equipment to pay for the equipment. 

At this point it’s 2016 and I am about $3-4K in credit card debt. Not terrible all things considered but still not great. I was able to make my minimum monthly payments and all was well. I should have been able to pay everything back in about a year. But I didn't curb my spending. I didn't make a budget. I was just trying to live my best life as I was 26 at this point and really didn't think much of my future. So I kept over spending on things I didn't need and kept putting more on my cards and I bought a bigger car. The thought was I am doing ok. I can make my monthly payments. Also why not go on some trips every year. It's ok I can use the balance on my credit cards I just paid down. So why pay extra when I can keep the same lifestyle? This went on for a couple years.

Now we are in 2018 and that good ol’ entrepreneurial spirit was still red hot and an itch needed to be scratched. I had learned about Crypto mining and it seemed really easy. I was thinking about building my first computer anyways so why not over-spec it ,and it can mine while i'm not using it? So that's just what I did. I also started Streaming at that time cause it seemed like fun and well I had the computer to do it, so I did. I bought a couple of GTX 1080 TI's from a youtuber that did crypto mining. I put them both in my system and let one mine while I gamed on the other and when I wasn't gaming they both mined. It was actually going really well. The first month I made a couple hundred dollars after my electric costs. This was all I needed to tell myself ok, now is the time to scale before these components get too expensive. 

Over the next couple months I went from 2 GPU’s to around 30. I was making a couple hundred a day at one point. And instead of paying off the debt I kept spending on crap I didn't need. Also that couple hundred a day was literally for about 2 days. That is when the coin I mined fork split and the difficulty more than doubled. This is also when Crypto took a big dive.  So I went from around $200 a day to about $20. And I was burning almost $20 in electricity so I wasn't even really breaking even, I had to sell all the coins I mined to pay for the electricity. So once again I had scaled too fast and ended up having to sell my assets to try and get back to 0, even though I was never at 0, I was negative. 

To fund all of this I opened more Credit cards and once again I was able to make the minimums but I wasn't making any headway as the overhead just for the electricity was more than I could handle so I had a second job to basically just help with the electricity. At this point I was at my lowest and I vowed I would not get into deeper debt to start another business.  But that didn't stop me from going into more debt to try and go on 1,2,3 trips a year to get out of my place and try to have fun.

By the time 2020 rolls around I am about 15K in credit card debt and another 5/$-6K in personal loan debt. I am working 2 jobs and I am literally paycheck to paycheck. I am 30 years old and I was still not budgeting and still going on a trip or 2 a year at around $1500 a trip on average. I finally got to the point where I could not keep this horrible mess to myself anymore and I told my family about my situation. They were not shocked but definitely disappointed as I never let anyone know how bad my situation had gotten and they would have been more than happy to help. 

I spoke with my family and we started to create a budget for me. I started to make a little headway and in June of 2020 I was laid off due to the pandemic. I did get a good severance of around 4 months worth of my pay and some tools to help me find another job. My immediate thought was that I can pay off a bunch of this debt and with the supplemental income thanks to the covid relief I should be able to at least pay my rent. But it turned out that it wouldn't have been enough so I held onto my severance and changed to doing the minimums again.

During this time I moved back closer to home and I got a fully remote job so I was able to continue to at least make my minimum payments. But also during this time I lost my grandmother. Her health deteriorated very quickly once everything went into full shut down and she never recovered. This as I mentioned in my early post was the heavy price I had to pay to get out of debt this first time. She left all the grandkids and her children a good amount of money. I was able to pay off my debts and with my current job I was able to actually start really saving for retirement and even save to buy a house.

If you have read my earlier post you will know what happened after this. If you haven't, please give it a read here,  and you will get up to date on my current situation. I will be doing monthly updates on my spending and thoughts on what I did right and what I did wrong and how I can improve.

Thank you for reading and if you have any thoughts or comments please leave them below!