How Do You Recover from a Financial Nightmare?
The other night, I took my boy to the cinema to see the new film — Ford v Ferrari. It’s based on the true story of Ford’s remarkable victory over Ferrari at the ‘24 Hours of Le Mans’ race in France in 1966.
This is a film that straps you in the seat. It blasts you through the high-stakes world of motor racing and car design. But, most of all, it inspires you through the characters.
Finance intersects every life. And it’s no different for fearless driver and car enthusiast Ken Miles (Christian Bale).
He’s a battler. Competing on the amateur circuit and running a small mechanics workshop. Fighting the incessant rules and bureaucracy, on and off the track.
At age 45, the IRS closes up his garage due to unpaid taxes. He’s out of money. His wife Mollie can’t work any more hours. They have their son Peter to look after.
The family is on a financial precipice until old racing friend Carroll Shelby (Matt Damon) comes by.
He has a daring proposition: come help him to build and race a car to beat Ferrari’s stranglehold at Le Mans. Paid for by the Ford Motor Company.
‘They’ve offered me $200 a day,’ Miles tells his wife. A decent sum in the 1960s. Enough to rescue the family from bankruptcy.
So Miles is rescued from a financial nightmare by a wonderful opportunity. That opportunity found him because he’d spent his life preparing for it. He’d never stopped following his passion for cars.
At some point in life, you may find yourself on a financial precipice
Perhaps you’ve already been there. Sometimes it’s due to a mistake. But often it’s just bad luck. Outside of your control.
I’ve only come close to it once. I bought a leaky apartment. And for several months of hell, my life became a nightmare. Dealing with other owners in the development — either looking to get their problem fixed or trying to avoid the thunderstorm of bills.
And when you’re in that sort of situation, you feel tapped. You notice those around you planning trips. Spending their money. Enjoying life. And you envy their freedom. Freedom from the worries that have taken root in your mind.
Unlike Ken Miles, I didn’t have the rescue of a lucky opportunity come my way.
I drank too much wine. And when I complained to locals at the pub about the crazy real-estate situation, they quipped that at least I got something out of it with the wine.
Many people find themselves in difficult situations. Often through no fault of their own.
If you’ve ever faced hardship or loss, I feel for you. I know what it’s like.
What you can do to overcome your struggle
When I was in university, I read an inspiring book — Man’s Search for Meaning by Viktor Frankl.
Frankl, a psychiatrist by training, spent years as a prisoner in a Nazi concentration camp. Somehow he survived the harrowing ordeal. He lived to tell his story and what he noticed.
Thankfully, few of us will get tested through this sort of suffering. But what is interesting is Frankl’s study of those who survived. Most had something to live for beyond the terrible situation around them. In his case, he had a book to write. Others had relationships to rekindle. Or dreams to pursue.
Frankl had this to say on the human spirit:
‘Everything can be taken from a man or a woman but one thing: the last of human freedoms to choose one’s attitude in any given set of circumstances, to choose one’s own way.’
His message is that any situation can be improved by taking positive action.
And when facing financial worries, this can help.
With our apartment situation I became a man on a mission. I understood in detail the repair the building needed. The costs of it. And I prepared detailed information for prospective buyers on the opportunity. It sold at a fair price. We moved on.
You need a financial plan
In a difficult financial situation, the best thing you can do is to formulate a plan. Get all the advice you can. Find a way through. And have a purpose for your future.
In a way, Ken Miles in Ford v Ferrari did have a plan. He had unfinished business — to be the best race-car driver.
Sometimes people tell me, ‘It’s too late. I’m too old. I have no time to build up my capital again.’
Know this: money has no prejudice. It pays no heed to your age, race or gender. If you can find value, or offer value, money will be just fine flowing back your way.
Understanding value does, however, come with age and experience. Warren Buffett made 99% of his fortune after the age of 52.
As I write this, I know people in their golden years building share portfolios. Focusing on growth and income opportunities that match their goals.
Of course, it is not easy to learn how to invest. The future is uncertain. Life will always have its setbacks.
But by identifying the problem, finding solutions and developing a plan, you may just get through and win the race.
Ford can beat Ferrari.