52 Year Old Has $0 And Is Stuck In A Pyramid Scheme

0:00My name is David Henson. I'm from Austin, Texas. Lakeway area. I'm 52 years old and this is financial audit. What do you do for a living? I've been in construction most of my life, but I call myself an entrepreneur. Okay. I have a construction company that I started in 2009. And prior to that, I had executive positions in two different corporations that were in construction as well. Oh, wow. Basically started when I was going to college, I learned how to build some stuff and I could make really good money. So I started just making the money instead of spending my wheels going to college is what I thought at the time.

0:39So what do you bring in a year right now? On a good year, my company does, you know, a million and a half. You know, since I've been here in Austin, things have been different. I came here and paralleled my company with another company. And so during that period, we were doing, you know, 450 to six and basically not collecting a lot of profit. but it was kind of a give and take type situation. So my company wasn't maximizing itself at the time, but we were pretty busy. And what does this company do exactly? Well, my construction company is basically a construction service company. I frame her by Forte, so framing houses was always a part of the game, but we moved into remodeling, and I'm more or less a residential expert on homes.

1:27And so I do a lot of consulting work with builders and architects around town. And by the way, if you want to help construct this company, I'm really trying to get to 100 ,000 subscribers and we're not too far away. So please consider subscribing if you end up liking this episode. Had to throw that in there. I don't blame you. I would. You know, the construction company was something that kind of came on and it's something I had to do. And it worked really good. I came here to Austin, you know, at the end of 16, the beginning of 17, and basically had a life-changing event. What happened? My wife passed away.

2:02Wow. And it was a pretty big blow. It wasn't something that we were not expecting. We weren't necessarily surprised, although she'd been sick for 17 years, so it was something that we kind of knew was coming. We weren't expecting it that day. So it was a leveling event, and it just kind of left me flat. I'm really sorry. Thank you. Thank you. And I'm not saying that stuff because I'm looking for sympathy. My wife was a wonderful person, and I always said that God gave her that because nobody else could take it. And she dealt with it well, and she lived a good life. So, you know, last year, a lot of things happened.

2:40My stepson, he passed away. We had the COVID. And because of that, well, due to that, we had some things. and bottom line to it, this came back here in September with basically no work here in Austin at the time for us, at least starting flat. And I'd had this machine, so starting two companies from cold start was quite a freaking feat. So it's left me at a point where I haven't really had an income for about four months. Okay, wait, four months as of like right now, four months? I would say so, September, October, November, December. so you must have money sitting somewhere to survive right um well you know i had some money and um of course i had some credit um yeah that's always a good time but the good thing is i didn't have a lot of credit um credit cards and stuff i probably got less than ten thousand dollars in credit card debt for sure and the debt the debts and stuff we can go over that too i'm i really can't wait to talk to you about it because maybe i know you can help me with it once i'm through all this.

3:49I'll probably have a heart attack first, but then I might be able to help with it. Well, and that's the whole thing is, you know, during the time I was doing a project in Lavergna, that whole eight months, you know, it was kind of a steady pay, but it wasn't good money. And in the end, I didn't get paid what I was supposed to get paid. And it left me in a position that I went into savings got spent. I walked into an opportunity here with this new business, because I found a great place to rent for our new business. And I couldn't pass it up. I walked in and talked to the lady, told her my story, gave her a$500 deposit.

4:19Two weeks later, I'm heartbroken and crushed this. I'm calling her to tell her that I've got to cancel it and to keep my$500 because I'm not going to be able to do it. I just don't see it. We've got to get this business open. So this business was the nutrition business? This is the new business, the ultimate red light business. Okay, so this was not construction? No, no. And this business, I actually formed a corporation in February this year. Okay. Is this the one that we have here? Yes. This is CTC Remodeling Construction. This is construction right here. Yeah. And because literally the construction company, it kind of has a life of its own.

4:52You know what I'm saying? So I wasn't focusing energy on this. The minute I had the opportunity to move into this building, this lady basically told me I could move in, just pay her when I hadn't made some money. So to me, that's an open door. Okay. What was the rent? $25. $25 a month with a$2 ,500 deposit. And I think plus the electric bill is$150 a month or something like that. So, you know, yes, it was an investment. Yes, was it risky? Yes, I had to go for it because I wasn't going to get that opportunity to be right there where my plan was with my construction company to make it happen. Right.

5:31Because I wanted this future for myself. So I need to loop back to today. So just I want to create some kind of financial picture before we go in and look at some of the documents. So we went from a business bringing in$1.5 million to like around$600 ,000, but now four months of no income. So I'm just, explain the decline. With CTC, the company started in 2009, and I came right out of the gate swinging. And we did really well. We were doing, you know,$750. I mean, we were rocking it for most of the time. I mean, the company basically did what it was supposed to do. and I was kind of traveling around the country racing motocross with my son.

6:15So, kind of happy-hazardly. When did it start going down? When did it end? Because you're not doing it right now, correct? No, I mean, I am, actually. I actually just signed a contract this week, and we're doing – and I do consulting work, you know, for different people, and it doesn't pay. Like, normally, you know, I would go, let's say, if I had a large remodel project, if I paid$260 ,000, you know, I would get an additional deposit for 30 % down, you know what I'm saying, and draws upon it. So this is revolving money in the business accounts. So, of course, there's money in there for all things that are needed, you know, saying some materials, labor, infrastructure, phone bills.

6:51Why did it decrease from 1.5 million years to where we are today? Frankly, because my wife passing away was a huge factor. Okay, there we go. The last year before she passed away, excuse me, it was just a very tough time the last two or three years right there. we had worked so hard on something and, you know, I risked a lot to do that because the situation that she was in, my wife had muscular dystrophy. She was full time in a power wheelchair. So our lives were not what most people would consider normal. So what I did was I made our abnormal normal and we acted as if a lot of things that most people would worry about, we would just not worry about, you know?

7:34So if we had an opportunity to go to a national and I didn't have the cash at the time but the mortgage money was sitting there we went to the national the mortgage money taking money from the okay right but you know here's the thing a mortgage payment can be made up that that national it's never coming again the most valuable thing that we have and and i know that we're going to clash on this caleb because i know how you i could see the your your wheels are turning yeah and that's that's the thing is i'm a risk taker all right and i see value in things greater than money and i and i believe that the most valuable thing that we own and we give it away for free every day or at a cheap rate is our time time is the only thing that you're ever going to have in this life that you cannot get back money you can lose it you can get it back love you can lose it you can get it back a child you can lose them you can make another one your time once it's gone it is gone no i mean i i do vibe with that because that is correct this channel is finance based.

8:35So a lot of people think, you know, money over everything when it comes to what I think. No, I think that's a hundred percent correct. Like time is something you can't get back. I just believe also in a balance, making sure that the finance, I'm not telling you that this is the way to do things for sure, bro. You know, but given my circumstances at the time, you know, knowing how I made money, see most people, they can't even handle running a business because they need structure. They need to know that that paycheck's coming in every Friday or the 15th and the first of every month. They need that.

9:05And that's how they balance. And there's a lot of value. You can make less money and be more effective by having that consistency, right? Because you know what's coming in so you can have that balance, but you're never going to get a $250 ,000 paycheck that way. Let me get an understanding of your wealth then real quick. What is in your checking account right now? Your personal checking account. Pennies. Okay. What is in your savings, personal savings? I mean, there's no cash. what are in your in the stock market um i had some crypto and i may have some stocks i haven't looked at in a long time how much do you think i don't know the crypto is probably a couple hundred bucks maybe and it was more than that man i sold a bunch of litecoin at 80 bucks before it went to like 400 or whatever you know but the thing was is i i played it right i went by the 30 percent rule I sold it at a 30 % gain.

9:58Can't lose, right? Well, at least you made money. Yeah, you know, it is what it is. Well, okay, so how much equity do you have in properties? You know, nothing. Oh, that's the one thing I was hoping for. I was hoping for it. I walked away from my house when my wife passed away. You know, one of the things was the crazier things got for us, you know, and you call it reckless. You know, I did what I did to make the things that were bad happening around us in our world stay at bay. Because, you know, there was times when we had money and we would go do things. But once I committed to something, you know, with my son's motocross, I literally went out about that as if it was a career, a job, and we were a professional team.

10:45And does he make money off of that right now? Yes, he can. He's not like one of the guys going to the big Supercross on TV. Well, I was just curious if the investment paid off in terms of return. The investment paid off in a lot of ways. It hasn't paid off in the money. He does go make money. He can go out every weekend and make money racing. But the problem is it's a very expensive sport. So unless you have sponsors that are paying for everything and let you keep your winnings, you really have a hard time. Because whatever you make racing, you basically put back in for the next weekend of racing, And that's if you win or don't get hurt or you don't break something.

11:22It was one of those things that I did because it separated him from everybody else in the world. So at the peak of making$1.5 million in the business, how much would then come into your hands from that$1.5 million? That would be gross. So that was everybody's payroll and everything. I would do$400 ,000 probably. That's so incredible. What scares me is we're at 57. We were having$400 ,000 a year pre-taxes, but there's zero right now. I'm a little nervous because construction, very manual. And I was spending it. I mean, I'm telling you, I was spending it, buddy. And that's what it came down to. I was like, you know, we were investing it in motocross, motorcycles, tires, trips.

12:04And I was trying to build a career for him. And there's more to it. It hasn't paid off, but it's not done either because there's another leg to this whole thing that I've been. There's a master plan, right? And it's crazy, right? But it's something I've been working on for a long time. Do you want to tell us? I mean, well, yeah. I mean, you know, moving myself from being just a worker, right, which I'm really good at, you know what I'm saying? But to being, you know, bigger than that. You know what I'm saying? And in several different ways, I've reached out to it in a whole bunch of different ways.

12:39Moto was one of the biggest ways. We went from being a beginner to somebody that is feared and respected. He went to Loretta Lentz, which is a huge feat. It's probably the hardest thing he could ever endeavor to do. So you guys didn't make money from the return, though. The return. To be clear. Well, yeah. It was more time and experience. It would make money, and it will, because this whole business ties into that, right? Because one of the other legs. The health and nutrition one? Yeah, because it treats injuries at the cellular level, and it also improves recovery time by 70%. With a pre-workout treatment, you'll be back on the bike 70 % faster.

13:16If you work out, if you build muscle, you know, your bodybuilder, you'll be back in the gym 70 % faster. I want to get this thing right now, right, because this has to take care of me and my wife. The nutrition thing, to confirm. Okay. Yes. I want to make sure, yeah, that I'm putting names to what we're talking about because you've definitely been in a lot of different ventures. So, okay. A couple things that are like, I love that you're a hard worker. I love that you're supporting your son. And you talked about being really good at working. I think a muscle that we need to build is being really good with money as well.

13:55I agree. Zero dollars to your name at 57 scares me. 52. 52. Oh, I wrote. 57, I'm sorry. I probably forgot that little final leg. Don't put five on me yet, man. Well, no, no, that actually does make a difference. Because, okay, well, I was thinking like upper 50s, like, okay. I mean, I'm not trying to think of how to say this. What if things do start hurting in the 60s? Because construction is so manual. And that's like you're easy, you know. If you need to go get money, you know how to do that. What are you going to do with$0? dollars and then your known income source that you can take advantage of us there's not going to be a lot that you're going to be able to do with no dollars for sure and i've this one of the reasons that i've been working as hard as i am right now because you know after 35 years of construction my body you know they say you're as good once as you ever was i'm better than i've ever been good once right and i don't need the third or fourth time because that one time it's going to take care of it right yeah but i can't you know my body's changed there's injuries and stuff that comes with time you know so i can't go out there and beat things together with a hammer no more and when you're framing houses which is one thing that i'm really really good at and i'm really really good at math and the mathematics of it and i do a lot of most math in my head and that's something i can do but there's going to be days that i'm the only person standing on that slab and there's a pile of lumber over there that's 15 foot high by 40 foot long and it has to go over here and I can't do it I mean and I'm not going to so okay so what's what's the plan then if we can't do that and luckily there is more time now because 52 uh but if something bad were to happen an injury of some kind what do we do because I don't want you to be homeless do you have you had a home, you sold the home.

15:47Do you have ownership in any property right now? Not that I know of that I would have a deed to that's in my name.

15:59What's your living situation right now? We're holding out in our house. I filed an appeal on the eviction. We are

16:12renting electricity from our neighbor which is very nice. that's another thing that happened that was so stupid you know last year i got a bill in january for 2200 for our electric bill okay and i there's a lot of things that that happened that kind of led to the situation but i call up i'm like how can i have a 2200 electric bill did you guys sign up for the energy rates plan though where it's like supply and demand for the energy rates they I said, sir, you haven't made a payment since February of last year. And I said, horse hockey. I said, it's on auto pay. Never heard of horse hockey before.

16:49That's a new one for me. I'm trying to be nice. At one time, that sucks. That absolutely sucks. And yes, you're right to fight it. But that should not have even been. And it was part of that equation. That shouldn't have been something that made or break you, though, because you should have had. I should have had the money. Well-established emergency fund at the very least. Well, I made a mistake, I guess, doing this project for my friend who passed away. And the fact that I let my friendship get involved. And so normally I would never do anything without my – my contract is pretty solid with my construction company.

17:25And we're remodeling a trailer during the COVID. I can't get anybody to go to Laverne yet to work on a trailer. It was$100 ,000 remodel of a trailer? Dude, I would have charged her$450 ,000. For a trailer? First of all, she had a$70 ,000 or$80 ,000 water remediation claim, which involved removing insulation, two feet of sheetrock up, repairs and all that stuff, flooring, all that. I would just walk away because that doesn't make sense. It's a Sheridan trailer. A brand new Sheridan was about$280 ,000,$290 ,000 by the time you finance it. They go down in value typically, though. I told her, I gave her options.

18:04you know but we went through and we replaced every window we replaced every interior door we placed 100 of the flooring we gave her a bathroom model because my friend who was sick in a wheelchair was gonna have to move into this bathroom so we ada'd the bathroom for him we completely remodeled it and so yeah you know back in 2000 we estimated remodel jobs in an average of about 150 a square foot down in the san antonio area all right homes were selling for anywhere We're from$105 to$126 a foot for a normal house. Okay, so a remodel has to cost more right out of the gate. So if I'm going to go bid a job and look at it in a remodel, I've got to think, okay, well, we're going to start with$150 a foot.

18:45All right, that was in 2000. What is it in 2022? It's$250 to$300 a square foot. Okay. All right. So we're looking at$450 ,000. Have you ever had an emergency fund, a business emergency fund? I've had, yeah. It will happen. Why did that just stop? I mean, this year, basically, everything has been about getting this into the position to start this company. How much did this machine cost for this company? It's$40 ,000. Okay. So, again, that's 10 % of what you'd bring in at a year. I mean, for me, the machine should make$1 ,500 a day. Oh, I hope so. But let's look at your business checking account right now.

19:28I'll tell you, negative$1 ,183. so we're looking at$0 across all the accounts and then all of a sudden we have negative in here yeah and we're actually negative in a couple personal accounts and okay so okay I told you I'm a case brother I'm a case what are these deposits in from your share 81 transfer funds so I have several accounts And so I would boost cash flow to look better by moving money around. And then on top of that, this lady, she never wrote a check to my company all year long. She kept writing checks to my name. So you'd have to deposit it in then for yourself? Yeah, and move it over from my personal account.

20:19It was a pain in the ass. And, well, it's put her in a bad position because now my company would never receive any payment. But that's another issue. So of the 27 that went in, a lot of it was just from you, if not all of it. And then you were taking out like$1 ,000,$2 ,000,$3 ,000, just money just being transferred back and forth. But we're ending with negative$1 ,183, of which$102 for this period were overdraft fees. 204 year-to-date overdraft fees. Yeah, I know. So that was a big thing. So we're just losing money. And they actually refunded a bunch of them into this account. And it helped me correct it back to the$1 ,100 or whatever it was upside down.

21:05I'm not sure which month you're looking at. October to November, it looks like. Yeah. So it was like over$2 ,000 upside down. And they refunded all kinds of fees and all kinds of stuff to me. And a lot of it is, I mean, it's frivolous, stupid spending. um what like on what because it was kind of hard to tell where i was when i was well this whole year basically was funding us being down out of town you know living in a hotel room and working on this other project and that's where most of our money went this year how long did you live in a hotel oh shoot i had well i had uh i think i had like 50 60 000 bonvoy points like 40 to 40 days or something like that.

21:56Okay. And, you know, being out of town, fuel back and forth, whatnot. You know, it's just expenses, man. And, you know, I've got an old lady. She doesn't work really, you know. And so, you know, last year, you know, her son was sick and she was in San Antonio. I couldn't be there. I had to fund a lot of that, you know, just fuel back and forth where she's staying, what's food, what not, you know. And then she came back. She had to finish up school, which she started. So, you know, she hasn't really brought in an income on her own in several years and so I'm paying for all of that too. I don't know if you know anything about having a wife all the time, but they need their hair done and their nails and their eyelashes and stuff like that.

22:36And believe it or not, I consider that stuff to be frivolous expenses. Yeah, so it's frivolous. But I'm here to tell you what. If you live with a woman, you need her to have that shit because otherwise she's a raging maniac and you might as well not live with it. So it's a choice about one poison over another and finding ways to educate her on a way to make it more cost-effective. That's about being on the same page for goals. You know, the thing is, is when she came here, you know, she had a certain idea about the way things were, and I made, you know, I have the ability to joke, man, I work magic.

23:12You know what I'm saying? I can just kind of like most of the time kind of like just kind of make stuff happen. Okay. You know. Well, because you're going to death. Well, yeah, you know, I mean, I could sit around and do nothing and come up with$1 ,500 a week, saying just by who I know, what I'm doing, connections that I've made over the years and whatnot. A little job here, a little job there. But that's not going to pay for anything today. Do you have Cardi Karma on your phone? I do. I do. And I have, what's the other one, Experian I was using? Can you open Cardi Karma for me? It will not be on screen, but I'll take a look.

23:51Just starting over, you know, and, you know, I walked away from my house, walked away from all this stuff, walked away from this, that, all kinds of stuff, you know. I left so much. I mean, I left stuff in the house, bro. I just couldn't deal with it, you know. After she passed away and I was in there in the house, I couldn't do anything. I just couldn't. I couldn't package anything. I couldn't grab anything. I couldn't. That's fair. And, you know, I grabbed what I could and I left. And, you know, I was in more or less the same equity position. I was in when I moved into the place. It was up for foreclosure.

24:25I was in the process of filing a bankruptcy at the time to save the house. And when she passed away, I thought to myself, well, it's going to cost me$4 ,000 a month just to keep the house and no other expenses alone. Do I really want to do that? And I chose to icsnay the bankruptcy and walk away from the house because I didn't really have any equity in the house. Now, if I'd have held onto the house. Because you kept taking liens against it. Well, we kept remortgaging it. Yeah. Yeah. Well, but you know, the thing was is three of those remortgages were like the government programs. One went down to like 1.7 % interest.

25:04And my wife, what she would do is every time that we would get into a jam, she'd push it to the point. And then she would refinance the house. Oh. Yeah. Well, I mean, we're working with a different set of rules. I have a wife that's probably not going to live another 50 years. And, you know, we're trying to, man, you know, you don't have tomorrow. And I know where you're going, right? Yesterday is gone. You're not going to get it back. Tomorrow, you don't have that either. It's not promised. All you have is right now. And so the right now that I had for those 17 years was different than anybody else's.

25:36Sure. And it probably left me in a position overall that I probably wouldn't have been in with different circumstances. Let's think about right now. Where are we at today? Today. 414 credit score. I know. I had it at 650 or 670 just last year. Which is average at best. But I could get money. You could get money at 670. Yeah. So payment history, 95%. So we're missing payments on something. You missed a payment from Lendmark Financial Services, and it's currently late. Uh-oh. And then we have three missed credit card payments there, two missed credit card payments there, and two missed credit card payments on Capital One.

26:14when those cards and see that's just happened because all those credit cards i used them like i would use them pay them off use them pay them off use them pay them off but then you know coming back here in september with a you know dead stop and no income those bills they gradually fell off as the money and then you don't really have the highest um uh caps on these cards 300 for capital one right but your utilization is 141 and then another capital one 500 utilization of 118 and then credit one bank cap of 950 but 110 utilization on that and then 62 on the 650 i would use those cards to because i have a diesel truck it costs about you know 150 to 200 to fill it up depending on what fuel is so you know those cards i would use them till they were maxed and as soon as they one, they give you an automatic reboot, like three to five times a month, right?

27:13I think one of them's three, the other one's five times. So I would literally get an instant, the$500 instantly back on. So, but it was constantly, you know, showing, you know, maxed out, which doesn't look good for the overall credit. And then something about paying this other, I don't know, I did, like I said, man, I don't know if I want you to have credit ever again because we also have$1 ,163 in Sunrise collections and$2 ,888 in National Credit Systems. I mean, what's very clear is that credit is not for you. It just doesn't work for you. You don't use it well. I mean, you're not paying your things and we have 20 accounts open.