You Can’t Make Chicken Soup out of Chicken Poop

You Can’t Make Chicken Soup out of Chicken Poop

Unfortunately, this is sometimes the line I find myself telling people in poor financial shape. If someone is at the point where they need to stop working, and they haven’t saved much, they’re looking at living a very modest lifestyle. The longer my career goes on, the less I seem to encounter this, but every once in a while someone will come to me with a modest sum of money hoping that I’ll be able to grow it at an unrealistic rate of return. If you think about, I don’t think that there is anything ironic about those with the least being most comfortable with losing money. The best way that I can confront this is to gently let them know that it’s not possible to create chicken soup out of chicken poop.

It’s perhaps not very nice, but sometimes I feel that the best thing I can do to help someone is to give them a straight forward opinion based on all the reality I know. Otherwise, my fear is that they’ll knock on some other financial advisor’s door who will promise them the world and put them in an even worse situation. The strange paradox that I’ve found as a financial advisor is that people with the least amount of money seem to take the most investment risk. I’ve found many people tied up into extremely long term investments without liquidity – at all. I’ve found people shift all of their cash which has been dolling away in CDs over to a speculative investment. I’m not totally sure why this is.

To me, when people are in financial dire straits, the best approach is to face the brutal facts. If you can just be honest and real about the facts it is the beginning to a solution. If you can’t face reality, any solution is only going to be partial and often temporary.

Almost six years ago in May of 2009 I found myself, much to my embarrassment as a financial advisor, in such a position. To put it in context, when you do what I do, your income is very much tied to the stock market. Particularly in whether it goes up or down, but more so in whether or not people are investing money in it. Between October 2007 to March 2009 the stock market went down by 57% which was approximately how much my income had dropped. I was in my late 20s and was flawlessly responsible with money. I had never been so much as a day late on any payment, ever. My credit was clean. I had done all the right things and did them early. At the ripe old age of 23 my (ex)wife and I bought our first house. At age 26 we bought a rental property to also build equity. I was maxing out my 401(k) – not maxing out my credit cards, mind you, as so many of my generation were at the time in those pre-Financial Crisis days.

The Financial Crisis was highly stressful. My income was going down fast. But throughout all of this I held on and kept my credit intact and was never late on anything. The value of our two homes went down about 20% and we were “upside down” (meaning we owned more than the house was worth, even though we had been responsible and didn’t get the crazy mortgages available at the time). We were also having to deal with renters who had been laid off from their jobs and were not making the rent payments.

It was highly stressful and to top it off, in May 2009 my wife quite unexpectedly told me that she wanted to divorce and be on her own. I resisted for a while and then we began the divorce proceedings. I quickly found myself in a position where I had to pay a, we’ll just say “very large” monthly payment to my freshly minted ex-wife. It was unquestionably more than what I could afford with everything.

So, I looked at the whole situation. I looked at my homes which were under water. I looked at my income which was down. And I, according to my own advice, faced the brutal facts and did what was unconscionable to me: declare bankruptcy and let the houses go to foreclosure and wipe the slate clean. In May 2009 my credit was flawless without a single late payment. Six months later I declared bankruptcy.

In hindsight, knowing what I know now, I regret it. I could have fought through it. I didn’t know that my income would improve when the stock market improved. But at the same time, I look back at how I felt at the time. I was emotionally destroyed and heartbroken. I think that pushing the reset button financially was what I needed so see a new dawn on my life.

On the other hand, I think it will always drive me crazy that as a financial advisor I found myself in this position. In hindsight, I’m not sure that I really make financial mistakes that I could have known were mistakes at the time. What pushed me over the edge was a divorce, pure and simple. It was the one risk aspect that I really have never taken into account. The interesting irony to me is that objectively speaking, I know that I am a far better financial advisor having been through this experience. I’ve given my financial advice speaking from this very personal experience.

And as I say, sometimes in life you must face the brutal facts and realize that you can’t make chicken soup out of chicken poop and the best solution is to stop trying and see what other options may make better overall sense and make a really hard decision.


Investing in securities is subject to risk and may involve loss of principle.

Chad Gordon is registered with, and securities are offered through LPL Financial, Member FINRA/SIPC. Investment advice offered through GreenStar Advisors LLC, a registered investment advisor and separate entity from LPL Financial.