If It's Broke, Rebuild It

If It's Broke, Rebuild It Posted: 10 Feb 2009 09:57 AM CST I've been reading a book titled"They Went Broke?! -- Bankruptcies and Money Disasters of the Rich and Famous," written by bankruptcy attorney Roland Gary Jones. I share some of the money lessons we can learn from this book in the March issue of the Income for Life Members-Only Newsletter (Not yet a member? Click here), and some are obvious. Many rich and famous people have proven good at spending money on wasteful things, trusting incompetent or dishonest people with their finances and/or getting into trouble with the IRS or the legal system. All of which can make money evaporate quickly, even if you have a lot of it. But there was another commonality among some of the big names in the book that can't be overlooked. Those big names include Conrad Hilton, James Cash "J.C." Penney, R.H. Macy, H.J. Heinz, Henry Ford and Walt Disney, among others. Can you guess what they all had in common? Each was able to build wealth AFTER going broke at least once. I read a quote once, and I don't remember where I read it or who said it, but it went: "If the government took all of the money away from the wealthy people in the world and redistributed it to the poor people, the wealthy people would have all of the money back within a few short years." True wealth-builders can do it more than once, and some have had to. Those who learn from their mistakes, self-correct, re-commit themselves and see opportunities can re-build what has been broken down. They do more. They do things differently. They recover. The lesson seems relevant these days – I'm sure more than a few people have seen their home's value drop, or, even more probably, seen reduction in job income or the value of their 401k plummet. People will deal with these realities differently. Some will do nothing, complaining that their IRA lost 40 percent of its value, but not taking any steps to recover from it. But others will put themselves into motion the way true wealth-builders do, even after a big defeat. You can bank on it (no pun intended) – their WILL be fortunes made after this recession. There will be a category made up of folks who will figure out what to do differently, re-commit themselves and earn that money back. If you have suffered a financial setback in this economy, which of these two categories will you put yourself in?