1. Pay off debt as quickly as you can. When you're broke again, you'll be grateful you did.
2. Never put all of your eggs in one basket. When you only have one or two major sources of revenue (or clients), you're as dependent as an employee, but considerably less secure.
3. No matter how unnecessary it may seem, have a real, legally binding contract for any work you commit to do. I thought I did. I was wrong.
4. Budget for marketing. You can't depend on viral marketing alone.
5. Have health insurance. It's expensive and you can't afford it, and I know you're young and healthy, but when your appendix decides it's time to come out, you'll be on the hook for about $22,000.
6. If you're working from home, set boundaries. I won't work past 8pm, and I try to take one day a week off.
Ideally, you'll have some brilliant idea, already live frugally, have no debt, and a craft a bulletproof plan. Realistically, nothing can prepare you for the experience.
And as someone else commented on another thread here, in the last month or two: An insurance company will likely negotiate much lower charges that you can get as a private individual (in the U.S., at least). Even if you are left with part of the bill to pay, that bill is likely to be significantly smaller than it would have been were you uninsured.
Personally, I think this is awesome, but it also should serve as a warning to those that are afraid of financial troubles. Most people who go this route truly do have to risk it all, so if you arent ready for that you should find a way to transition. For me -- living on the cheap while doing your own thing is great, and the only way to really motivate.
But for everyone else, as long as you can get over the ego parts -- you will have to give up going to nice places for dinner, driving nice cars, having big houses, new toys, vacations etc, all the way to bankruptcy, as you said -- then it is worth it.
Skydivers and extreme sportsman seem better at signaling  risk than nerd entrepreneur. That's a big reason they're better at attracting women too.
You're broke, but have "two rental properties and a condo"? It sounds like you have room for lowering your expenses.
I think the blog post is a bit in denial because you haven't really said anything about any future out comes you see happening next.
What is the credit card debt? How much do you think you'll make on the book after publisher fees/whatever other costs. The web 2.0 service is cool does it have any plan for profit?
Congrats on the engagement and doing your own thing, I just wonder if you'd do it all over again or if you'd try and bootstrap your own efforts more so that you could avoid the financial black eye ya got here and still make something your truly passionate about.
I am not sure I can discuss the book fees but it is not substantial. Probably enough for 2 or 3 months of living expenses.
Credit card debt is huge. Think of a number. Then double it :)
Yonkly is already profitable. It covers its operating cost and more.
Focus on your cash flow. You need to be able to service that debt and pay for your cost of living. If you don't want to take a salaried job, start focussing on your consulting gigs. Preferably, find gigs that pay more. If that's not enough, take more of them (but be sure you can do the work).
I wish you luck. But it sounds to me like you're starting to realize you're in over your head and you're a bit shell shocked. I've been in your shoes, and I had to make some tough choices that involved temporarily moving back in with my parents until I got my finances under control, and working my ass off to the point where I barely got enough sleep. Thank goodness I didn't have mortgages to carry though.
I just had my one year anniversary six days ago. Oh how time flies. I left the military to venture out on my own, finish graduate school, and see what happened.
I'd love to tell the rest of the story but I have to go catch a train. If you get a chance, consider writing about the ups and downs of the process. I know in the beginning it really ate me that I wasn't making progress fast enough. Time, progress, and a sweet spot for pain helped :) but yeah... its an interesting process.
Major props for laying the story down, not enough people do that.
Overall I still feel you need 1 or 2 more bankable deals under the table to help you pay off the debt and getting back into the green of things.
Luckily you got into the ad model biz when you did because that is a dying model of profit. Covering operating costs and groceries is good but you should probably try to weave it into a sale or use it as a spring board to get a consultancy gig. Meanwhile the book keeps you a bit above water but well.. you're outa ammo.. start working on book 2 asap and get some additional green in that door or the stress of debt will eat the love of your life.
i just don't feel like filing taxes this year
Great story and congrats on your engagement!
For instance, the site doesn't quickly drive home why I need your service. It kind of muddles around. If you tightened things up, starting an affiliate program, did some AdWords, etc. you might be able to focus on the project 100% once it pays the mortgage.
Google 'yonkly' -- it's strange what it comes up with. That type of thing needs to be fixed. Just a couple ideas, hope this helps -- I launched my web service last month and we are already ramen profitable.
I googled Yonly and everything looks. What exactly are you referring to that needs to be fixed?
Yonkly - Create your own network
stephp elmagnifico domnanou wmshaxpere yonkly eibrahim venturedig troygoode eonian ... domain yonkly chinese sbepstein allenwang allenwang1981 rmarley ...
I'm guessing that these are usernames of your users, but I'm not sure why they're being used as your Google description. See if you can fix this and replace it with a description of what Yonkly is, and I'd bet your search engine traffic will increase dramatically
Maybe if people had revenue sharing or just the ability to monetize their, um, "yonks" they could have enough incentive to make the service take off.
I like the ability to show a thumbnail in the posts.
Where are you hosting your site? Are you hosting at Dreamhost (whois data)? I don't see anything on their site about ASP.Net apps. If not, where are you hosting it or are you doing it yourself in a data center?
On the plus side, it proves what you want to do is achievable, right? Make program, improve lives of customers, get paid for it.