>You cannot possibly be a credible entrepreneur with such a negligent, even reckless attitude towards money
As far as I can tell, having a little bit of recklessness is /required/ - I mean, when you start a funded startup, you go in with a 9 out of 10 chance of corporate bankruptcy; and that's not even your own money. If you personally co-sign anything big, you have a pretty good chance of personal bankruptcy. (and if you are a bootstrapper, in most industries, you won't be able to get very far without personally co-signing anything.)
I think the biggest difference between myself and my peers who have chosen the employee path is that I have more risk tolerance. I am comparatively reckless. I mean, what else can you call it when you turn down a very comfortable living as an Engineer at a large company for a small chance of making your marginal dollar worth, ah, very little?
I mean, I'm bootstrapped, and fortunately was able to pay off my mistakes that caused big debt without bankruptcy, mostly because I am able to charge reasonable rates as a contractor, but this willingness to risk financial ruin is absolutely /essential/ if you want to run a small company.
But, you say, most debt incurred as a entrepreneur can be dealt with through bankruptcy! Which is true... most. but if you screw up your taxes? It's pretty easy to get a low-margin, high revenue business going. If the IRS disagrees about what constitutes a profit, you can get in deep trouble rather quickly. Tax law is subtle and complex; it's not like most things in business or technology where you can try it and see what sticks; with taxes, you pay what you think you owe, then a few years later, maybe the IRS checks up on you, and maybe they don't. Maybe they agree with your calculations of what you owe... and maybe they don't.
I mean, personally, I have a professional handle as much of that as possible, just 'cause I see this as the largest downside risk to my future financial state. (The idea of becoming destitute, of having no money doesn't really scare me that much. I've been there before, and while I try to avoid that state, it's not terrifying. The idea of having tens or hundreds of thousands of dollars in debt and no resources? /that/ frightens me.)
I mean, right now I'm largely debt free, but if some disaster brought my business to a halt tomorrow? I'd have about $50K in data center leases I'm personally on the hook for, and at least that much in customer pre-payments. (on the other hand, my hardware would pay for that if I could get a good price for it, but usually desperate sellers get desperate prices.)
Now, sure, the op needs to be more careful. And maybe the OP isn't careful enough to be an entrepreneur? I mean, obviously, there is a level of carelessness that goes beyond "risk tolerance" and starts becoming harmful.
My point is just that /if/ you want to be an entrepreneur, you risk taking on this kind of debit and worse.
When I had my own debt issues (which were largely caused by me signing long leases for resources I'd only need if the product took off, then the product failed miserably. Big mistake) I ended up contracting myself out and running the business sort of in 'degraded mode' - while paying down the debt. It's still an open question if it would have been better for me to close up shop and declare corporate and personal bankruptcy, but it's a moot point now.
I think the most important bit of advice for the OP is to /do something/ about the debt. Talk to a professional in the area, perhaps? But yeah, just ignoring the problem is often the worst choice. On the other hand, the people I know who lost their shirts in entrepreneurship; who ended up with huge debits (relative to their earning power) to the IRS? they largely ended up ignoring the problem, and ended up just not having credit or significant assets ever. I mean, even the IRS isn't going to prevent you from eating, and it's quite possible to live a college student level lifestyle without credit at all.
I would bet money that Entrepreneurs have much higher median levels of debit compared to people with similar skillsets working for other people.
As far as I can tell, having a little bit of recklessness is /required/ - I mean, when you start a funded startup, you go in with a 9 out of 10 chance of corporate bankruptcy; and that's not even your own money. If you personally co-sign anything big, you have a pretty good chance of personal bankruptcy. (and if you are a bootstrapper, in most industries, you won't be able to get very far without personally co-signing anything.)
I think the biggest difference between myself and my peers who have chosen the employee path is that I have more risk tolerance. I am comparatively reckless. I mean, what else can you call it when you turn down a very comfortable living as an Engineer at a large company for a small chance of making your marginal dollar worth, ah, very little?
I mean, I'm bootstrapped, and fortunately was able to pay off my mistakes that caused big debt without bankruptcy, mostly because I am able to charge reasonable rates as a contractor, but this willingness to risk financial ruin is absolutely /essential/ if you want to run a small company.
But, you say, most debt incurred as a entrepreneur can be dealt with through bankruptcy! Which is true... most. but if you screw up your taxes? It's pretty easy to get a low-margin, high revenue business going. If the IRS disagrees about what constitutes a profit, you can get in deep trouble rather quickly. Tax law is subtle and complex; it's not like most things in business or technology where you can try it and see what sticks; with taxes, you pay what you think you owe, then a few years later, maybe the IRS checks up on you, and maybe they don't. Maybe they agree with your calculations of what you owe... and maybe they don't.
I mean, personally, I have a professional handle as much of that as possible, just 'cause I see this as the largest downside risk to my future financial state. (The idea of becoming destitute, of having no money doesn't really scare me that much. I've been there before, and while I try to avoid that state, it's not terrifying. The idea of having tens or hundreds of thousands of dollars in debt and no resources? /that/ frightens me.)
I mean, right now I'm largely debt free, but if some disaster brought my business to a halt tomorrow? I'd have about $50K in data center leases I'm personally on the hook for, and at least that much in customer pre-payments. (on the other hand, my hardware would pay for that if I could get a good price for it, but usually desperate sellers get desperate prices.)
Now, sure, the op needs to be more careful. And maybe the OP isn't careful enough to be an entrepreneur? I mean, obviously, there is a level of carelessness that goes beyond "risk tolerance" and starts becoming harmful.
My point is just that /if/ you want to be an entrepreneur, you risk taking on this kind of debit and worse.
When I had my own debt issues (which were largely caused by me signing long leases for resources I'd only need if the product took off, then the product failed miserably. Big mistake) I ended up contracting myself out and running the business sort of in 'degraded mode' - while paying down the debt. It's still an open question if it would have been better for me to close up shop and declare corporate and personal bankruptcy, but it's a moot point now.
I think the most important bit of advice for the OP is to /do something/ about the debt. Talk to a professional in the area, perhaps? But yeah, just ignoring the problem is often the worst choice. On the other hand, the people I know who lost their shirts in entrepreneurship; who ended up with huge debits (relative to their earning power) to the IRS? they largely ended up ignoring the problem, and ended up just not having credit or significant assets ever. I mean, even the IRS isn't going to prevent you from eating, and it's quite possible to live a college student level lifestyle without credit at all.
I would bet money that Entrepreneurs have much higher median levels of debit compared to people with similar skillsets working for other people.