Today I want to share a bit about how struggles with money can go deeper than what might appear on the surface. Between Mrs. Cat and I, she was the one raised in a frugal household with the mentality of saving just engrained in her from a very young age. This was not the case for me and as I have overcome many of the challenges that have held us back financially up until now, I admit I still have a lot of work to do. Here is an example of one area where I continue to work on.

Change for Change
Photo by Kat Yukawa / Unsplash

Acting Out Of Fear

I am looking at my portfolio of cryptocurrencies right now with a balance as high as I’ve ever had since I first bought back in 2014. At the same time, we have a debt that we really should pay off. It’s actually the last debt we have as a family as we took the Dave Ramsey route and paid off our balances throughout 2019 from smallest to biggest.

However, I can’t bring myself to sell any of my cryptocurrency off to do this. I’m a bit paralyzed. This is my extremely hesitant analysis on why I am feeling this way.

Looking Back On The “Why”

What degree of achieving financial independence has to do with the concept of bravery in the face of fear? I have felt like a coward in the face of major life financial choices more than once. It’s taken almost 20 years as what could be considered to be a sentient adult to have enough self-awareness of when false courage and true fear are pulling the strings of my choices.

I made an investment in cryptocurrency back in 2014 earned me enough money to  pay off my six figure student loans and several other debts on top of that in one fell swoop. You would figure writing that check would have been one of the easier choices I could have ever made, however I dragged my feet in doing it for months. Seeing the number go up was exhilarating and intoxicating - probably not dissimilar to how people who own TSLA stock have felt recently. Up until this point in my life I had constantly been just barely breaking even or falling behind. My choices an actions brought me all of this and up until about 7 years ago I just thought that is how most people lived.

Eventually, the birth of our first child and a turbulent time at work pushed me to sell much of what I owned in cryptocurrency and paid off those debts and never looked back. The weight off my shoulders felt amazing and it instantly changed how I self identified. My entire adult life up until then was saddled with massive debt from college, which I incurred because I was afraid I’d never get out of the low income life I grew up in.

It’s clear to me that fear has had a big influence in driving my choices for about as long as I can remember. I don’t ever remember not feeling afraid of the future most of the time. This often translated to making risky decisions because I felt I had nothing to lose. Some of these risks, such as buying cryptocurrency, paid off big time, but plenty of others blew up in my face and some I was lucky to have gotten through un-scathed. This shaped many of my relationships over the years with friends, family and others in ways I would choose to alter now if I had the ability. But dwelling on the past beyond learning lessons really doesn’t benefit anyone, so onward with the learnings.

I actually had become accustomed to the identity of perceived powerlessness associated with my debt. Ridiculously a part of me was afraid to let go. I also had become attached to the feeling of success and security with having a balance of dollars in my net worth from cryptocurrency in the range of what I never thought possible. I was not making the true mental connection that even though I had this wealth generated in a highly volatile asset such as cryptocurrency that I was not actually experiencing the true benefits from it because other parts of my finances were in the red.

You Can’t Actualize Gains OR Losses Without Selling The Asset

So, imagine my and my wife’s surprise when doing our taxes in 2018 and got a massive bill from the IRS for what we were supposed to have withheld for capital gains from the cryptocurrency sale. Add on top of that, I had been fear driven and ignorant throughout my 20’s as well when I had freelanced between getting laid off a few times. By being sloppy and uninformed across the span of 8 years with my taxes I wound up owing to the IRS and they were expecting to get paid.

To say it was a punch in the stomach to see a bill in the tens of thousands for taxes owed back as far as 2010 would be an understatement. Being reactive financially all those years caught up to me in a big way and I realized that if I was going to stop this damage I kept continually causing myself and at this point my family, I would need to make a big change. I paid an accountant to get all my ducks in a row, sign me up for a payment plan while I figured out how to deal with this mess and committed to not ever make this mistake again.

This Didn’t Happen Overnight

The inflection point for the Bear and Cat family came in 2019 after a lot of challenges left us feeling like despite our massive success and luck that we were still somehow failing. Taking accountability on my part was the most important stage to start to turn the tables on what I considered to be permanently stacked cards against me and finding opportunities to improve every day. Just changing perspective and creating systems of accountability can lead to massive improvements from my experience.

Park in the Netherlands
Photo by Daria Nepriakhina / Unsplash

Finding ways to be more financially disciplined helped a lot - this included giving up drinking for 9 months, selling not one, but two brand new vehicles and clearing the house of nick nicks which had accumulated mindlessly. Every time I held onto something and asked myself why it was hard to let go, I realized before I was just escaping things that made me feel fear. But these things were trapping me, in fact. I could not move forward with them weighing me down.

Each day passing with this new mentality and shared goal with Mrs. Cat felt better and better. Nothing changes dramatically overnight but consistency plus time will move mountains. With less of a feeling of lingering doom around the corner came compounding benefits in how my habits started to heal themselves through me being more mindful of money. Earlier in life, when I’d feel fear or anxiety about something bad about to happen, I’d throw myself headlong into the feel-goods of spending if I could. People go on shopping sprees for stuff they don’t even need just to get that rush, whether it be approval from others or trying to fill some emptiness inside of themselves.

On the other end of this, learning to focus on things that didn’t cost money and to be much more transparent with my finances to my wife by joining all our wealth gave me space to focus on myself more. This included doubling down on being the best dad I could be to Little Bear - which has been infinitely more rewarding than anything I could ever buy.

Also important, giving up financial control, joining all finances and working together with your spouse can be a beautiful thing if you lean into all aspects of it. Learning to think of the “we” rather than “me” made a lot of hard decisions for us much simpler to make.

But for sure, half-measures beget half-assed results. I also needed to learn to sit with my impulses to escape fear through bad habits as well, because they also pop up. Giving myself space and time to analyze why I am feeling a certain way, why I might want to buy something frivolous, why I might want to buy that expensive bottle of wine, etc. If you can sit with yourself, even when it’s uncomfortable, and be a strong witness to your own behavior, the fear dims and you are able to start actually healing and dealing with the underlying issues.

Why Am I Being So Stupid About This Last Debt?

This was the sign at the entrance to a burger restaurant in Dubai.  It put a smile on my face.
Photo by Nick Fewings / Unsplash

Sitting with this feeling of why I am not actually doing what I should be doing, which is paying off this debt with profits from cryptocurrency, I recognize a few factors and excuses I am giving myself:

  • I want to wait until my portfolio number goes a little higher before selling (it’s already far higher than the number my wife and I agreed to sell at)
  • I want to wait until the next billing cycle to sell so I can maximize returns over the course of a month (as the market is showing at this very moment, you can lose value as fast as you accrue it overnight with cryptocurrency and other highly volatile assets)
  • I don’t want to get another surprise tax bill (I know exactly how much to set aside for taxes this time around as my accountant made sure if it last time we spoke)
  • The monthly payment on the tax installment plan isn’t that bad (imagine saving all that instead, never mind all the interest that is being paid to finance a debt that literally has zero value to me, unlike a house)
  • I’ve been too busy to sell (while I have been busier than usual and selling cryptocurrencies is not as simple as selling stocks, I could have made the time for it)

Here are the reasons I should have acted swiftly and decisively out of having a vision for my future:

  • My portfolio balance was around 30% more approximately 2 days ago. Talk about a missed opportunity.
  • I am starting a new job next week and want to go into it with zero debt so I can put every penny possible into my retirement account and raising our emergency savings from 5 months to 6 months.
  • Mrs. Cat has asked me to do this many times since the cryptocurrency market started turning bullish again a couple months ago and I have just kept recycling the above excuses.
  • The interest rate of the tax payment plan is 5% and the staking returns on the cryptocurrencies I hold are only around 5%-7%, so by not selling I am only netting a small amount of return on principal and frankly there’s no guarantee the price per unit on the principal will go any higher.

I will need to actually make a move on this soon. While I recognize in the face that I don’t want to sell because the risk taker in me thinks that the assets I hold will only go higher, the witness in me also realizes that with all the lessons I’ve learned in recent years, the only guarantee is that I have enough money to pay off my last big debt and that nothing I could do financially would be better than that.