The Value of Being Frugal After Bankruptcy

There we were, driving down the highway in my friend John’s new $100,000 shiny, black Mercedes convertible.

It was the first time I’d ever been in such an expensive (and fast) car.

I was thinking to myself, “This is the life. I want this, too!”

It was the summer of 1993 and John called me to, “do lunch.”

I was so excited.

You see, at the time, John was the owner of RE/MAX of Indiana and his office was based in Indianapolis. He was young…ambitious…the life of the party…everyone wanted to be around him…and all the ladies wanted to date him.

John was, and still is, a wealthy guy with a passion for learning. I admired him. I looked up to him in many ways…mostly the way he managed his money and how people adored him.

John and I had a barter relationship. I taught him how to use a computer and become tech savvy, and in return he taught me how to change my thinking so I could become successful. He loaned me books and audio courses. He recommended seminars to attend. He guided my path to “reprogramming” my mind.

So when he called and asked me to lunch I was thrilled to have some one-on-one time with him at some fancy lunch spot where all the big wigs hung out.

As I turned into his neighborhood I was impressed. The average home had to be at least 15,000 square feet. And considering I was living in a 900 square foot condo at the time…I was like a deer in headlights.

John is a very bright guy, but I always thought I was smarter than him…

But what I eventually learned was…how smart you are doesn’t determine the size of your bank account. I know a lot of smart people who are broke.

Wealth is not about intelligence, it’s about how creative you become in problem solving. That’s the key.

Most people limit themselves with two words…


John didn’t know the meaning of those two words. I admired him for that
and I wanted to be like that, too.

Only a few years older than me, he was financially successful while I had just filed bankruptcy. John had millions of dollars in the bank and I felt lucky to have a $500 secured bank credit card.

What was I missing?

I was curious to learn what made successful people successful. So I studied the book, Think and Grow Rich, by Napoleon Hill. The book became my study guide, and John became my financial role model.

I pulled into his very long, tree-lined driveway and parked my new, blue Ford Escort with the temporary license plate still on the back.

I knocked on his front entrance door (I had to choose between multiple entrance doors because the house was so big and took forever to walk around) and was warmly greeted by his maid who escorted me into John’s home office. We shook hands and chatted a bit. Then we left in one of his cars. He chose to drive his new Mercedes convertible that day.

He was driving fast on I-465 (here in Indianapolis) to take me to lunch. I was enjoying the company and conversation and was all dressed up. I felt really important.

Let me backtrack for a moment…you see, after I filed bankruptcy I decided to wear only jogging outfits. I’m serious. That’s all I wore. All day. Every day. I looked like a rapper . In the summer I wore shorts and t-shirts.

It was easy…convenient…time-saving…and very cost-effective.

So wearing jeans and a shirt with a collar was dressed up for me. After all, I could only imagine what kinda’ fancy place John was going to take me to for lunch.

Out of the blue he asked me if I like tuna fish. I said, “Sure,” not thinking too much of it.

We exited off of I-465 onto Allisonville Road and headed north. We turned into this little strip mall. I was thinking he needed to pick up his dry cleaning or something since we parked in front of a dry cleaner.

As we got out of the car I noticed he was walking toward a little deli next to the dry cleaner.

No, it couldn’t be. I got all dressed up for this?

Could this be where we were having our power lunch?

This little place could best be described as a hole-in-the-wall.

We entered the hole-in-the-wall. They knew him by name.

It was then that I realized this was going to be my power lunch.

John ordered for me…he ordered bagels and tuna fish.

As we ate our bagels with tuna fish I was in disbelief… almost embarrassed.

Here I am with one of the wealthiest young business execs in Indianapolis and we’re at a hole-in-the-wall deli eating bagels and tuna fish.

Where’s the maitre d’? The white linen tablecloths? The crumb scrapers? The sparkling water at our table with soft music playing in the background?

Those things weren’t there.

When John paid, I glanced down at the bill printed on adding machine tape and noticed our lunch was $4.12.

I was ready to spend $25 just on my lunch.


That day I gave myself permission to be frugal

Before that power lunch with John, I was too embarrassed to be frugal. I thought it was a sign of weakness…of poverty…of being simple-minded…of being on a tight budget.

I wanted nothing to do with that.

I wanted to spend…to buy things…to show the world I could get whatever I wanted whenever I wanted.

Of course, that type of thinking put me into bankruptcy.

What I learned that day was-John’s choice of being frugal in some areas allowed him to be extravagant in ways that mattered to him.

And being frugal was okay.

I knew he had a large house. I knew he took many fun vacations with family and friends. I knew he had a housekeeper. I knew he had several nice cars.

On the surface these things might not seem so “frugal.” But what John taught me was that each of those things had a purpose. His large house payment gave him a much needed tax deduction. His expensive cars were business write-offs allowing him to accommodate the wealthiest Realtors who wouldn’t be impressed by the head of a large real estate franchise driving a car like my Ford Escort. His chef kept him eating healthy and freed up his time to focus on what made him rich…his real estate franchise. And his expensive vacations were a way for him to blow off steam and recharge when his batteries got too low. Wow!!

And I wanted all of that, too.

I changed that day.

And it served me well in my recovery after bankruptcy.

The point is…

You can’t have everything after you begin to recover from bankruptcy. You have to pick and choose carefully based on what’s most important to your recovery at that time.

Delayed gratification is difficult for most people. But it’s essential for recovering after bankruptcy.

Remembering the tuna fish and bagels 13 years later…

One of the last times I saw John was when I did a Credit After Bankruptcy seminar in San Diego. John moved to Rancho Santa Fe several years ago. So I drove to meet him at his new home-or I guess I should say, mansion.

It was good to see him.

I wanted to see him face-to-face so I could tell him, for the first time, how much he inspired me and what he meant to me during those days after bankruptcy. It took everything inside me not to get misty (real men do that, too, you know).

I don’t know why I waited so long to tell him. Sometimes you forget about all the people who helped get you where you are today. I certainly did. And I wanted to correct that.

Then he told me how proud he was of my accomplishments and me. He noticed how much I had grown as a person and was proud to call me a friend.

I couldn’t take anymore. I had to leave. I was starting to get emotional.

We said goodbye.

Several months later my friend Joe and I met up with John when he was in town for his first book-signing at an Indianapolis Barnes & Noble bookstore.

I already had John’s book. I was there to show my support.

Apparently, I inspired him to accomplish one of his goals-to write a book and touch a few people’s lives.