Paying $20,000 of debt with indie app earnings

Summary

In a heartfelt stream, the speaker shares their journey from overwhelming debt to financial recovery, highlighting the life-changing moment when they received a significant payment for their apps. After years of struggling with over $200,000 in debt, defaulting on loans, and facing a painful personal crisis, they discovered app development as a creative escape. Their successful apps led to a new business model, helping them pay down debts. However, they learned hard lessons about financial management, including the dangers of personal guarantees on loans. Now, they emphasize living debt-free and making smarter financial choices.

Takeaways

• 💰 The speaker received a significant payment from Apple, marking a turning point in their financial situation after years of debt.
• 😓 After four years of struggling with over $200,000 in debt, they are close to becoming debt-free, which has brought immense relief.
• 📉 The speaker's financial struggles began when they defaulted on a loan, leading to a downward spiral in their personal and professional life.
• 📅 The initial success of their bespoke web development business turned sour due to increased competition from affordable website builders and a lack of growth.
• 🤑 Lowering prices to attract clients led to working longer hours for less revenue and difficulty in collecting payments.
• 💳 The speaker took on more debt to maintain their lifestyle, which resulted in a precarious financial situation involving shuffling loans and credit.
• 🚗 The repossession of their cars marked a significant point in their financial downfall, demonstrating the consequences of secured debt.
• 📱 In 2020, the speaker began creating apps as a passion project, which unexpectedly turned into a viable business model to pay down debt.
• 💡 Selling apps became a crucial strategy, with the value of an app determined by its annual revenue, allowing for significant debt reduction.
• 📝 The failure to report tax income led to an unexpected tax debt of $670,000, highlighting the importance of financial responsibility and awareness.

Q & A

What significant financial change did the speaker experience while live on stream?

The speaker received a payment from Apple for their apps, marking the largest amount they have ever been paid, which was life-changing as it allowed them to pay off a significant portion of their debt.

How long had the speaker been in debt, and what impact did it have on their life?

The speaker had been in debt for four years, which significantly affected their life, including their ability to provide for their family and overall quality of life.

What was the speaker's initial business, and how did it perform for the first ten years?

The speaker initially created bespoke websites and software solutions, which were successful for about ten years, generating steady income and a sense of security.

What caused a decline in the speaker's business around the early 2010s?

The speaker faced a decline in sales and client acquisition, leading to reduced revenue, prompting them to lower prices to attract new clients.

What mistake did the speaker make when lowering prices for new clients?

By lowering prices, the speaker attracted clients who did not value their time, resulting in longer hours for less revenue and difficulty in getting paid on time.

What financial strategy did the speaker employ to cope with increasing debt?

The speaker began taking on more debt to maintain their lifestyle and service existing debts, which led to a cycle of borrowing and accumulating more debt.

What event marked the turning point in the speaker's financial struggles?

In 2019, the speaker defaulted on a loan, which resulted in losing access to credit and brought their financial situation to a critical point.

How did the speaker start to turn their financial situation around?

In 2020, the speaker began creating and selling apps as a side project, which unexpectedly became a successful venture that helped generate income.

What lesson did the speaker learn regarding tax responsibilities?

The speaker neglected to file tax returns for three years while generating income from app sales, which resulted in significant tax debt once they attempted to file.

What advice does the speaker give to avoid their mistakes related to debt?

The speaker advises against taking on excessive debt, living beyond one's means, and being a personal guarantor for loans, emphasizing the importance of financial education.