How To Avoid Bankruptcy
Bankruptcy has been defined as essentially like everything in life that is basic such as family, birth, promotion, career-success and career-failures. It is a natural outcome of a process that involves a fair exchange of resources. When one end- yours- fails and you are asked to return or repay what you owe, it is simply fulfilling your obligation towards this exchange. Not wholly true! You can avoid bankruptcy completely if you change your perspective that it is something that can happen beyond your control. Demystify the mumbo-jumbo surrounding financial processes and see them as simply a matter of exercising prudent accounting.
Try to observe the lives of people who work with so much less and see the irony of having so much more and yet find yourself in the end, having your case heard in bankruptcy court. One would have thought that with all their credentials, their Ivy League background, their years of business experience, people who have gone bankrupt have actually failed to exercise some of the most basic money rules to avoid bankruptcy; rules that have even been taught to 10-year old children.
You can avoid bankruptcy if:
1). you don't spend more than you make 2). Always max out your credit card 3). Avoid too much gambling or avoiding it altogether 4). Buy something you cannot afford. To avoid bankruptcy indeed takes a certain amount of fortitude and psychological will-power. When you think of it, there is not much difference between a suburban house-wife tempted to splurge on Egyptian-cotton bed-sheets by maxing out her credit-card (despite a growing credit-card debt) and a Wall-Street tycoon who instructs his managers to complete a sale that they potentially cannot afford. In the end, both end up realizing (probably too late) that you really cannot spend more than you are currently making or currently have. It is simply bad judgment that could have been avoided in the first place. Some say that it is sometimes impossible to avoid bankruptcy when faced with a chance or random event that wipes out one's entire financial profile. This is only half-true. When the San Francisco earthquake (and consequent fire) ravaged the city, a majority of the businesses went bankrupt simply because all the other components that supported everything else went down as well. On an individual basis, it would seem fool-hardy to believe that one does not have contingency measures and access to some form of cash or savings. The saying that one should save for a rainy day is true as well as the assumption that a random disastrous event would not have hurt you that much unless you had prepared your financial legs well from the start to begin with. One can simply avoid bankruptcy by understanding that the things that seem the easiest to do like handing out money or your credit card can have the hardest consequences. Remember that bankruptcy makes no distinction among individuals; housewives have as much chances of ending up bankrupt as a Fortune 500 company CEO. As an individual, avoid bankruptcy by taking to heart the money values that you teach your kids. As a corporation, regardless of how complex your financial structure is, the same principle also applies.
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