The Millionaire Next Door

Self-employed: Working for Yourself or Your Creditors?

Davis is a millionaire business owner. Earlier in his career he was asked “where do you do your business banking?”  He responded, “I bank at the bank of abuse.”  It seems that Davis encountered an ever occurring change in loan officers who were constantly condescending and aloof.  And no matter how often he repaid his business loans, he was required to update his financial data frequently.  During this time Davis was dependent on credit to keep his business going.  But more recently he made sacrifices and did a better job using the company’s profits to further its growth.  This was done shortly after Davis heard a speech given by Gene, an extraordinary millionaire next door type whom I profiled in The Millionaire Mind.

His revelations and contributions to my research placed him in the top 10 of all the millionaires whom I have interviewed.  His main vocation was “owner of a salvage business.”  He became extremely wealthy by purchasing/salvaging distressed real estate from a variety of financial institutions.

But Gene was also a mentor to aspiring entrepreneurs.  His fire and brimstone sermon warned against the heavy use of credit.   Part of his sermon which I understand was highly persuasive details an experience that Gene had while cutting a deal with a large commercial bank.  Immediately after the deal was signed,

the senior credit officer of the institution signaled to Gene and walked him over to the large window in the officer’s top floor office.  They could see for miles. . . thousands of commercial buildings all around.  . . . the officers pointed to all the buildings and said the words that made a lasting impression on Gene, ‘We [the lenders] own it all . . . all of it.  The business out there? . . . You [borrowers] just run these businesses for us.  You guys run them for us, the financial institutions.

Gene told me how angry he was and “couldn’t see straight” after hearing those words.  He used this scenario in his sermon to emphasize that if one is addicted to credit he has little or no control over his own business.  “Bankers don’t respect you, why should they?  They’ve got you trained like a seal act in a circus.”

One of the main reasons that people become self employed/entrepreneurs is that they want to become independent, to run their own ship.  Going solo takes a lot of courage and initiative.  Yet according to the senior bank executive above business owners don’t really own their own businesses.  They are controlled by lenders.  Certainly credit has a place in the world of business ownership.  But over time business owners should strive to be less and less dependent on financial institutions for their existence.

6 thoughts on “Self-employed: Working for Yourself or Your Creditors?”

  1. Hmm. Maybe that’s why our “elected representative” gov’t shafted over 300 million of us in favor of a half dozen megabanks, leadership of said failed companies continuing on with no culpability for the failures they caused,even getting record payouts…they think alike. After all DC was perfectly frank in stating that gov’t built all our businesses, not business owners.

  2. I’ve adopted Dave Ramsey’s philosophy. I’m currently debt free for the first time in my life after dedicating 4 years to paying everything off. I will never take out a loan again.

    I work with all the national lenders on a daily basis. To say that they abuse their own clients is a gross understatement. I cannot put into words some of the stuff I’ve seen. The worst part: there are no consequences for the banks–none. Look at the mortgage crisis they helped to cause. No consequences. Even to the man, the individual applying for a loan, whom they treat like less than a human, there are no consequences. THE SYSTEM HAS TO CHANGE. I’m doing my part by no longer participating in the scam!!!

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