Imagine that for some reason you lose everything you have. That you have no one to turn to. Things get complicated and you stop paying your bills. Your property is seized. How would you get urgent money if you see yourself in a borderline situation?
Things don’t have to be so dramatic. But as a friend of mine said in another context, life goes around a lot. And so it is, today things are one way, but tomorrow who knows.
You may have everything under control today and at least in a matter of money, you are doing well. But things can be twisted. Having a financial culture is not only knowing how to invest and managing savings, but it is also knowing how to borrow loans without property to get out of trouble. And of course, I don’t talk about doing anything illegal to get it.
It is about knowing the resources that exist in the market to get immediate money and solve a situation of need or for which you do not want to give account to other people and prefer to solve on your own. I’ll tell you a story.
Surely at some time in your life, you have been in a situation that you do not know very well how you have arrived, but it has become too complicated.
It is the impulsive decisions and the shortcuts of our mind, which sometimes lead us to seek quick answers to the questions that are raised.
Have you ever seen the movie directed by Martin Scorsese, Jo, what a night! Yes, you haven’t done it, I recommend it. It is an example of what things can entangle in a short time. What happens is that reality, many times, surpasses fiction.
And if not to tell someone who for example we will call Juan, who had his life resolved, was seen in a very short time on the street.
Juan lived in a small dormitory town, in a single-family house with a garden, with his wife and two children. He and his wife had a good job and were in a comfortable position. They had a mortgage on the house, but they had a saved amount similar to that of the debt.
Juan liked to follow the markets, but he almost never decided to launch with his investments. One day booking flights and hotels a month before your vacation, he thought that if he made a good investment with what they had saved, he would have all the expenses covered. And he began to look at the financial news and the most profitable funds.
He noticed that an American technological fund had been gaining double-digit returns in the last three years and that some months had even risen 10%. He thought that if he invested a significant amount of the money they had saved in that fund and only with half of what had risen some of those good months, they would have paid vacations. He was spinning, but in the end, he did nothing.
The day before he went on a trip, it occurred to him to look at how that fund had gone that month. It had risen by 14.5%! Amazing. If he had decided, with the earnings he would have had enough money to pay three times what the vacation cost him.
With the thorn nailed by the decision not taken, he went on a trip with the family for a few days to the beach. The last days when he had to pay the hotel bill and after making a brief balance of expenses, he could not resist.
Without his wife knowing, he called the bank and put all the savings in that fund he had been following for a long time. He thought that with a third of what he had uploaded weeks ago, he would have to cover all these expenses and could surprise his wife.
However, something happened that I did not expect and that had not happened for months. When I got back home, the markets began to fall sharply. The tech bubble had burst. In just one week the losses were 20%.
In disbelief, he told himself that the market would surely have overreacted and that it would be a matter of days for the bags and the fund to turn around. So he called the bank again and had a credit account they had for emergencies, which accounted for half of their savings. And he multiplied his bet in the fund by subscribing again.
Unfortunately, Juan saw a few days as the losses reached 35%. I was desperate. Now he thought he was wrong and panicked, he thought that if he kept that fund, who knows, he could lose everything. So he sold the entire position assuming the losses.
The following week, the market rebounded, scoring the technological fund, an increase of 11%. Juan was pulling his hair. Since he had done the operations in secret and did not want his wife to discover how clumsy he had been with his investments, he decided to move the token to recover what was lost before he found out.
So he looked at internet forums and decided to invest in small capitalization companies with high potential for revaluation. Every operation he did, only made the problem bigger. Entering a spiral of ruinous purchases in which he always ended up caught. In a short time, he lost 90% of the savings discounting investments on credit.
Juan worried, he began to lose his sleep and be absent from work to continue his investments and try to solve the losses. Finally, his wife discovered everything. They had a strong discussion and asked for a divorce.
Between the mortgage and the alimony, Juan had almost no food to eat. He began to borrow money from his family and his friends. While sneaking around with your investments looking for a stroke of luck that changed everything. This time with futures, as he had read a book by Aitor Zarate, who assured that with the discipline he could become a millionaire in a short time. And maybe that way he would recover the credibility between his surroundings and family, being able to pay all his debts.
Between sleepless nights and being so aware of his disastrous investments, he ended up seriously disregarding his obligations at work. So they ended up saying goodbye to the company.
Soon Juan became seriously ill. He suffered from a medical condition that required diagnostic tests, for which social security gave him a waiting list of more than four months as a preferred patient. If he had been able to get urgent money to pay for the test privately, they would have detected him in time, which eventually ended up being lethal to his life.
The story is based on real events. The name and some details of the facts have been changed, but the reality was equally dramatic. As I said so bad is not knowing how to invest your money, how to know how to ask for quick money and help when you need it.