Light in the end of the tunnel

In my last summary of March 2014 that can be found here I brought up that I started to see the light in the end of the tunnel. That was wrong. The rug has once gain been removed from underneath my feet. I have not spoken much about it besides from mentioning decreased salary etc. but this time I will be more open about it and explain more in detail.


I have since June 2013 received a gross salary of 1600 euro (net around 1100 euro), which means that I would be making a lot more money working as a waiter here in Berlin even without including tips. Nothing wrong with being a waiter but after spending 10 years at a University I as hoping for slightly more. I decided back in June 2013 to half my salary so that I would not be forced to fire any employees. If I would not have done that then we would have gone insolvent already in August 2013. The CFO as well as my business partner of the company dug his head into the ground and I guess also prayed to God because he is very Christian that things would solve themselves. I do not believe in things solving themselves and I made all the necessary calculations and cuts to make sure that my company would survive.

We did survive the month of August 2013 which was back then the big problem and the hurdle to get around. Things were going pretty smooth the entire Autumn and the light in the end of the tunnel was getting bigger. I stayed down on my gross 1600 euro to try to build up a buffer in the company again and happily my life is so frugal that even at that silly salary I did manage to save money and to keep investing. In Sweden several bloggers have currently a cheap month competition. When I look at my own life then the food per day costs less than 3 euro, I go everywhere by bicycle (rain & thunder, snow and ice matters not) and that is simply my normal everyday life. I honestly do not know how to make it one step more frugal.

In the beginning of January 2014 we had managed to build up a buffer of three month salaries which is pretty good for a small company. That was when the second bomb-shell dropped. 2012 had been a really excellent year for the company and the rule is... never have a bad year after a good one... we happened to have exactly that. So all the taxes arrived in January 2014 and ate up all the buffer that I had managed to build up in the company. Even worse is probably that my CFO and business partner called me completely surprised in January telling me about the tax bill that had arrived that took those salaries away. I mean... a CFO not knowing how much taxes we would have to pay. It also became a wake-up call to me that I can not leave those things in his lap alone.

So once again we were back at square zero and a solution had to found for how to pay the salaries of the employees in January 2014 and onwards. I once again managed to find a way which brought in enough money to the company for paying employees and my tiny salary during January, February, March and April which included pushing pre-payments for product sales to new clients etc. and the second time of my company going insolvent could be avoided. The problem was however shifted forward by using pre-payments to May upon which we knew that we would, over a project we are involved in, receive sufficient money to keep us floating for another three months and after that we would be safe once again and I would be able to go up to "full" salary. Full salary still only means a gross of 3400 euro and out net around 2000 euro which is nothing based on my educational level and the country I am in but this is the road I decided to take when I started my own company.

As I wrote in the previous summary I started to see the light in the tunnel.... I had managed to avoid two occasions of going insolvent in the last eight months and had a very clear view of when the light in the tunnel would become brighter.... that changed once again... within three hours yesterday we received bills in the amount of one months salary for my employees. Those bills include useless bills to patent lawyers as well as extra taxes due to a re-booking from our tax attorney for 2011. This means that I am once again back at square zero and I have to find a way to be able to pay out salaries in the end of this month. I know that I will find a way (to at least pay them... myself will be another issue) and I know that my company will survive but I start to be tired of fighting. Every time I manage to get us back on our feet we are being beaten down again. If it is not from taxes, then it is from patent lawyers or from customers that are not paying the bills as they should.

That my company has been and still is on the boarder of going insolvent for the third time within ten months simply is hard to cope with especially since it is a double failure. In the sense of me not being able to keep the company running that I started six years ago as well as me directly being without a salary, a job as well as not receiving any unemployment money if I do fail with it. I have no security nets. It simply drains my mind, my will and my energy. Yesterday was a bad day.

To add on top of this all...the love of my life and I are trying to move in together in a larger apartment which means that I will privately have some larger costs arriving within the next months due to the move. As always I do not want to sell shares in the companies that I own but I doubt that I will be able to make any new investments for the next couple of months since I have kept almost no buffer and I have invested any excess money into shares in companies.

What is additionally funny here in Berlin is that if I take my girlfriends apartment and add that together with mine we would have a three room apartment with 94 m2 in a good location of Berlin at a total price of 780 euro per month. Trying to find that as one apartment instead of two here in Berlin seems to be almost a mission impossible.

Sorry for the long ranting about my private life. I hope that you will forgive me. One day I will learn a lesson from all of this and I will become a better and more efficient CEO, investor and person but at the moment I am still trying to work out what that will be. Strangely enough hard and bad times that you go thru as a person is in Europe is not being acknowledged as a great source of knowledge and learning as it often is in the US.

I know there has been even scientific papers published about how a person learns the most from positive experience and little to nothing from negative ones and all I can say to that is that it is bunk. The downside on the negative results simply could not have been large enough during these scientific investigations because if they would have been then I am certain that things would have been learnt and the American opinion that negative experiences are highly important is simply correct and to allow people to fail and to move on is also correct. There we in Europe have to learn from the Americans regardless of what the "efficient market" similar publications in various fields are telling us.