$132,845 of INSANE Credit Card Debt | Financial Audit

my name is Jason I'm 40 years old from. Baton Rouge Louisiana and this is. financial audit so what do you do for a. living I own a security franchise well. multiple security franchises oh so okay. how many how many franchises uh eight. technically all those only six are. active okay what happened to the other. two we just haven't launched them yet oh. wow are these brick and mortar what kind. of security is this uh it's physical. security Personnel so security guards. and Patrol Services that's sick how'd. you get into that uh my background was. military police and Marines in the Air.

Force I did six years each and um worked. for a couple years in Afghanistan as a. security contractor. and came home and found this franchise. business and uh started in 2013. that's. awesome how many people do you employ. about 150 I think damn okay yeah wow and. what is of the six that are active right. now what's what's your Revenue. on a yearly basis. uh well we we purchased two of them at. the beginning of this year.

um so last year's numbers were about 4.2. million uh but we're pacing this year to. do about seven and a half okay so how. much do you take from this not a lot I'm. on a sixty thousand dollar salary and. then I pull out about four thousand a. month for child support. so an extra four thousand dollars a. month on top of that yes and then. um just a little bit uh just some. personal expenses kind of run through.

the business so why are the margins so. like poo well right now there's a lot of. growth happening uh with the new. additions we're spending a lot of money. on travel uh and really in the last year. and a half really since covid we've been. investing a lot in overhead staff for. scalability so we we've probably got. about six or seven people in our. overhead staff Now versus two or three. yeah so that's true you mentioned travel. so this like. they'll travel to do this you know its. territories is the way this franchise.

system works and so six of them are in. Louisiana four active and we just bought. Little Rock and then a piece of Dallas. and so I'm actually moving to Dallas. um really in about a month yeah oh sick. wow how much does it cost to get as. someone who's very interested in the. business side of things I feel like I'd. love to get into the franchise and stuff. eventually uh once I fully balance my. portfolio of real estate versus stocks. which is heavily real estate right now. either way. what does it cost to get into it the. franchise fees gone up they charged uh. they charge based on um.

the population you purchase or the. territory and it's it's like when I. bought it was like 35 cents per capita. now it's a dollar yeah they just went up. on April 1st and so uh and you got to. buy a minimum of a hundred thousand so. my going in was 35. 000. so in in the Austin area this Metro. is 2.5 but if you bought the City of. Austin which was weird boundaries of. about a million it's a million dollars. yes but if but typically people aren't. buying that much they're buying a small.

chapter of it right so so Houston has. like six franchises maybe and so people. have like their own little portion of it. uh and it what it does is it keeps. people from biting off more than they. can chew because a lot of times people. are sitting on too big a territory and. and not able to really service it to the. coolest extent so they're not growing as. much and so they're they're interested. in the franchisor is to really. capitalize on that market by having. multiple franchisees unless someone's. able to scale right. so of this 7 million that might be.

coming in again you're only going to be. walking away with six thousand plus an. extra four a month for sure. not exactly I mean there's there's some. personal expenses intermingling a bit. like my vehicles and insurance and gas. that's paid for in the business uh you. know different things like eating out. you know a lot of that stuff I put in. the business that's where some of my. excess spending probably comes in a. little bit. um but that's also temporary so I've. been at this 10 years now and it is. frustrating to be still doing it and. still kind of having a hard time but. yeah we're also you know we've done some.

territory expansions along the way. um we've had we've basically reinvesting. in the business a lot so I have a. business partner he and I have basically. said in the next two years we really. want to see some cash coming out for. ourselves and so we're we're kind of on. the right track for that and we're. thinking we're going to start seeing. some of those wind balls is everything. delegation at this point do you do any. Security on your own uh rarely uh. usually one-off things. um something maybe that might be. interesting like some something that. I've done some travel work this year. that uh was one office not an ordinarily.

stuff we I probably would have turned it. away otherwise but it was interesting. enough so I took the job like one was. driving to New York overnight my. business partner and I did that we. didn't want to task our people for it it. was just an interesting thing yeah. um it was grueling but it was just a. change of pace getting out of the office. and doing something so what are we. charging for security. [Music]. anywhere from I think our lowest is like. 24 25 an hour to uh up to. I think we have Summit like 40 an hour.

35 40 an hour for the dedicated work for. the patrols uh we charge it's by the. visit not really by the hour so it's a. it's a little different there. um and so we'll go to different type of. businesses and we can do spot checks. throughout the night so we're just. charging for those and so my smallest. customers are like 500 a month my. biggest are about 25 to 3 000 a month. there and the markets you're in how's. the competition how like easy has this. been for you versus just difficult to. you know capture market share.

each market is so uniquely different. that we're in. um even in the markets in Louisiana one. to the next even though they're an hour. apart are very very different uh and so. it's kind of an adjustment each one and. we're now bringing on the new markets. those are new adjustments. um you know some markets we have zero. competition uh other markets have got a. lot uh like New Orleans specifically has. a lot of competition but. um what about this Dallas one that. you're breaking into. um that one's still kind of new to us so. the Little Rock and Dallas that we.

purchased those already had about a. million of Revenue in them so uh we got. a good deal on those uh so we already. kind of have stuff going Little Rock. there's almost no competition at all and. people are coming to us Dallas where. we're at in the northern part of Dallas. Denton Frisco McKinney. um it's still kind of new to us and. there's a lot of newer development there. so we're just kind of starting to get. our feet wet that one we just took over. March 1st so that's still we're still. kind of knee-deep in the operations. getting things settled there what is. your uh what is the company valued at.

and what's your Equity position within. that company. all right y'all we got to talk about. something important data Brokers are. making a fortune selling your private. data out and it goes to robocallers and. scammers and other people who want to. know more about you like where you live. but that's why I'm excited to talk about. today's sponsor Aura Aura can identify. data Brokers exposing your info and. submit opt out requests on your behalf. Brokers are legally required to remove. your info if you ask them to but they. make it super hard to do let Aura handle.

it for you you can try Aura free for two. weeks using my link in the description. below or by going to aura.com forward. slash Hammer Aura also does much more to. protect you and your family from online. threats you can't see it's really easy. to set up so you don't have to download. several different apps to get things. like parental controls antivirus VPN. password management identity theft. Insurance and more you get everything at. one affordable price let Aura do the. hard work of keeping you safe online so.

you can focus on the rest of life with. piece of mind you can either let people. continue to exploit and profit off your. private information or you can go to. aura.com forward slash Hammer so head. there and start your free two-week trial. or check out the link in the description. below. [Music]. good question I don't know the exact. answer uh if I had to guess I'd probably. say it's valued at. a million and a half to two and Equity. positions Maybe. on behalf of that so the business.

partner you have is it's like yeah yes. and no. um we operate it uh like one big company. but it's multiple entities so I started. my franchise first a few years later he. started his and then a few years later. we partnered up for a third franchise so. we kind of had to yours mine in ours and. then all this growth has been under the. partnership and so uh 2021 you know 2022. we really started running everything. like just one big business we just. sorted out on the back end of the books. so okay okay well that's a really good.

Baseline for just like what your life is. because it is definitely different. compared to most people on here in terms. of we've had a couple people that run. small independent businesses but this is. certainly I think the most interesting. we've had on that front when it comes to. your personal finances how would you. describe your personal finances today. and give yourself a score zero out of. ten uh one thing that and I should have. mentioned this earlier too with the. multiple entities is that um my original. franchise I purchased is the only one I. take an income out of that's another.

part of the district why is that on the. income. um neither of us are taking any profit. from the partnership uh it's just kind. of funding future growth and so. um it's just the one franchise the only. one my personal income comes out of. um and then same for him that's just how. we're structuring right now. um but that said. um I wouldn't say it's awesome by. comparison but I do kind of think of it. as I'm really investing in myself in my. own future this way uh long-term uh I. see a lot of prospects but the short. term the interim it's it's a bit.

harrowing sometimes it's tough it. stressful. um I did my hammer Financial score this. morning out of curiosity I looked at. your your categories and um I gave. myself a 1.4 out of 10. yes with all the setup that we've had. for nine minutes 30 seconds now it feels. like we should be much higher than a one. that try 10 years of it yeah so it's. been like this for 10 years okay so what. if you just found yourself in like.

overspending over debt like where have. you gotten into this position to be in. such a low score a lot of learning. um. so initially and this is kind of where. it's it's a bit skewed for me. um I started the business on credit. cards which I do not recommend it was. this particular funding program he said. oh it's unsecured I didn't find out. until after I gotten pre-approved and we. started the process they opened like 22. different credit cards. um and my name my entity my wife at the.

Time's name and an agency they set up. for her and then liquidated the funds so. I got 120 000 in cash off of credit. cards and so that's how I started the. business with zero income zero Capital. uh no fallback plan I came back from. Afghanistan and started the business. um on one hand that was the kick in the. pants that got me going because that. that 4 500 a month minimum monthly. payments was uh before anything else had. to be paid.

um but the other hand it was a long tail. you know getting that under I I look. back if I'd gotten a normal SBA loan. would I have grown at the level I grew. at the time I don't know so you didn't. have any money to try to attempt to cash. flow this thing I had no fallback yeah. and it was just a matter so I started it. I had to do my own sales do my own work. at night and just figure it out about. minimum monthly payment is more than. like half the country's income yeah it. was a lot yeah three months no six. months in I had uh six thousand a month. in recurring revenue and nine thousand a. month recurring bills it was very very. tough.

um so that was a hard thing to overcome. took me about six seven years to get. some progress on that geez. um and how many years ago was this that. was 2020 yeah 2020. 2020 yeah yeah the year three years ago. well if you want to start something that. doesn't require getting into that start. hitting that subscribe button because. we're trying to get the 500 000. subscribers and thank you to everyone. who subscribed so far sounds like you're. a subscriber so thank you thank you.

before I yell at you about any of this. stuff okay well I guess there's nowhere. better starting like a checking account. right. USAA we call this income checking that's. where my deposits go into my basically. my direct deposits or if I get a check. the deposit goes in there. was started with four Sons. it's it's like an envelope system so I. actually deplete that on the 10th and. the 25th of every month so it's a. hundred percent depleted every single. time there's like no wiggle room right.

so are there automatic withdrawals. um no okay I manually withdraw okay yeah. I was gonna say with automatic controls. that makes me scared so. 7768 uh 86 bucks came in now does that. include the money that comes in for. child support and then goes out as well. no I do that in a separate Bank you'll. see that first horizon uh account that. one is the account that I use for the. child support. so sixty thousand divided by twelve is. five thousand but we're having seven. thousand seven hundred eighty six.

dollars come in oh yes I had to. um there was a reimbursement. there was either a reimbursement on a I. had to use my personal card for a. business expense and I got it reimbursed. or. it was another issue so with the move. coming up. um not proud of this but I did ask my ex. if I could basically borrow against the. child support for a couple of months. um just to cover for some moving. expenses because I didn't have any extra. cash in my room in my uh budget so.

um basically I pay her 1900 bucks two. times a month I asked her if I could pay. her one time a month for two months and. then three times for the next two months. I think it's very important as one. business owner to another that I found. to minimize risk in general and allow. you to take those extra steps to get. into risk is to have almost like a year. emergency fund but you just haven't no. I've got almost no savings so why not a. conversation with the partner hey let's. just take a little bit out just so we. can have a safety net on our own end so.

we can take these extra times to just. continue reinvesting things well my. initial I actually did initially have a. conversation with him first about using. the business funds to pay for the move. because it was a business move uh from. for all intents and purposes. um but when we looked at the money. there's just not money in the business. to do that our money is so high or just. because you've just reinvested it fully. into like new all of that plus. um there's a in our franchise system. there's an invoice factoring that.

happens it's kind of built in where. we're borrowing against receivables to. make the the payments in the payroll and. stuff is this a good franchise it is in. the long term we're just really in a. hyper growth phase right now and that's. that's the other issue too I signed a. new contract and I'm fronting payroll. two three payrolls before that first. invoice gets paid right so like that. gets heavy so we just started some big. new contracts and some markets uh we've. got a Salesman that we're paying fat. commissions to and he's doing a great. job. he's getting fat commissions that should.

mean super duper fat. Monies to you yeah but that takes a good. six months for that cash flow to really. catch up and that's the problem as the. growth keeps going on that six months. gets pushed to nine months to a year. because we just keep compounding that. cash flow push so that's kind of. happening a lot right now okay so let's. see let's see what's up here. transferring things around transferring. things around transferring things around. and that's pretty much it I can explain.

the uh the income account is basically. just a flow through account yeah uh it's. from the book profit first it's kind of. the idea that I'm going from. um michaelowitz the um. the income account goes in and then the. 10th and the 25th I already have my. budget kind of pre-portioned. um for what to do what basically goes in. on the 10th what goes in on the 25th for. everything due until the next date uh. and so I do that there so that's when I. put the bills account is where all the. automatic withdrawals come through and. then the Opex account is just my.

personal budget it's like 150 bucks a. month is all I give myself there uh and. then if I'm lucky a couple hundred goes. into savings in a month cheers okay and. then USAA bills checking yeah that's the. bills account beginning balance four or. three is everything automatic. withdrawals on this or is anything. automatic withdrawals or is this all. manual uh almost all automatic. withdrawals. um. part of my budgeting issue not all of it. but a part of it is I'm I've got a lot. of spinning plates and work and stuff in.

my personal budget I had to put my bills. on auto pay just so I didn't have to be. late on them and I mean the money's. there but was that a common thing being. laid on your bills. um no no I'm almost never late on the. bills um but the problem was I'd be late. on maybe the transfer or something well. we did have advanced transfer overdraft. protection yeah of 1276 yeah so in. thankfully USAA doesn't charge a fee for. that but I do replace that into savings. whenever I do finally get to sit down. and do the transfers and so the month of.

March I was really behind on that and by. the time I sat down I realized oh man. like four payments have come through. already out of my savings account so my. savings is really just a buffer for that. more than anything else it's not really. a savings account and this looks like. just paying off things and paying for. things yeah in general not like we're. going around purchasing but we do have. like phone bills and utilities Planet. Fitness and maybe some enough of cards. yeah potentially okay. yeah cutting it close in here and then. we have that overdraft thing yeah uh.

another USA checking uh opx yeah that's. the Opex that's my just that's where I. that's the only account I have a debit. card to and that's what I'll use if I'm. you know stop at a gas station go to the. grocery store yeah Easy Mart yeah stuff. like that and gas station yeah I'm on. the road a lot so a lot of little small. snacks Burger King. but we don't have an emergency fund. do you think we should be going to. Chick-fil-A and Burger King in lavish. nails. for before having an emergency fund no.

and Macy's. no. I don't think we should so why are we. doing we got to get into the mindset oh. what are we doing we shouldn't be doing. that well to me it's such a small dollar. amount on the grand scheme of it I mean. yeah but you don't have an emergency. fund right. um but the the 200 is essentially a. month that I give myself for that is not. changing anything for me whenever I look. at the the grand scale of it all when.

you look at it do you budget out. concretely. um not as not as sharply as I should but. that's what I transfer into that account. is about 200 okay and Insomnia Cookies. again well we don't have a checking. account yeah and five dollars went to. savings well we spent more than that. Insomnia Cookies and McDonald's and. Wendy's guess is okay we're good with. gas and we're driving you know gas is. okay this isn't a business account. though is it no uh there was some issues. with my fuel card at like for a week or.

something so I was having to use the. debit card for gas. Twin Peaks. I don't even know what the size there's. a restaurant with some common Taco Bell. and silly rabbit and McDonald's. fifty dollars from Savings in yeah so I. mean we don't have an emergency fund and. we're transferring from savings. so that we can go to McDonald's again. yeah. and ATM. rebate. three dollars came in okay well.

McDonald's and old New Orleans again I. really don't think we should be doing. this I think we get a cooler and we pack. sandwiches until we have an emergency. fund because it's safer for your. business and you being able to take. extra risks in different places if you. know you have something you can fall. back onto for a few months if the. business isn't making money or you need. to use the money that the business is. making to you know put somewhere else. and reinvest things like that USAA. Savings okay so we do have minimal 2. 252 start starting oh this gets worse.

but you put 1 546 or 49 and good but we. took out two thousand five hundred. dollars ended with a thousand two. hundred eighty five so what's the. purpose of this or just losing it. well it was the overdraft thing yeah so. you're overspending on that account. right so a thousand dollars a thousand. two hundred dollars was sent over and. again you're transferring fifty dollars. hundred dollars hundred dollars fifty. dollars fifty dollars hundred dollars. hundred seventy five dollars fifty five. hundred fifty dollars two hundred. dollars two hundred ten dollars into. your checking from savings what's the. point of the savings this isn't savings.

okay. yeah it's it's really just a backup pun. for me more than so than anything else. so is this your only savings then yes. that's really it okay so we don't have. an emergency fund don't have an. emergency we have a what if I. accidentally overspend on my McDonald's. debit card fund essentially. okay well. uh. do you think your personal life and your.

personal Monies. and the mentality behind it are. different than your business because I'd. be nervous to for you to be running. franchises if this is what the business. uh personal accounts look like. it's a fair question I don't know the. answer. um honestly right now. how much is sitting in. like a your overall business account. maybe there's different ones what do we. get it's not better. um that's dangerous maybe about payroll. maybe about three thousand yeah scary. well we we're borrowing against.

receivables on payroll each time uh. there's there's a dynamic at play that's. not awesome what's the dynamic uh so. it's it's. fine for a rainy day but it's not. awesome when you get stuck in it but. essentially the borrowing against. receivables what happens is all the. deposits from customers goes to the. franchisor they disperse the funds into. an account for each franchisee yeah so. we can borrow against our receivables. because essentially they own the. contracts right so so essentially they. are the factoring service for us well. until that account is zero I don't get.

that money so if I have to borrow for. payroll well I'm stuck on a negative. balance until it gets positive but if. the next payroll hits before it gets. positive I'm not there so we've been. using the stronger franchises to pay for. the newer ones and the expansions right. now and so it's kind of a carpet. launched across that's why there's not a. lot of money to pull out of the business. right now because that I don't like that. your whole thing is playing catch-up. yeah it sucks it really does instead of. buying new franchises have you ever. thought about you know taking six months. so you're ahead and then using what's.

ahead to open new franchises instead of. always playing catch-up that'd be. awesome. um well why was that not the choice the. growth doesn't come so quickly sometimes. uh some of the sales Cycles can take. several months and we only have so many. sales resources. um the the opportunities that we. purchased literally came to us we didn't. go out seeking them and when we looked. at the opportunities they were too good. to pass up we recognized we were going. to have to. have a tight belt for a short while but. we saw the long-term opportunity for it.

so. um we felt we would have regretted not. making the move. is this a credit card. USAA there is a USAA credit card. New Balance 10 952 but you only bring in. 60 000. minute oh my goodness okay so this is a. USAA credit card is this personal or. business this is personal all the credit. card statements well all but two of the. credit card statements or three I gave. you were personal. [Music].

for some things that we didn't clarify. so you do pay child support So how many. kids do you have I have four okay. a lot of kids yeah what are their ages. um 16 15 10 and 7. three of them just. had birthdays in March. happy birthday kids happy birthday. wow so 281 dollars in a monthly payments. let's see what happened here okay you. did a mineral multiple. oh those were credits okay no there it.

is again there there it is so you did. you did my least favorite thing in the. world you did my least favorite thing in. the world why if we're doing 287 hours. of purchases and you did have credits. maybe that was just like the Rewards or. refunds or something but why are we. possibly doing 210 of purchases on a car. we're trying to pay off I will never. understand that I will never understand. that. that card. um I don't keep it on my person uh I. mainly have it I have a couple things.

auto pay on it like Netflix. um no Hulu. get to your bills account so you know. [Music]. 971.91 in interest it. a credit. limit of a 11 600 you're basically there. with the previous balance luckily our. balance is down but barely at ten. thousand nine hundred fifty two dollars. and seventy two cents with available.

credit of 647. dude so what what is the logic behind. putting some things on here if you know. you have to pay for it what is the logic. so we can combat it it's it's simply. been I've not had any extra money to. make any progress on any of my cards. yeah but why are we spending money on it. they're just Auto pays that I haven't. switched over to the bills account in my. head I'm thinking that the the minimum. payments covering that although I know. better I know the minimum payment is not. covering that difference.

um and you're right I should switch it. over uh to the bills account oh. death so Cox bent and roach he has some. Google natural motion natural no that's. that's that games that's stupid. that's on me. that's. 54.11 you spent on games yeah five. dollars of Hulu 21 on Netflix and then. YouTube premium 22 dollars. oh so total 210 000 on the interest was.

basically almost the same total interest. charged in 2023 so far 520. 520 dude you're killing yourself with. this 18.4 interest that's the good card. you're unfortunately no yeah uh it's the. only one that I think has current. activity on it but it is uh it's the. better interest rate and uh of the. franchise that you take money out of. what how much could you actually take. out of if you wanted to pay yourself.

more what can you take out of it I don't. know right now why I don't know that. there is anything I can take out of it. right now more than the 60 or do you. mean 60 is too much uh no I think I need. to just stay where I'm at I want it for. now okay. let's move on synchrony Verizon. that's just uh I get a discount on my. bill if I auto pay on the Verizon credit. card and just pay it off in full each. month it's an auto pay you pay this. often for each month yeah okay because. it actually reads really weird so it's.

kind of hard to yeah it's like 200 bucks. a month for the cell phone bill. yeah but the New Balance but is it 200. bucks a month for the cell phone you're. doing 1900. oh that was the reimbursement I had to. use that card for something and I got it. reimbursed and got it paid back oh my. God yeah I just didn't get it before the. statement but yeah okay so normally it's. just a 200 yes yes that was a one-off. that was why I made a point to get that. reimbursed why'd you get into the USAA. debt to begin with. originally it was supposed to be I'll. get the points and pay it off in full.

each month and then I can put my auto. pay things on it and get the points and. that's fine that's what I thought it was. going to be and I want to put in some. purchases on it in 2022. uh 2022 was a. bit of a um Reckless spending year for. me and I'm paying for it now okay so. you've seen on some of my videos If you. say that if what you just said is true. what does that make you an idiot not a. credit card person not a credit card. person you're not a credit card person. no one has to be everyone wants I think. everyone who's interested in Personal. Finance in general wants to be a credit.

card person because you can finesse but. whatever possible benefits you get from. it you're losing 500 a month in interest. from one card so far and you've sent. more statements than anyone in the. history of the world so I don't even. know what else is ahead of us here but. I would just cut them up man. I'd cut them up you talked about uh. envelope systeming within there I would. fully do that within the checking. account because this is.

oh okay Banana Republic. all righty so I've never seen someone. get a banana a store card. to like this kind of balance what's up I. don't know I don't even remember what. the balance is. I guess I should tell you. four thousand seven hundred sixty four. dollars. that's not from the store I don't think. I think that's purchases I use elsewhere.

that'd be a lot of Banana Republic maybe. maybe not I don't know it's a Visa cards. I can use it elsewhere so it's just my. oldest card in my um credit history. that's the only reason I've kept it open. but. you should you made 153 dollars of. payments minimum payments now. 164 because balances the balances went. down like 30 bucks essentially with. interest charged it. charged. 17.55 okay. you know how positive I thought this.

episode was at the beginning that is. just flowing away from me immediately. oh because only the minimum monthly. payment which is all you're doing is. going to take 18 years to pay off with a. total of fourteen thousand seven hundred. nine dollars paid. fourteen thousand dollars of the four. thousand seven hundred sixty four. dollars you have oh and it's close to. maxed out I mean no. but you didn't make any purchases though. no I'm not really using that goodness.

gosh. so how long did it take you to rack up. those two debts 30 interest. most of that was end of 2021 into end of. 2022. into just last year yeah. what what a city double cash card of. which I love by the way there was a zero. dollar previous balance and a purchase. of a thousand six hundred forty six. dollars that one that one hurt I uh that. was my only paid off card I was trying. to keep it paid off but I had to put a.

deposit for the movers and uh there was. that's when we returned. no money and this is. a person because you use it and this is. why we have emergency funds. are you being talked into these things. by the business partner because I don't. know no no not at all no I appreciate. the ambition I appreciate it so much I. love it and you know I respect it in a. way but I'm so scared that you're.

overextending do you feel like you might. be overextending I've been overextended. for a long time yeah you're going into. credit card debt the challenge I'm. having the the the problem that's. difficult for me is because I've before. I even started the business on credit. cards I had already paid off 20 30 000. in credit card debt I got into 120 paid. that off so I'm holding 55 000 in. personal credit card debt now and it's. not as scary because I've done it before. that should be part of the challenge. that I'm facing is I don't really.

when did you do it before though where. was your income Source same with the. business well the very first time I was. working overseas and then the second. time was with the business okay so. working overseas military uh when I was. Contracting overseas when your. Contracting overseas was the income. better. um uh Cash Wise yes but not well overall. yeah it was it was 500 bucks a day but. it was like nine months out of the year. not not all. I'm worried of you getting out of the. situation now in this situation in this.

situation yeah. [Music]. 28 interest oh so I was gonna start. growing now. Delta Amex let's see. no new charges but oh my goodness no. dude. oh. now this is just making me starting to. feel bad. oh my gosh start a new balance of. freaking at a credit limit of 13 900. worth a new balance of Thirteen thousand.

three hundred thirty one dollars. they probably just lowered it I don't. think it was. oh my gosh. oh minimum monthly payment 427. oh and 60 cents is the minimal salary. that you're giving yourself first of all. are you sending money I I don't see it. are you sending money aside for taxes oh. no the taxes come out of my W-2 oh. you've w2'd yourself yeah okay yeah oh. thank gosh. oh my goodness. with interest.

freaking 297 a month and 26 Cents. oh. oh my gosh. dude that's insane 297 hours of Interest. oh. total interest this year so far. 869 dollars. oh the purchase oh my goodness some of. the purchases are 25 extra some are.

somewhere at 30 interest. oh. it's not awesome it's not awesome I. think that was uh understand how do. these balances get bigger every time I'm. going through these These are getting. bigger I got to the chase yeah. I just spit out of disgust. at this chase this Chase of death this. Chase of death of 24. 290 was this in the same period was all.

this within the same period were you. just opening credit cards over these. credit cards you already have I've. already had these ah chop them up dude. chop them up if you've gone out of it. and you got back in it again this makes. no sense there's no justification for. possibly keeping this would you pay that. would you would you cut them up yeah I. think you need to yeah I agree. oh. my goodness because what's the way even. more. 676 dollars in minimum monthly payments. with 4 33 dollars of Interest.

dude I'm I'm freaking out I'm getting. itches in places I don't get itches. normally this is crazy at least it's. only 20 only 20 percent. crazy. okay Bank of America please please be. okay please be okay no that's the. business ones now you're getting into. the business ones okay have I gone. through all the personal ones. I think so okay. so I uh. [Music]. is this for your personal franchises or.

your stakes in the franchises or is this. for the partnership is this a legal. partnership yeah yeah everything's legal. and is this. for the partnership for you so there are. I think I gave you three business credit. cards. um so I have one Bank of America that's. in my entity and one Chase Inc in my. entity and then there's another Chase. Inc from the other entity I think I gave. you all three and those are the only. cards that I keep in my wallet for. um incidental expenditures as they come. up so is this some of your this is where.

most of my crazy spending might be. really yeah. so it was ten thousand hours five. hundred ten thousand five hundred. dollars payments of three thousand. dollars I'm like let's make a progress. and a thousand two hundred twenty five. dollars of purchases with finance. charges of a hundred ninety seven. dollars. that one's difficult because some of the. purchases are unavoidable but some are. not and I sometimes have a hard time. distinguishing the two. instead of expanding it constantly where.

it is. cash flowing ahead of itself I agree. because right now you're just drowning. just always trying to always trying to. catch up always trying to get a little. bit ahead but you just can't the tunnel. just keeps extending itself so we have 8. 990 dollars. death of death with a stupid. 285 dollar minimum monthly payment.

oh. my goodness so interest of one nine. seven dollars a month. 48 dollars. because this is also going to just start. holding back your business yes. yeah yeah and it can if it doesn't get. control well it's hardly controlled it's. not being paid off and you're spending. double on what you're or half of what. you're paying off so we have Amazon or. Whataburger and dominoes and cleaners.

and Cinemark Cinemark's business and. Sonic. Scarlet scoop Whataburger. I at least eat burgers that are good. oh. Meat Market Airbnb could be a business. expense if you're traveling Amber's. Frozen Custard chill bar NTT online NTTA. online I don't know that is North Texas. Toll Authority uh you don't have to take.

the tolls they're just quicker to take. it was an accident that was me paying. back a toll that I didn't know about. that oh that probably had it was a 12. troll to turn into a forty four dollars. and Amazon and pizza and truck stop. so yeah we don't have to be doing that. when we have when we. I feel like this might be hard. to get into necessarily and can truly. convince but if we're in already stupid. amounts of death that wouldn't even we.

haven't even fully fully uncovered. everything yet do we need to be going to. Whataburger and Sonic and Cinemark and. all this crap do we need to be no how. have you packed food ever yeah the. challenge is sometimes especially this. year I've been on the road a ton with. the new franchises and like I left today. I'm not going to be home for the next. two weeks and so there's some flights. involved with that too so it's kind of. hard to pack for that much traveling and. so I'm I've stayed at Airbnb as cheap as. I can find and I've brought food with me.

to cook pasta and whatever I can cheap. at times but sometimes I I'm at a. business meeting and we got to go to. dinner and sometimes I feel like I need. to pick it up sometimes I'm with my kids. and they want to do something so I go. and spend money on that and I don't have. the cash in the budget for it I don't. have the emergency savings or any kind. of backup fund so it's just not an ideal. situation at least we can write off a. good amount but it would be much better. paying down the debt that's killing you. with so much interest chasing the. business. yes previous balance 24 000 new payments.

of seven thousand five hundred. dude it kills me every time you get me. you're my enemy you're doing the thing. that pisses me off and I'm getting. itches in places because of this six. thousand five hundred eighty four. dollars of purchases so that that that. card so the next two chasing cards that. Bank of America card is the only I'm the. only one that has a card to that one the. next two employees have cards to that. one oh so they know well I have managers. and places they need to fix a vehicle in. fact a flat tire pay for an oil change. we have vehicle repairs things come up.

uh they got to buy uniforms there's a. lot of expenses like that we pay for. Dropbox so I tried to give you the. transaction history for my card stuff. and kind of focus on that the rest is. just they're only using for legitimate. business expenses legitimate yes it's. just not me but cash flowing uh no not. really any of that just the original. franchise is that even cash flowing no. not really right now it's borrowing. against receivers. how long do you think until a cash flows.

I think another year you think yes. what's the difference between that and. the last 10. um well a lot of the expansion stuff the. uh the Little Rock purchase should be. paid off by next July. um and we got that at zero percent and. it's paid off against Revenue so it's. not like we had to come out of pocket. for it. um and then we have some big contracts. that come in for that that should really. start cash flow in that one. um but yeah over the next year all of. those things plus we're expecting a big.

tax refund to come in our way in the. next year so that's. part of the problem that I have is the. because I started this business without. a penny of my own personal funds I. didn't I never put a dollar into this. I've I've been able to cover everything. over the last 10 years without a penny. of my own personal money. it's like I'm playing with house money. it doesn't feel real like it is I know. it is but the fact is that initial. credit card loan while it was expensive. and hard to do my own Sweat Equity sure.

but it's at a point now where everything. pays for all that it's all paid for give. it all comes in 615 of interest on just. this card 200 on the previous card yeah. the challenge for me is that I don't. look at it as me losing that money. because I never had it to begin with. it's not like I've lost anything so with. a zero dollar investment I've grown a. business to this point so I can hang on. for a little while longer before I. finally start getting the cash flows out. of it I am someone who actually. appreciates leverage I'm okay with good. leverage what makes me nervous is it's.

not cash flowing I am over leveraged. right now I can definitely agree with. that and by the way burgers and Waffles. yeah well we are eating out can't tell. 100 what some of these are on those. cleaners. I think a lot again is a lot of those. business expenses that you're talking. about but it should be cash flowing into. it or else we're just not doing it. Subway and Amazon and Amazon. and then just a lot of other stuff that. probably is business but because we're. spending everything on here we're just. losing in all its interest yeah oh.

no seriously it literally just gets. bigger do you have two ink cards yeah. the other one is the other entity. yeah because this. one's got the biggest balance yeah this. pull of a card is at 45 144 you spent. more or the business spent a thousand. dollars more on here than it paid off. um. [Music]. oh it doesn't even matter I mean it does. it does it I'm just we're not paying.

minimums on that basically we pay just. to get us off the ceiling so we can keep. operating on that yeah you're paying to. survive yeah. 661 dollars of minimum monthly payments. it's just like at this point it's just. like I can I I can get the feeling. because I'm starting to get the feeling. of just oh do you feel overwhelmed on. this like just oh plenty of times yeah. because it's like oh my goodness what. it's gonna take Amazon. oh yeah business isn't Samsung Amazon.

Amazon lots of Amazon also Adobe stuff. on both accounts as well. uh but then also just yeah door Dash. come on. uh I don't use doordash that was. probably. um someone buying a meal for somebody at. work yeah Uber they should use their own. money if they're buying someone else a. meal. if ever use Uber is just because I'm. traveling somewhere I'd take a plane. I tried to mortgage you have a house. what were you gonna say I'm sorry uh I.

try to keep my personal expenses. moderate I don't feel like I'm too loud. I did way too much in 2022 and now like. I said I'm paying for it now but day to. day now I'm don't I don't doordash food. I don't take Uber in a lot of places I. there was a good amount you need to know. on your own stuff there's a decent. amount of it but it's not like. I think it's still under what most. people are doing in my head I guess but. if we're comparing ourselves to most. people most people absolutely suck yeah. so I was like.

yeah oh it's locked in at a good 2.3. percent love that so we're not going to. pay this off early no I'm keeping that. yeah a thousand. about 1500 500 14 bucks a month so again. for your take home how much you spending. on food and how much interest is. occurring on all these different things. uh. so that the house. um because I'm moving uh I have a tenant. for it they signed a two-year lease so. it's a two-year yeah so it's got I've. got a 1500 mortgage but I'm getting 2. 400 in rent good the place I found in.

Dallas is 2200 a month uh you're renting. okay for now. I can't I couldn't go to a bank and try. to get a house with my credit like this. right now anyway yeah. it depends on the situation the. situation but. just I mean with where you're at here. now I saw a couple extra statements that. were sent as well okay this was like the. balance that balances okay so what we. have here what we got. not including mortgage. but does include business 134 794 at the.

time of the statements of debt owed but. minus the uh shared business cards 65. 903 dollars tournament ality payments. five thousand three hundred eighty four. dollars not including business three. thousand four hundred nineteen remember. sixty thousand dollars is what you pay. yourself is that after taxes before. taxes before yikes so you're probably. bringing in like four thousand two. hundred that's about a monthly basis but. three thousand four hundred nineteen or. minimum monthly payments.

so death now. one thousand two hundred and thirty nine. dollars is spent on food. not grocery. going out stuff like that. different bills two thousand bucks. subscriptions two hundred sixty dollars. definitely need to end those we just. can't do it interest and fees. three thousand dollars in a month three. thousand death dollars of Interest.

your minimum monthly payments plus. interest. for everything across. and that's eight thousand three hundred. ninety bucks. yeah crazy it gets I mean start throwing. the vehicles into that I mean all that's. in the business but that's where the. bills are just astronomical so some of. these numbers are small in comparison so. it makes it hard to really feel like 150.

bucks is a dent or whatever. yeah it just all adds up it just all. adds up. what's your vehicle on the business we. have about 20 vehicles in the fleet and. um one of the security people oh okay. okay the security patrols and stuff and. so I mean. I I don't even know I'd have to look at. our books to see us. um. over 200 000 in vehicles.

uh probably not the most Stellar. interest rates at all times yeah. especially my credit's jacked right now. with all this balance on my credit and. it's making it more difficult and. expensive to purchase vehicles and so. that's also where I'm hesitant to close. any credit card accounts right now just. because I feel like it's already hard. enough uh as we need more vehicles. this is why non. great leverage going into business is. difficult because you need to make more. purchases to continue but since they're. not cash flowing because of all the.

insanity that is the debt before. and of course you need to pay off your. own personal debt but again we can't pay. ourselves more because of all the debt. Insanity that was used before. dude again I would just stop expansion. for now and worry on getting these I. personally personally just from my own. uh standpoint if I was running this and. I'm going to think about it in some ways. of real estate depending on the interest. rates and the debts and some of these. interest rates are really bad especially.

with the vehicles and wants needed to. continue to expand and operate the ones. we already have in order to buy new. vehicles I'd probably sell off a. franchisor too. and sucky as that is I know because once. you expand you get it it's awesome and. you can see the potential Returns on it. once it gets to a certain point but. just clean up some of the stuff cash. flow and then cash flow over to those. purchases instead of always going into. debt I think that would set you up much. more secure in the long run I'm not. saying this can't work I don't have the. ins and outs of the business.

potentially it can but the risk level is. immense right now immense like headed. towards like. are you are you required eventually to. declare different kinds of bankruptcies. in the future I don't think it'll come. to that. I think that I can continue to hold on. where I am we're basically waiting on. when false essentially and that's what. is unfortunate about the choices I made. in 2022 because I don't get to enjoy the. Wind Falls I just get to see it sucked. up and I still have debt after yes and.

so that's where I I would tell myself. this when I was making all these. purchases I'm gonna have this I'm gonna. have that and I'll be fine and I'll be. okay and a lot of those things got. delayed or postponed and didn't come. through like I was hoping they would and. I had learned those lessons the hard way. unfortunately. um. there was a large chapter in the. business. um where I was married and one of the. reasons that uh I chose to get a divorce. was I I thought she spent a lot and I I.

thought that I could do better and I. wasn't crazy about it and then I kind of. showed myself that I was doing it too. ultimately I think is a lesson that I. learned in 2022 and through my own. behaviors and stuff uh and so you know. it's something that I learned through. that. um it's kind of an expensive lesson to. learn but as a lesson I learned and I'm. trying to get better at hence me coming. on the show I figured maybe there's do. you see a. a path on it or something yeah. I don't know who. the path is going to be difficult and.

it's going to require things that I. don't think you're gonna necessarily. want to do but. I think the first part of it because in. terms of how many hours a week are you. working. no 40 50 ish yeah so you can't let me. work a little more but not too much like. ubereats and stuff but either way I. think what's going to be required for. you to bring in more income is to free. up more cash flow in the business yes.

and I think the only way to free up more. cash flow in the business is doing. something you do not want to do and that. is selling off a couple franchises to. pay off some of the debts and get this. point to a cash flowing thing yeah. that's something from this conversation. I don't think it's something you're even. going to consider no that's actually. something my business partner and I have. talked about yeah two things we've. talked about is uh one of the franchises. that hasn't launched yet selling it. there's no revenue on it but. um what it will do is is actually free. up some cash flow in the other yes. um and then the other thing is uh he's.

actually refinancing some debt he's not. near as bad as I am he's he's a lot. better than I am. um but he he we had a phone call this. morning where he's thinking about. getting some things refinancing if he. has some excess uh that 44 000 card. that's eating him alive he can't stand. that either and uh so he's talked about. hey I can refinance this until we get. this next windfall out of that franchise. that we're expecting uh and I can. refinance it at an interest rate that. makes sense at least and so that'll at. least take that because he said well. we're spending on interest I mean we.

could hire somebody for that and that's. the reality of what we're sitting on. with this and so he's he's contributing. in that way as well so he's a tremendous. partner to have. um you know I'm just we're we're just. doing the best we can to keep up but. we're also distracted a lot with things. coming up day to day okay so if you guys. do do that that'd be great if you know. some cash flow I think almost. away I would look at this oh your credit. cards. oh your credit cards so.

they're your credit score is so bad in a. way where it's like. one thing we could do because these. balances are insane on the credit cards. and the. a lot of people hate sofa and there's. you know good reasons too. one thing they can do and I talked about. it as a sponsor once on the show of a. product they do offer that helps in this. kind of situation and you can look at. other companies well they're not a. sponsor but.

instead of these 30 you're paying on all. this consolidating it down into. something that's like 15 16 absolutely. terrible interest rate so much better. now don't think you can you know let. the foot off the. gas or whatever because you refinance. you accomplish something but it helps. pay off the situation in a little. in a better way the mortgage for not. even thinking about that we were just. paying for it and now that's cash flow. and use anything extra you have there to.

throw at the debt but I would probably. consolidate as many of these credit. cards as you can into a lower interest. thing and then freeing up as much cash. flow in your business by paying down the. business debt as aggressively as you can. I think makes sense at least the ones. that are bad interest and obviously. these business cards are bad interests I. don't know what the car situation the. vehicle situations you'll have to look. at that make determinations on your own. but these at these 30 you know minimum. monthly payments of 615 660 200 bucks. when you can free up some extra cash.

flow sorry that was this interest meter. crew the minimum payments are also. insane but if we can clear up some cash. flow increase your income to like. seventy thousand eighty thousand dollars. over the next you know six months 12. months then you can start hammering more. towards the depth what matters right now. is you certainly need to be hitting also. the minimum monthly payment on the. Consolidated thing will also be better. so it'll be easier for you to pay off. because we're kind of in some Bible mode. right now we're taking clear up some. cash flow you got a strict budget. yourself strict budget.

you know besides the. you use any budgeting app use a. spreadsheet I don't care you're going to. have your rent you're gonna have your. utilities Health Care is already taken. care of through work I don't really have. health care okay get health care is. important. VA I think go through the VA I've just. never registered okay register. definitely register and. so okay so rent utilities uh and then of. course car and gases through the company. but on the personal end you find ways to.

prep meal prep stuff like that put it in. coolers warm it up as you travel. minimize expenses as much as possible. but we just cannot be eating out anymore. we can't do anything you know you need. to lay out the budget see what money is. free but try to minimize everything Bare. Bones Bare Bones and everything else. goes towards the consolidation. just paying it off as much as you can. and then the more cash flow will be free. the more goes to paying this off so you. got to take care of the business that a.

little bit to free up some cash flow. maybe sell some things uh within the. business like franchising. um and then as much cash flow as. possible Bare Bones budget we are paying. off personal debt this is going to take. a long time I don't know how long but. you're just gonna have to stay like. incredibly mentally strong through this. because you're going to want to eat out. you're going to want to take your kids. to do nice things and you can do free. things and other people can say pay for. things as well. but unless you want to be like this.

situation ballooning into your 80s with. nothing saved for retirement correct. yeah and at 40 that scares me. dramatically I'm not really worried. about retirement I would be this this. essentially is my retirement strategy is. selling this essentially at some point. well I hope so that's certainly a big. gamble. but either way. this balloons to our 80s if we're not. dealing with it so that's why the. temporary sacrifice of the next however.

many years it's going to take and you. need to get an emergency fund after that. bad debts paid off it's just I'm I'm. scared this is scary. I have a few prospects of things. they're not happening tomorrow right but. um The Little Rock franchise for. instance uh actually does cash flow okay. but our franchise went through a Big. Brand refresh and so we had to re-wrap. some vehicles and do a lot of stuff and. register the new vehicles so we ate up. some cash on that but we're catching. that back up that one that one at least.

so we're hoping to see that start to. finally get that'll be our first one I. think getting to positive cash flow on. top of the new contract they kept. that that territory uh has about a ten. thousand it's ten percent of Revenue is. what pays the the note on that. essentially and it's zero percent. interest. um so it was 390 000. well that we're. paying about ten thousand dollars a. month right now about a hundred maybe. about twelve thousand dollars a month. right now against the note on it so once. that's paid off that's free cash flow. but the other benefit is I've got a very.

big contract I'm looking at possibly. starting in November uh that'll put. another I think twenty six to thirty. thousand dollars a month. um on that note as well so when I put. that because I was curious when did we. pay this thing off by 18 months that. franchise will be paid off and that'll. free up about 30 000 in cash flow so. that's where it's a waiting game until. then right and we can still cash flow in. the meantime at a modest amount uh so. it's just to me it's okay can I stay. alive for a year and then that cash flow. helps me but then the other thing that.

we've got on is the uh I'm not sure if. you're familiar with the ERC employee. retention credit credits that a lot of. businesses just got all that filled out. I'm expecting a huge huge amount coming. from that so we spoke on the phone this. weekend about the plan of okay if we get. this where do we plan on doing it and. essentially what we want to do is well. we can pay off all the credit cards and. park 100 000 in each business uh to stay. there as a buffer okay we're not. borrowing against receivables anymore so. that's we've already got that plan but. again I don't have that dollars today. that could be nine months before that.

comes in so it I'm still a year out from. any kind of lifeline and I can still. keep selling along the way and and try. and doesn't mean that I can't this is. where old me would have okay I'm gonna. get all this and fine I've kind of. modified myself a little better I'm like. okay it's just gonna suck in the. meantime and I'm gonna do what I can so. I can at least enjoy the windfall. instead of seeing it all gone so any. progress I can make in the next year is. great but ideally in the next year I. should see a lot of these problems and. also while you're waiting don't get your. little excitement of let's expand no no.

no we've actually talked about that too. uh he's more of the itch for expanding. than I am uh however with both of these. coming on in a three month time frame. that was a lot to bring on and we both. said we're not doing anything for two. years at least and so we're going to. stabilize what we have because we kind. of deep and then we also said we're not. going to grow again until we actually. have a better stability point to do it. and with including cash in each market. to do it so there's there's other things. that we've learned along the way so. basically I tell people this is the most. expensive college education I could have. got yeah I'm nervous I hope those things.

work out um we definitely probably a. year just how long things are gonna. we're definitely going to want an update. though yeah this is. quite the situation given my thoughts on. it I'll let you have the final word. um. I don't know any better way to do than. I'm doing right now I I wish that I did. I'd be happy to try it. um but I do appreciate you listening and. I hope that my situation. is at least unique enough to maybe give.

some people some advice in one good way. or a bad way hey don't do this or if. you're in this situation maybe do. something different but uh. yeah it's stressful but. um I'm surviving so far I I I will say. um I was that was going to be the final. word but since you said like you know uh. I'm doing what I think is best and I'm. open to other ways what I would do when. the extra cash flow comes in with these. uh business accounts the balances. they're at I would just snowball them so. pay smallest off to largest until you're.

clear and more cash flow on your. different debts include the cars in them. if they're bad debts as well if they're. over like five percent then from there I. would definitely refinance again your. personal debt into a credit. consolidation if you can if not with. where the bounces are you could pay off. the maybe the 1000 one and then the four. thousand one and then from there with. where the balances are and where the. interest rates are odd Avalanche them. which is paying the highest interest to. the lowest interest and that way you're. taking the advantage most of time and.

the interest so that's how I personally. go about it clearing up as much cash. flow in the business So eventually you. can take some more away to pay off your. personal debt I think it's key right now. and then we can expand forever. uh I've got a finite limit on that. myself. cool anything else no thank you very. much I think I've been screamed at the. least amount on this episode so I'm. proud of that I got squeaky a little bit. but there's. this is so much here it was almost. overwhelming for me and that's rare so.

thank you awesome thank you for Jason. and his hammer Financial score I think. he hit the nail on the head so spending. within her budget one out of ten. he's just not spending in the budget. he's overspending he's transferring some. savings to save himself debt one out of. ten only getting a one because you know. he doesn't owe the IRS extra money and. he's not in collections retirement. there's nothing 0 out of ten emergency. fund there's nothing zero out of ten. real estate okay. he had a primary residence he's turning. it into a rental as he takes care of a.

rental it's gonna be six out of ten. obvious ways to improve that is getting. to help pieces of rental property but. that's still pretty good six out of 10. at Aggregates to a 1.5 out of 10 for. Jason's Hammer Financial score make sure. to check out the resources in the. description below and don't forget to. follow my Instagram and Twitter thanks.