Updated: Mar 9
In 2001 I left my well paid, secure job in the corporate world to start my own company. The first few years were very stressful leading to many sleepless nights. I would wake up at four in the morning thinking of all sorts of scenarios that could lead to me losing my business, my income and my house. With young children, a home mortgage and a substantial business loan that I took out to buy my first premises, I had to find a way of managing the stress and thinking clearly about things. I noticed that things never seemed as daunting during the day as they did in the darkness of the early morning and I discovered a method of overcoming the stress and fear that I have been using effectively for almost 20 years now.
The first thing I did was to write down, there and then at four in the morning, the scenario that was going through my head and keeping me awake. Analysing it in the cold light of day I would invariably find that I had left out many positives and focused only on the negatives. For example, you might tend to focus on the fact that you owe $500k for a building but forget about the fact that the building is actually worth more than that and you can always sell it, pay back the loan and start over if things really do go pear shaped. I kept a list of these scenarios and discovered in very short time that the majority of them were related to my financial situation.
So, I developed what I called my Financial Snapshot - a one page spreadsheet. In the first column I listed everything I owned in tangible assets (bank accounts, savings, cash, etc.,). In the second column I listed all my debtors - the people whom I had invoiced and who still owed me money. In the third column I made a list of all my work in progress - projects I knew I would eventually get paid for but couldn't yet invoice. And finally, in the last column I listed all of the outgoings for the next thirty days. This included mortgages, staff salaries, supplier payments, etc. I added up the totals of the first three columns and subtracted the total of the fourth column giving me a number that I called my 'Net Current Position'. The number was always much higher than I would have believed at four in the morning and allowed me to go to bed knowing that nothing disastrous was going to suddenly happen overnight or indeed in the next thirty or even sixty or ninety days. Anytime I awoke early after that I would just focus on the net current position and not allow any negative thought sequences to start building up in my mind. It has worked well for me - it may not work for everyone. But the critical thing to do is to write down what's worrying you, confront it in the daytime, analyse the probability of it happening (starting with the worst case), and develop a contingency that will allow you to take back control if certain unpredictable or uncontrollable events do come to pass.
Another useful exercise is to try to identify at least five positives for every negative thought you have. For example, if the negative is owing the bank $500k, the positives might be; The building is worth more than I owe, I can generate income from it as a place of business, I can generate income from it if I rent it to another business, I can depend on it as part of my retirement fund so I don't have to contribute as much to standard funds and I can always use it as collateral for future borrowings once I pay off a chunk of the loan.