DFW Rockstars

Dec 14, 2020

5. Avoiding Debt Like the COVID Plague

Justin Shelley My concept when I started this podcast, DFW Rockstars, is around two things: I think all of us, every human on the planet, they have something to offer me. They're smarter than me at something. They have an experience that I can learn from. I believe that about everybody on the planet. So I'm a big believer in community and relationships and leveraging each other's experience. All right. So that's, that's one. Richard Gibson I would love to see that one, right? Yeah. Justin Shelley There's nobody that I know that came up with a business plan executed on it and went right where they projected, they were going to go. Richard Gibson No, everyone falls. They fall a lot. And hopefully if you fall on your face, you're at least going the right direction. It's when you fall on your rump and don't get back up, but you got to learn to get back up. And I think that's part of what you're helping do here is finding people to help you get back up and keep going, because you can't win every time in every business idea. Right. You know, you know, I hate to use baseball as an analogy to use it, but would you rather have someone that gets on base every time they get to bat or someone that hits a home run, you know, 20% of the time, which batting 200 for home runs is an amazing, right? Yeah. That's amazing. So would you rather have someone that gets on first, every time at bat batting a thousand to get on first or batting, you know, 200 to get a home run? Justin Shelley I mean, we want to, we want to get there every time, right? Richard Gibson: I think so. Yeah. You guys, that gives you, you know, cause that's the strategy you want to do and because you can't have every business ideas, a home run. Justin Shelley: And not only that, but the execution's never going to be perfect. The forethought, the strategy that you thought was going to work isn't I mean, hell who saw COVID coming, right? Let's beat this dead horse. Richard Gibson: Well, there are a few people that have been saying we were due another pandemic. They didn't see COVID itself, but they saw a pandemic coming true, you know, but you know it, but it's going to be like every other pandemic is going to circle the globe at least two times. Right. You know? And, and that's what we're going through as the second one we've been able to, as they say, flatten the curve, but at what cost. Justin Shelley: Yeah. Ooh. Now you're going to get me fired up. Richard Gibson: Well, yeah, me too. Justin Shelley: Cause that's not what we're here to talk about today, but that is my Oh, nothing gets me lit more than that. What the CDC refers to as excess deaths, suicide rates, you know, all this stuff that we're not even talking about. As we try to control something that is largely uncontrolled. Richard Gibson: Oh yeah. All's we're doing is mitigating. Justin Shelley: Right. Which is fine and mitigate away, but at the cost of what we've got to do a cost benefit analysis. And, and so few people do that. Richard Gibson: I'm not a real political guy, but poor governor Abbott. Yeah. I mean, try to make rules for a state this size. I mean, what's good for DFW metroplex. Doesn't work for Alpine, Texas. Doesn't work for Tyler, Texas. And so, you know, what he's doing is giving guidelines to the local ones to try to make the decisions. But then you have the problem, like when this was early on, you know, like you have a city, like Plato decides they're closing everything down and then the city right. North of, at Frisco, this is all we're not closing anything down. All right. And so I think that's where governor Abbott did actually an excellent job of saying, okay, here's the criteria. So like now with the hospital beds utilization over a seven day, rolling average being above 15% for COVID patients, we have to roll back. The, okay. That actually made sense to me, but going to zero and closing everything down, I really feel for people that had to, you know, suffer through all that. Justin Shelley: Well, and you and I are fortunate enough to be an industry that didn't get just shut off. Richard Gibson We didn't get shut off, but it Affected us back in april. Richard Gibson You know, I'm seeing it is like the faucet turned off. I don't know. Justin Shelley No. Cause that was right at your primary tax time. That's the primary tax preparation man. Richard Gibson: Government moved that late July to July. Um, okay. That's all right. That'll be good. That's nice. Oh wait, are these people are going to come in? Are they not going to come in? I just don't know what's going to happen. Justin Shelley: I had not contemplated that. Richard Gibson: It's just, you know, little regulatory change changes, everything you plan and budgeted for. And so it was like, you know, we're sitting here with the complete unknown what's going to happen. And then you've got people sitting at home saying, you know what? I think I'll start reading and figuring out how to do my own taxes and which was fine. But I had several people that said they started doing that. And that's why they came back. Justin Shelley: Absolutely. I played that game because it's like, yeah. Oh, have you read these instructions? This is why we pay people to do stuff. Exactly. Richard Gibson: You know, it's like, if you are comfortable doing it, then do it. It, it, it, there's nothing wrong with it. But if it's not something you are, have a propensity to do, don't. Justin Shelley: Agreed a hundred percent. So, on this subject, right. We're, we're dealing with globally, we're dealing with a challenge that very few people saw. There was, there was no plan in place. We're all scrambling. I was interviewing another gentleman a while back and they kind of said, well, this is really just normal. If you think about it, because business, like we said, there's no straight line to success. Everything about running a business is, or really life is about pivot. It's, it's taking your best guess acting on it. If, and when it doesn't go the way you plan, figuring out your next step. So, one of the things that I like to talk about on this show is the greatest pivot point you've dealt with the biggest challenge, the curve ball that was thrown at you, that knocked you off your rocker, um, that you, you had to get back up from. So, what was the point, if you could boil it down to the worst, the, you know, the, the most gut-wrenching challenge you had to deal with in the business world. Richard Gibson: All right. Well, I'd like to commend you on that. Great segue. Now that was, that was very good. Almost professional life. Now for me was the financial crisis of 2008 and 2009. I was, I don't want to say master of my universe then. Cause I thought I could do no wrong. Uh, I could go down to the bank, borrow a million dollars on my signature, go get another, do another business was no issue. Well then, that financial crisis came, and I learned how dangerous debt and leverage was. I've never been a big consumer debt guy. I've always thought, nah, I don't want consumer debt. I'll take business debt. I'll leverage it up so I can make more money. Well then, that financial crisis came in Texas. We weren't so bad, but then all the sudden the bank started calling my notes, due. Oh, Oh, Whoa. Uh, Oh, this line of credit that I was going to use to go through this slow time, they're going to say, “Oh, we must cancel that.” You can't do that. Um, okay. And so, I found myself all of a sudden in a position with a debt being so large and being called that I had, instead of being able to plan out over years of repaying this stuff days. Justin Shelley: So when, and this is a valid question and I'll show you my ignorance when it comes to finances. When the bank calls a loan, they're asking you to repay at a hundred percent, right then? Richard Gibson Within well with mine, it was within 30 days. Justin Shelley: And they can do that even though that wasn't t…

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