Packing your Financial Parachute: Making a Plan for Un-Success

by | Nov 16, 2023 | Avoid Bankruptcy, Consultation | 2 comments

financial-success

Journey of Life

Everyone makes a plan to take off, to journey through life and in the end arrive at your destination: SUCCESS. Success is what our financial advisors focus on when planning for retirement. Success is what accountants and lawyers focus on when setting up a business and executing tax strategies. This is a good plan until you are faced with a detour, until you faced with un-success: situations such as the COVID pandemic, big life events or changes in your business that have a big impact on your finances and your
ability to manage your debts.

What is un-success? It is a detour away from our goals – it is not a euphemism for failure. Success is not a linear path and at times we can get pulled from our goals. These moments are not failures but opportunities for growth and learning. We do our greatest discovery and learning when we get uncomfortable and are faced with a difficult situation which is why “failure” feels inappropriate at best and judgmental at
worst. Planning for detours should be part of your plan for success because packing your parachute will help you land safely, quickly course correcting towards success once more. It is an important conversation to have – openly and early – before you are struggling, before the stress, and before you need to pull the chute.

Packing your parachute is all about:

  • Maximizing assets that are protected from your creditors
  • Minimizing exposure to creditors moving forward
  • Structuring income from the business to protect shareholders
  • Strategizing your creditor payments to ensure you keep on top of debts that will have personal implications for the directors of the business

By packing your parachute, you can:

  • Land safely and quickly course-correct towards success
  • Avoid the sale of assets that are already protected from your creditors
  • Avoid inadvertently putting yourself in a worse financial position than even bankruptcy would require
  • Act quickly which will give you more debt restructuring options and help you work towards avoiding a bankruptcy or proposal

This month for financial literacy I would love to talk about packing a parachute with your Chamber members, to help open the conversation about financial difficulties and that these moments are more common than people think and it is what you do with these moments that really counts.