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#AskLeo - What was your biggest financial loss?

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@alexvan
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Hi,

for today's #askleo, the # tag introduced by my friend, @acesontop, I want to ask you a different type of questions.

For me, life is filled with ups and downs, and every time we fell, we shall try to stand up.

As falls happen, which was your biggest financial loss? I'm curious to see how you dealt with it, and if you managed to recover from it, and how did you recover.

I think this is the toughest questions I ever asked.

As usual, I will start with myself, as this is fair.

Since young, I was purchasing different methods of earning money and have been trying different business. As it goes, I had some failures that forced me to go to employment, which I'm not a big fan of. Yes, it gives some kind of false stability, but it has the danger to please oneself with less, without taking the risks in account.

14 years ago, I was running a business, was employed, and I did start another business, the second in parallel. This one, was supposed to be the hit. It scaled quickly, where my partner and I managed to reach 32 employees in 2 months and demand was rising. We had an engineering service, where we either leased personnel to bigger firms that needed engineers, and we had our own in-house development for different companies.

It started amazing, and the sky was the only limit. Well, in 2008 the big financial crisis hit, and we lost projects one after the other due to budget cuts at our customer. Suing them was pointless as they called a force majeure, and we could not do a thing.

Well, a thing was needed, paying the employees for the next 3 months as they had 3 months notice. We are talking about the EU, where labour laws are made for the employee. 32 people at Western Europe salaries, meant 6 figures a month and this for 3 months. Luckily we managed to cover the first two months from our savings, but the last month hit us hard, and we got rekt. 6 figures in debt with a lousy job and a second business that was somehow affected by the crisis.

What to do? I sold the business that was still there, needed to have the cash infusion to close the most urgent debts, and for the rest I borrowed money which was paid back in 10 years. It was a very expensive lesson and on my next business I will build a 6 months reserve, even if it might sound stupid to block such high amount of money. I've figured out that I play it safer now, with a lot more analysis, which helped me to avoid some major mistakes. A 6 figures hit is a very high one, but you can always recover, at least this happened to me.

So, what was your biggest financial loss?

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