An old derelict grain mill down by the river is being converted into apartments. You attend the sales exhibition at the weekend. Nice wine and cheese, glossy video clips and brochures, big smiles, power suits, confident sales 'executives'...

It’s a daily occurrence now that I am reading about people who have ‘over-extended’ themselves.

Financially.

The tiler/plumber/builder/plasterer/solicitor/banker/financial adviser was making a nice and steady income for years. Save some, spend some. Few beers at the weekend. Fridge always full. Bills paid on time. Nice car. Foreign holiday once a year.

Sadly, one thing leads to another. Maybe it’s because the neighbours, the infamous Jones, started it. They inched forward and grabbed a steal on you. They had a second car. They holidayed twice a year and also had a caravan in the South Coast for weekends. Those weren’t trappings that you could squeeze out of your meager earnings.

Soon you hear about an opportunity.

An old derelict grain mill down by the river is being converted into apartments. You attend the sales exhibition at the weekend. Nice wine and cheese, glossy video clips and brochures, big smiles, power suits, confident sales ‘executives’. Highly impressive numbers and breakevens...

“...for example let’s say that your property appreciates by ONLY 8% per annum for the next 5 years”.

You’re sucked in. £1,000 booking deposit down and 3 months later you have just bought a property off plans. That doesn’t exist yet. You bought a promise. You bought a dream.

And you got lucky.

You flog the apartment (that still doesn’t exist yet) another 6 months later.

You’ve turned around a profit of £25,000 in 9 months.

You’re in the game and there’s no turning back.

I don’t know who started it, but I suppose we all decided to take that step too far, some more than others.

I know a school teacher. He teaches 6 and 7 year olds. He goes in every day at 8am and leaves every day at 3pm. He teaches sums, reading, geography, art, music. And through the calendar year he gets 15 weeks off.

He also owes €3mio.

He too got in the game. And there was no turning back.

Chasing the property dream. Now he is the one being chased. Alas he has no assets, but he has one dark cloud over his head.

There are my obvious chestnuts of advice such as the main one of them all:

always spend less money than you have, which sounds so simple but how often is it executed?

Sometimes the most valuable lesson can best be encapsulated in a story...

I stumbled upon a little gem that is both charming, and also breathtaking in it’s simplicity.

Most importantly though, it delivers a resounding message to us all.

I call it:

The parable of knowing when you have enough.

An investment banker stood at the pier of a small coastal Mexican village when a small boat with just one fisherman docked. Inside the small boat were several large yellowfin tuna. The banker complimented the fisherman on the quality of his fish and asked how long it took to catch them.

The fisherman replied, “Only a little while.”

The banker then asked why didn’t he stay out longer and catch more fish?

The fisherman said he had enough to support his family’s immediate needs.

The banker then asked, “But what do you do with the rest of your time?”

The fisherman said, “I sleep late, fish a little, play with my children, take siestas with my wife, stroll into the village each evening where I sip wine, and play guitar with my amigos. I have a full and busy life.”

The investor scoffed, “I am an Ivy League MBA and could help you. You should spend more time fishing and with the proceeds, buy a bigger boat. With the proceeds from the bigger boat, you could buy several boats, and eventually you would have a fleet of fishing boats.

“The investor continued, “And instead of selling your catch to a middleman you would then sell directly to the processor, eventually opening your own cannery. You would control the product, processing, and distribution! You would need to leave this small coastal fishing village and move to Mexico City, then Los Angeles and eventually New York City, where you will run your expanding enterprise.”

The fisherman asked, “But how long will this all take?”

To which the banker replied, “Perhaps 15 to 20 years.”

“But what then?” asked the fisherman.

The banker laughed and said, “That’s the best part. When the time is right you would announce an IPO and sell your company stock to the public and become very rich. You would make millions!”

“Millions. Okay, then what?” wondered the fisherman.

To which the investment banker replied, “Then you would retire. You could move to a small coastal fishing village where you would sleep late, fish a little, play with your kids, take siestas with your wife, and stroll to the village in the evenings where you could sip wine and play your guitar with your amigos.”