How to Accept a Huge Financial Loss and Move Forward in a Positive Way?

Updated on July 02, 2013
M.M. asks from Vail, CO
14 answers

I'm just venting. I know I need to do the 'work' to get my life back on track but I just cannot seem to pull myself 'unstuck'. My husband and I have both worked very hard and been very frugal for over 20yrs. I had two jobs for ten years of that time. We purchased a home and two rental properties as investments. Market plummeted and now we are $400k in the negative If we sell and actualize our loss or just keep pouring good money after bad into loans that we will never get back. Rent won't pay primary home mortgage. I know health and family are more important and 'it's just money' but I feel like such a failure and it's affecting every aspect of our lives especially where we live (my father is very ill and I would love to move closer to him). We are not eligible for any govt assistance plans and we have tried multiple avenues. Again; I've just venting but I was hoping to find some advice on how to accept a huge financial loss and move forward in a positive way. I feel so depressed, angry, teary and resentful. Thanks for listening.

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So What Happened?

Thank you so much for your kind and encouraging words. I really appreciate it. I stayed awake until 3am looking at properties for sale (small increase in values) and rentals in our area with the view to downsize. You are right; I have learned several things especially that we thought we put a lot of thought into our purchases but really we were far to ignorant about Real Estate cycles and investment properties.We have to take responsibility for that and also for buying a home too big for our needs as a financial gamble. I have a lot to be greatful for and having an extended pity party isn't helping in any way. One day at a time starting by purging 'stuff' and cleaning to be open to selling or renting options. (Selling means actualizing the losses). Thanks again

More Answers

X.O.

answers from Chicago on

Please don't feel like a failure!

My aunt and uncle are millionaires, many times over, but they have faced ruin at least once in their professional lives, and another time have been part of a lawsuit due to business dealings with some unethical people who kept them in the dark, and their entire estate was at risk. At the same time my uncle was battling multiple myeloma, and they were reeling from the death of their granddaughter to an e. Coli infection. I've never known people to suffer through so much suffering at once. My uncle eventually lost his battle with cancer, but had stabilized their financial situation first. What my aunt wouldn't give to be poor, but to have her husband and granddaughter with her today.

My in-laws immigrated to the US over 20 years ago. They left behind, in their war-torn country, prestigious careers as a mechanical engineer (FIL) and an OB/Gyn (MIL). They also left their beautiful house in a major city, which they rented out to the US embassy for housing diplomats. It was that grand. Due to the situation in their country they couldn't take anything with them. Their pensions, their bank accounts, and their property were all left behind and they had to pay to have their kids smuggled out of the country. When they left their country their home was worth over $1million US. 12 years later when they finally had the opportunity to sell their beautiful house, their country's economy was devastated. Their home was now worth only about $100k, US. My FIL has spent so much energy and emotions trying to play the "what if" games. My MIL put her head down, washed her hands of the situation, and looked to rebuild their life here in the US. I'd say they did quite well. They started over at the bottom. My FIL has been working for Wal-Mart for nearly 20 years, and my MIL has done everything from scrubbing toilets to working in a factory to now being a beauty advisor at Walgreens. They were able to put my SIL through pharmacy school and my husband through med school, because they knew that they had to just keep plugging on.

One final thing. The past 2 weeks my husband has been terrified that he could have ALS (Lou Gherig's disease), which is universally fatal anywhere from 6 mos-8 years of onset. He's the sole provider, and my earning potential is only about 15% of his. I didn't think about finances a single time while we were awaiting his possible diagnosis. All I could think about is that my kids might grow up without a dad, and I had no idea how I could even begin to be strong for them without him. On Thursday he was given a clean bill of health, and thankfully his symptoms have a benign explanation. I have never been so happy and hopeful!

I hope there's something somewhere in here that is of some comfort to you.

Prayers and hugs in this difficult time!

10 moms found this helpful

C.O.

answers from Washington DC on

M.:

I'm sorry.

if the rental properties are not generating income and have become an anchor - toss the anchor. Go for the short sale and work on getting back in the green.

It's hard. I have a girlfriend who owns over 10 homes - all over the United States - as she was USAF - and bought a home every time she moved. She had to sell two of them at a loss to keep from sinking.

If you live in Vail, Colorado - I didn't realize the market had tanked there. My best friends daughter lives there and said their property is doing fine. I'm sorry yours didn't turn out well for you!!

Did you learn anything from this? If you did - then you are not a failure. You can use this as a learning experience and know what NOT to do next time. Learning from your mistakes is NEVER a failure. EVER.

So instead of being depressed, angry and resentful - make a list of everything you learned from this - heck - maybe you can write a book! No, I'm not kidding! If you can keep other people from making the same mistakes? Wouldn't that be a GOOD THING? Turn this around. YOU CAN DO THIS. Stop letting it drag you down. BEAT IT! YOU CAN DO IT!!! Look at all you have learned!

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P.M.

answers from Portland on

I feel your pain, M.. Many of us who were careful/lucky enough to purchase property or save toward retirement took staggering hits when the markets crashed. It is discouraging and infuriating. Many of us have been set back decades.

The only way I know to deal with it in a healthy way is to take inventory of the bazillions of blessings in our lives. Good marriage? Children? Shelter? Enough to eat? Bed? Soft pillow? Decent clothing? Electricity? Clean water? Music? Access to medical care? An education? Safe neighborhood? Cup of tea? And on and on. Lots of people don't have those. I've never reached the end of that list.

I would like to see more prosecutions of the geniuses who caused the crash, though I recognize this isn't likely to happen in my lifetime. I can't waste my life waiting for it. And real estate is beginning to recover, for those who were able to hang on to it.

Wishing you many gifts and blessings.

6 moms found this helpful

J.W.

answers from St. Louis on

Sunk cost.

Of course I am an accountant so it is an easy concept for me to accept.

The point of sunk costs is that they cannot be undone and should never be looked at going forward because they tend to compel more bad decisions.

An easy example of sunk costs is a gambler that is losing. They are down a hundred but they just know twenty more and they will win it back. Then they are down one twenty but just another forty..... Never double down on losses.

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A.H.

answers from Fort Smith on

I'm so sorry!! It's easy to feel like a failure, but you're not. Things unforeseen sometimes happen that you have no control over. Don't feel like a failure. A great book that will help is "Who Moved My Cheese" check your library, it should be there. I have read it several times when our changes happen in our lives, like my husband getting laid off, me getting laid off a year latter. Looking back I can see that it was God setting the stage for something different and much better. When my husband got laid off, he ended up with a different job that he is now making twice as much which enable me to be able to homeschool my children after I was laid off. It is bad now, but just use this as a learning experience, pick yourself up and continue to move forward.
The best of luck

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B..

answers from Dallas on

I can only imagine that huge a loss. I am thinking you still have pretty good earning power. It will take a lot of time to get back to breaking even.
I am so sorry. My H and I are very frugal and I understand the many times you have denied yourself things in order to build wealth. There is a lot of pain in letting that go. But gone it is.

Have you ever read or listened to Dave Ramsey? He has many books and a radio show on money. He was worth a fortune and lost it all. He regained his money in wise ways. Give his show a listen.

My FIL died. He had spent a lifetime working incredibly hard and being extremely fugal. My mil went crazy after he died and all that money that represented his work for his family will never be used for his kids or grandkids. That was a bitter pill to swallow. It took over a year to grieve, not only his death, but the knowledge of the futility of his work.
This will be your challenge and it will take time, but it will happen.

Focus on how you can invest in your life everyday. Not in a monetary way, but people, interests and sharing what you have. When you can, find a way to volunteer. If you see people who have less than you, then you will understand the ways you are really rich. You have a sharp mind, you understand money better than ever and the futility of dependence on money. May you find peace. And find God's love for you and your value in Him.

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A.S.

answers from Boca Raton on

Real estate is a business just like anything else. I would try to think of it as a business that you and your husband invested in, and worked hard at, but that ultimately failed. There are many businesses that have blown through more way more than $400K. Yes it's alot of money, but in a business sense it could have been much worse.

I don't blame you for being angry and resentful. Powerful forces propped up the real estate market and then hyper-inflated it - then cut the knees out from under it. And guess who gets hurt the most? The middle class. Sounds familiar. And now investors are swooping in and picking up cash deals, cheap. We will be a nation of renters (tenants) before it's all said and done. This should be an anathema to a people descended from people who left an ancient feudalistic system.

I agree with Dave Ramsey's principle that rentals should always be purchased with cash. But hindsight is 20-20.

Hang in there. It could be much, much worse. Debt is slavery.

JMO. Good luck.

ETA: I liked Wild Woman's answer alot too. Dave Ramsey reached the pinnacle of his success building on the major failure of his real estate business. He lost everything in his 20's (he was very successful in real estate at 26) and went bankrupt. What did he make out of it? Let's just say he made serious lemonade out of some very sour lemons. :)

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J.T.

answers from Victoria on

I wonder if you could rent out the house your living in as well and move in with your father. Even if its only a couple years it wont hurt to get that extra income as well. Things can change in a matter of years too. Where we live the oil companies have boomed. Hotels are going up very quickly. 4 yrs ago the neighborhood I live in homes were selling for around 80-90 and now these exact same houses are going for 120-140. In a matter of a year they have gone up to baffling prices. You did not find yourself in this situation over night and its going to take time to get yourself out of it. Dave Ramsey or other financial help would be the first place I looked into. Blessings for your family.

4 moms found this helpful

K.I.

answers from Los Angeles on

So the rental properties are not rented & paying for themselves? If they are I say leave them be & keep having someone else pay your mortgage! If you hold on to them for another 10 years, I'm sure things will turn around?

If you must let them go, then let them go & move on!

~I know its hard! We had to sell one of ours as a short sale b/c we just couldn't carry it anymore, it's difficult taking such a huge financial hit...but sometimes there is no other options available to you!

Please know you are not alone & there are others out there in the same boat as you!

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R.M.

answers from Cumberland on

I'm sorry for what you're going through. Would any of the properties, if rented, carry themselves? Maybe you could sell your home furnishings, downsize and rent for a while? Or stay in one of the rental properties and rent out your primary home ? I know how you feel-you are not alone-this has happened to millions of people/families/veterans. I am including you in my prayers and have been for a long time. Take care.

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T.F.

answers from Dallas on

What were you invested in that took a nosedive like that?

Hopefully you can pull out of the problem but please talk to a financial advisor regarding your investments.

The housing market never did tank here like it did in other places. Still, $400,000 sounds like it was a huge financial risk to begin with.

Work with a financial counselor. Back in 87 when the stock market crashed, we lost 1/2 of our IRA (we are substantial savers and it was pushing the $400,000 mark that we lost). You CAN come back. It takes time, patience, LOTS of hard work and good investment decisions.

Best wishes!

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M.S.

answers from Boise on

It is very hard to deal with loosing so much, and yes it is money, but you need money to do anything these days! We did not experience as much of a loss, but we did experience some hardship. When the market crashed my husband's CEO at the time decided everyone needed a pay cut. Which meant the lowest on the pay scale got the most cut. We lost $500 a month in pay. We could barely make our bills, let alone try to buy the things we needed like food. We found a place that gleans the fields after harvest for the food banks, and started gleaning there. We were able to pick for the food bank, and then when we were done, pick for ourselves. We were able to put up a lot of food that way, which helped through the winter. Yes, not much meat, but we did have healthy vegetables and fruit. What we tried to do was to start finding ways that we could help those worse off than ourselves in some way. That way we could help and feel useful. Now, there is a new CEO and although my husband had to slowly earn the $500 a month back that was taken, he finally got it all back with the last raise, and now we are able to put some back each month into savings.
You are not a failure, the govt has failed you. Try to find something that makes you happy and makes you feel useful to get your mind off of what has happened, and with patience it will all work out in the end, and usually better than you ever dreamed.

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D.B.

answers from Boston on

Get a financial counselor to go over everything and help you prioritize. You are understandably emotional about this, having worked hard for good money and now not seeing it pay off. You need an objective opinion and that's probably a wise use of your money right now. You need to do more than just vent (although venting is good!).

Also, a lot of mortgage companies and credit companies, even the IRS, will modify their agreements, and that can be facilitated by an intermediary with some more knowledge than you have. There's no shame in asking for help. You're not alone. Ask your accountant or family attorney for a referral.

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K.M.

answers from Denver on

I am so sorry that this is happening to you and I know from personal experience how difficult it is. In 2008 we were comfortable, had just purchased a new home (way under what we qualified for), and had 1 young son and another on the way. The economy collapsed and my husband's income went down more than $70K literally overnight. Even though I was working, we still couldn't meet the bills. We tried everything. Loan consolidation, eating top ramen on a regular basis, shopping at Goodwill. We finally had to give up and file bankruptcy and let our house foreclose. I wish we'd done it earlier. It still hurts 4 years after our bankruptcy was discharged because I feel like we failed. However, in reality, life is much better. I know the angry, depressed, teary, resentful feeling. The financial and real estate collapse was out of your control. I would consult a bankruptcy attorney and just get some information about what bankruptcy would look like in your case.

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