"Jit, my business has a bad debt of Rs30 lakhs. What should I do?"
"I really don't have time for my family. My last customer often leaves late at night, why can't my wife understand me?"
"I need Rs4000 to pay fees, today is the last day to submit. Can you help me?"
Honestly, I don't have a solution to their problems.
I have had similar problems before.
When this kind of problem happens, you can only manage it. Moreover, you can't solve it! or you can get a temporary solution.
For me, besides managing the problem, I chose to prevent these problems from happening to me again!
So, what is the best way to resolve a problem?
To me, the best way is not to let that problem happen at all. As I was in the healthcare field, I knew this saying. And I'm sure you have heard the saying,
"Prevention is better than cure"
Most people have heard of it, but they don't practice it.
Let me give you some examples of how I prevent problems.
Example 1
When I was running the wholesale business, most of the payment terms were 30 days term, which meant retailers would pay me after 30 days. But some retailers don't pay or delay their payments. For better relationships, I often continued to supply to them.
The end result is, I accumulated a bad debt of Rs20 lakhs.
I still remember one of the retailers agreed to pay me Rs1000 a month, for the Rs30 thousand that he owed me.
I had to travel all the way to his shop, 20 minutes drive away, to collect it.
I did that for a few months and eventually gave up.
Yes, I can read books about how to manage bad debt.
But what's the point?
My goal was to achieve time and financial freedom.
Collecting bad debt, no matter how effective the method can be, was not something I wanted to handle.
My solution?
I wind up the wholesale business together so that I would not have to handle bad debt at all. And started working online.
Example 2.
I have had a financial crisis before.
In my worst time, I had to surrender an insurance policy prematurely to take back Rs90 thousand, so that I could use the money to pay bills.
How do NOT get myself into a financial crisis again?
I saved and built a reserve.
I now have a reserve equivalent to 2 years of my expenses. This means if Touchwood all my income stops, I can still pay my bills for two years.
I reckon 2 years should be enough for me to restart from the ground.
Another thing I did to prevent myself from getting into a financial crisis is to have income from different sources. It is highly unlikely that all my income will stop at the same time.
I may sound like a coward but I'm happy with this 'chicken-out' mentality.
As much as possible, I will put myself in a position where I can avoid potential problems so that I only have to focus my time and energy on creation and progress.
To your success,