Rock Bottom and the Moment of Truth

From late 2005 to late 2007, Cindy and I dedicated nearly every waking hour that we weren’t working in our day jobs and invested every spare dime we could scrape up into the MLM business that had provided us with a glimmer of hope that we could someday climb out the ridiculous scarcity we had been battling for several years. And believe it or not, the 1099 we received from that corporation as “independent business owners” in 2008 was close to what Cindy’s W2 showed for the same year. That said, there’s a stark difference between revenue and profit - but that’s a business economics lesson we can circle back to another time. 

At face value, we were indeed climbing out of the pit of scarcity. Behind the scenes, though, not so much. We hadn’t charged anything on a credit card in years, but paying them off is still a steep hill to climb. I’ve shared enough about the issues with our stupid cars so I won’t rehash that again here. What I will share is that we were still living paycheck to paycheck, and that often involved hoping that the next paycheck was enough to keep us from incurring overdraft charges on payments that were already scheduled. In late 2008, things got really exciting - and not in a good way!

In What’s KILLING Your Profitability?, I shared the following from a 2016 Ivey Business Journal article called The Rising Price of Bad Leadership:

“Bad leadership is clearly expensive. Fraud resulting from mismanagement at Wells Fargo, for example, has already cost the bank about US$300 million in fines and pre-settlement investigative costs while wiping out something like US$6 billion in shareholder value. Ex-employees, meanwhile, are seeking at least US$2.6 billion in a class-action lawsuit related to the Wells Fargo corporate culture that rewarded employees who created multiple accounts for customers without permission.”

Our mortgage just so happened to be owned by Wells Fargo in 2008. Through a not so great series of events, one of our monthly payments was processed five times in one single day. At that point, it almost required an act of God for us to have enough money in our account for one mortgage payment to process without being overdrawn. Five of those transactions in a matter of hours was a disaster. Not only did each of the four extra payments incur fees, everything else that hit our account that day and for the week or so that followed did as well.

I spent hours and hours on calls with any Wells Fargo employee I could reach, but I never spoke with the same one twice. I followed every instruction I could squeeze out of them to the letter. And three or months into that ordeal, we received a registered letter; not some sort of resolution covering the several thousand dollars in fees that debacle had cost us, but a notice of foreclosure. Praise God it came from an office in Iowa and not somewhere I could afford to drive to because that may have been the day Wes landed in jail. And praise God for a friend locally who stepped in to help us refinance, avoiding foreclosure!

Earlier in detailing the ripple effects of scarcity, I referenced the only time I’ve ever struggled to sleep. This opened a whole new chapter in that book. Receiving that letter removed any remaining illusion that a “we’ll figure it out” approach would be enough. This was where I had to choose survival or surrender, and I damn sure wasn’t about to surrender. Our only option at that point was to dig deep into Hill’s fifth leadership, definiteness of plans, in ways we had never done before. Rock-bottom resource failure strips everything away except the plans we’re willing to make and the details we’re willing to master.

We’ll look at how that led to even more self-control emerging next. First, though, I’ll share the highlight of the Wells Fargo story. A few years ago, we randomly received another letter from them detailing the restitution we were due as part of a class action lawsuit (that we weren’t even aware of). And with that letter came a check for $16!!! That healed every wound instantly, as you can imagine. One final thing before we move on: think about your own “near-foreclosure” moment (literal or figurative). What one decisive plan could have changed the outcome?