Addictions of all kinds lead to problems with your relationships, career and yes, also your money. Beau Humphreys is a blogger at Invest Wisely and host of The Personal Finance Show. Beau leads us through the story of his gambling addiction and how it affected his finances. Plus how he was able to overcome his problems and how others can get help for their addiction.

Welcome to the Maple Money Show, the podcast that helps Canadians improve their personal finances to create lasting financial freedom. Do you know that on average, Canadian have over $24,000 in high-interest credit card debt? That’s why our sponsor Borrowell offers low-interest, personal loans online up to $35,000. Thousands of Canadians have relied on Borrowell for their personal loans. The average Borrowell borrower saves $4,812 in interest. To see what you can qualify for, head over to maplemoney.com/borrowell. Now, let’s chat with Beau…

Tom: Hi Beau, welcome to the Maple Money Show.

Beau: Hey Tom, good to be here.

Tom: Thanks for being on the show. I really wanted to have you on because you’ve got a unique story that I’ve never really heard from anyone else in the personal finance space. Just to hop right into it, you were addicted to gambling. Can you go all the way back to the beginning? How did that first happen?

Beau: It actually goes back to when I was 11 years old. I had a 20 year gambling addiction from age 11 to age 31, 1991 to 2011. I say that because my first incident was when I was 11. I had saved some money and wanted to buy a Super Nintendo, but it was from the States. I had calculated what the exchange and the shipping would be but I still needed my parents to do the order for me because I was only 11 years old. But they weren’t really into me spending that much money on one thing, especially through mail order. They just weren’t into it at the time and I got upset because I planned this whole thing. So I went to the mall with my friends and just started blowing that money on lottery tickets. And I was able to get the lottery tickets because they were still pretty lax. I could say I was getting them for my mom or something like that. The retailers would say, “Whatever.” They cracked down on it a little later but at that point it was still easy to buy them. Over a period of a week I ended up spending that whole $300. There were a couple of little wins in there but I basically just got the taste. Throughout high school I was just on the side doing whatever I could; poker games, buying more lottery tickets… It was just in my head. It drove everything I did and I didn’t realize it.

Tom: I know what you mean with the scratch tickets. I remember having them. I don’t remember if I was buying them for me or if I was legit buying them for my parents but I certainly remember buying them.

 

Beau: But you remember buying them, right?

Tom: Yeah.

Beau: You were in a different province too, right?

Tom: I was probably in Alberta, possibly in the North West Territories. I can’t remember.

Beau: You probably even had different laws and younger ages than I did maybe.

Tom: Yeah. So this is all while you’re still underage?

Beau: Yeah. I’m building it up and it’s bubbling. By the time I turned 18 and I could get a credit card, online casinos were exploding. This is between 1998 and 2000. There were thousands of casinos; they were just exploding on the internet. I’d hate to say it was a perfect time, but it was the perfect time for me—for my addiction to just take off. It sounds as though I’m making it a career or something but that’s how it felt. If there wouldn’t have been online casinos I don’t even know if it would have happened in this way.

Tom: A little too convenient compared to everything else?

Beau: Yeah, that’s it. So, I go to university and I’ve got this emergency credit card from my parents and I went to town. I just lost it because I was uncomfortable at university. It was a new experience. I still don’t know why I was gambling. There was no introspection yet. There was no exploration to figure out why I was doing that, why I was feeling that compulsion to just spend this money. I think I probably thought at the time that I was good at it. I can do it; I can win money if I just keep going. And I maxed out that credit card. That’s when my parents kind of stepped in and figured it out and I started therapy. But it was a long 10 years after that of trying to figure stuff out.

Tom: I can see how this could become addicting if you did have a few small wins where you see that you’re up $1,000 or something like that.

Beau: That’s it.

Tom: So you just want to keep doing that. I never had this problem because every attempt I ever had at gambling has been an absolute fail.

Beau: You’re one of the lucky ones.

Tom: Exactly. It’s made it so boring for me. My wife and I went to Vegas, put $20 in a machine, lost it and I said, “Okay, let’s not do that again.”

Beau: Well, you’re lucky. By being unlucky, you’ll be lucky the rest of your life, right?

Tom: Yeah, for sure. I can’t even understand how people get so excited when the lotto is at a large amount; everyone needs to go buy a ticket on it. You know your odds are so terrible—

Beau: Just to speak to that, I’m fine with people who gamble responsibly. If you have extra money and you want to go and have some fun, fine, go do that. It’s not like gambling is the Devil. It was for me because I was not meant to do that. But the argument they would have is that somebody is going to win, right? And maybe it’ll be me. But also, maybe you’ll get struck by lightning too, so—

Tom: I guess I am guilty of 50/50 tickets at hockey games and football games with that same theory you mentioned. I will literally buy one ticket.

Beau: You’re not buying a lot, yeah.

Tom: If I at least have one in the game, it’s just as exciting for me as if I had spent $100 on it.

Beau: In that case, even though the odds aren’t very different, it does seem like they are because there’s only 10,000, 15,000 or 20,000 people. You can see all of them, right? Even though it’s still small, the odds are still the same.

Tom: I still have the same win/loss record. I’ve never had a real win on anything gambling so that’s made it easy for me. But I totally understand the idea you have, especially at a young age. If you started winning or even if net you were in the hole, I could see how that would keep biting at you. Similar to how people think about investing and this idea of chasing loses—they say, “Well, I’m down but I’m going crack that.”

Beau: Oh, I’ve sat in gambling therapy groups with people of various ages and some are still chasing their losses. The only reason they’re not destitute at this point is because they have accepted getting an allowance from their spouse. They have a really strict money control and when I heard them talk about that, I thought, I don’t ever want to live that way. There’s got to be another way to figure this out rather than just have someone give me the amount of money I need for the day and that’s all that I have. That’s not a way to live, in my opinion. You’ve got to work on the problem that is causing you to behave this way. It became less about winning for me—this is my comfort zone, my coping mechanism for being uncomfortable with life. That’s when I started working with counselors to figure out what that was, exactly.

Tom: Yeah, it sounds like your way is closer to truly being cured. But you’re right, if someone needs that though, it certainly is better than making things worse.

Beau: Stop gap measure, for sure. It’s for the interim.

Tom: But it’s not truly fixing anything.

Beau: No, it’s not.

Tom: You mentioned getting help. Can you go into that a bit?

Beau: Yes. I guess I can only speak about Ontario but I think all the provinces are similar in this; the Canadian Association of Mental Health (CAMH) has a problem gambling program. We didn’t know immediately that it was available. This was in early 2000 when I had my first real relapse in the thousands of dollars. My parents just wanted me to get therapy so I did. They just thought maybe I was depressed or anxious so they would prescribe me something. This was just general counselling. But, when it started to become a little more recurring where I’d have another relapse or I would start sneaking around. Then we found out there was a problem gambling service CAMH in Toronto so I started going to a counselor there. I worked with him for about 10 years from about age 20 to 30 to figure out what was going on.

Tom: Is this free counseling?

Beau: Yes, it is. If you have an addiction, you can get free counseling as opposed to if you’re just exploring. If you’re depressed or other things like that, unfortunately, you have to go and pay for a counselor. I think addiction gets a lot of funding because it can be life-ruining. Not that depression cannot be, but it’s more of a—I hate to say mainstream, but it is, and it doesn’t need as intensive therapy. And maybe it can be solved quicker for some people. But that’s a really good point. If somebody needs counseling for anything, especially if they’re having trouble with their life, I feel like that should be covered as well. I feel lucky that mine was.

Tom: I’m just guessing but I was just wondering if it was funded by different provincial lotto’s because I think I’ve seen it at the bottom of tickets where it says, if you have a gambling addiction, call this number or something like that.

Beau: Yeah, there are a lot of organizations for this. I just happened to end up at the Center for Addiction and Mental Health which is good because when we eventually worked on it and figured out what was wrong with me, I just walked down the hallway and got a prescription or I got the psychiatrist to check me out. It took a while but we stumbled on the fact I may have attention deficit disorder.

Tom: Oh, okay.

Beau: You know, it manifests in different ways for different people. For me, I was just afraid of everything. I couldn’t get things started. I couldn’t get things finished. I couldn’t focus which was obviously one of the main things. Just fear of new things and new experiences because you just don’t know how to handle it. You don’t have these mechanisms that everybody has built-in, and you’re unable to build them up either from when you are a kid. When they thought I had this, I took a test and they sent me down the hall to the psychiatrist at CAMH and she gave me the real test. And she said, “Yes, let’s start you off on some medication,” and it changed my life. It was like night and day because I really just hated my life. I didn’t know how to express that to everybody. I didn’t know why, I just felt like everything was just, wrong. You have this potential maybe that you could live up to but you can never get there so you’re always reaching for the thing that is you but you’re missing the thing you need to get there. It was like a break in my brain. The medication kind of connected that break. That, plus cognitive behavioral therapy and some mindfulness and stuff like that all started turning me around.

Tom: That’s good to hear. You mentioned credit cards really started to make this a problem. Can you go back into that a little bit more? How the debt piled up and maybe what the hole was and how you got out of that?

Beau: Yes, so before we even figured out the Attention Deficit Disorder (ADD) thing, I had got myself into heaps of credit card debt. I think I had eight credit cards at the same time at one point.

Tom: Wow.

Beau: The reason I probably had eight at the time is because a couple of them would have awesome balance transfers and things I could use to avoid these crazy $600 to $800 a month payments that I would have had to make. And those would be minimum payments. At the time I think it was 2.1 percent minimum payment back then. I think it’s different now. But I had all credit card debt. It wasn’t as though I just had a cheap line of credit and this or that. I had some promotional rates but at a certain point they were all expiring. At one point I was sort of “rocking” at one, chasing loses. I definitely started doing that, but it was something that I just needed to keep doing in order to cope because I didn’t know what was wrong with me yet. I was just trying to find the money… I even got an inheritance. And this is probably the worst thing. I got an inheritance from my grandparents and the best thing I did was take half and put it on my line of credit from school to pay that down because I couldn’t access that anymore. The rest I just blew, like I did everything else. So imagine you have these great earning years and this great compounding time and not only are you not investing that money but you’re wasting it. And then wasting more money. I had negative compounding and here I was in my 20’s. I only started catching up in my 30s. The only good thing is that I was still able to build a career in the day time. By day I’m trying to be successful but the only way to do that was to offset the coping with gambling. So I was trying to build this normal life—what I would consider to be a normal career in finance and business and I’m wasting all my money on the side. Eventually, my salary increased and I was able to get there. So, by 2005 I was about $40,000 in debt. There was a day when I had won $20,000 and lost it in the same day. I thought, “Oh, all my problems are solved,” and then immediately they weren’t. It was crazy.

Tom: To deal with this debt, did you end up paying it off or did you go bankrupt? And, was this before or after dealing with the addiction?

Beau: Winning $20,000 in a day and losing it immediately, that’s what made me realize that whatever part of my brain was still thinking I could gamble my way out of this, disappeared that day. I realized I was never going to get out of this by gambling. I had just won the jackpot that I was always thinking about and immediately upped my bets and lost it all. That kind of cemented in that it’s the insanity thing—you can’t keep doing the same thing and expect to change. I was just gambling more to try to stop gambling. It didn’t make any sense. At that point I started to—I guess I kind of coasted a little bit because somebody was watching my money for a couple of years. Then I figured out the medication and that kind of flipped my brain a bit too. I was making about $40,000 at that time and I was $40,000 in debt. At that point you’re never going to be able to pay that off organically. It’s never going to go away and it’s going to keep building interest. So I looked into what my options were and discovered bankruptcy. On the same site I was reading about bankruptcy, it said if bankruptcy was too much there is an alternative; consumer proposal. That’s where you basically propose to your creditors a smaller amount than what they’re going to now, but bigger than zero which is what they would get in a bankruptcy. You have to go and sit with a trustee to do this. They put together a package. It’s all court documents, legal documents—it’s a government program. The trustee’s are licensed to work on your behalf. Not all of them do this, so be careful. Some of them charge you upfront while others do some shady things so go to a trustee if you’re looking into this. They put together a package for me which took my $40,000 down to $15,000. The interest is gone. They actually take on the responsibility of the debt and pay the creditors slowly over the period of payback. So I had to pay $300 flat over the next 50 months for $15,000 total. When that 50 months is done then my proposal is cleared, all of my creditors are paid off. The trustee takes their fees out of the amounts that are part of that $15,000 so the creditors actually get less than the $15,000. I don’t know why I like that, but I do (laughs). Let’s just talk about that for a second. I had a $19,000 limit on my Visa and I was making $40,000 a year. That should not ever be possible. I know it’s not their responsibility but there should be some kind of sanctions in place to make sure you can’t get a limit that’s over a certain percentage of your income. Because, if you max that out, you’re basically asking for bankruptcy and it’s enabling problems. So I started the proposal, yeah.

Tom: Were you missing payments before that or were you keeping up with it?

Beau: That’s a good question because I look back at some of my statements when I’m writing just to check, and I kept a couple of the last few statements from some of my credit cards and I let them accumulate. But I think that might have been on the advice of the trustees at the time. They tell you to stop paying while they work through the proposal but I probably did miss a couple. I didn’t have the money. I was probably borrowing from one to pay for another because I didn’t have the cash flow to do this. I was just getting further into debt so I probably advanced money from one credit card to pay another. Of course, that’s terrible. But I just was trying to keep these zero-percent balances going for as long as I could so I wouldn’t have to be paying that much. But yeah, I would have missed a payment or two, especially at the end. But at that point we were going to write it all off anyway so it didn’t matter. They just stopped calling once the proposal went through, but you have to follow up with them too to make sure it happens.

Tom: A consumer proposal is a really good thing for the bank given it’s better than getting nothing but this is also built in. When they have a certain interest rate they expect some losses. They expect some of it to disappear completely to pay for collections. Then they’ll charge collection companies pennies on the dollar to buy that debt from them.

Beau: It’s built into the system. If you’re ever thinking they’re (creditors) are going to hate me for this, don’t. They’re a big company and, like you said, it’s all built in. The systems is here for a reason so take advantage of it rather than just go and live in the gutter or something even worse you might decide to do to yourself like taking pay-day loans. Oh man, they can get so bad. I’m so glad I never went there.

Tom: I was going to ask you about that.

Beau: Let me touch on this a bit more for just a second. A lot of people will contemplate suicide in this situation and I feel lucky I didn’t go there—I never had that thought. Obviously, I was really in a bad place and I was so upset with myself but I never went there. I feel lucky because who knows where I would have been, right? I just thought I was going to have to go and live with my parent’s basement or something.

Tom: Yeah, if things are going that bad that you consider suicide, it’s important to state again that counseling is free, the consumer proposal is an option when it comes to the debt so both of these things are relatively easy to do. There are not a lot of road blocks to either of them so people should certainly seek that help and turn these problems around.

Beau: But the stigma is there and that’s the main thing for people to get over. Yes, your credit rating does get ruined when you go through a proposal or bankruptcy. It’s pretty much the same as R7 or R9. The inability to pay debts as they become due, for some people, is like a death sentence in itself. I don’t know why but I think it’s all in your head. What’s worse? Having to pay this debt for the rest of your life, never pay it off and never be able to enjoy your life or save money or go through the proposal—or bankruptcy even if that’s the better option for you?

Tom: That’s only a stigma if people know about it too. Sure, it’s on your credit report but that’s not something that you have to wear around your neck. Obviously, you’ve been open with your finances but not everybody has to be. They can fix their problem and move on.

Beau: And later—I was hoping later. I was terrified in one way to have to do something that required credit checks. Even landlords would do that so I made sure I was hunkered down in one place for at least a couple of years. I got a secured credit card later but you can’t do a lot of things. I lived on cash for a couple of years and that’s an experience in itself.

Tom: How long did this wreck your credit report? Is it six or seven years?

Beau: It was 50 months so that’s just a little over four years to pay off the proposal then it’s three years after the proposal is paid. So I paid off everything in August, 2012 and in August 2015 everything—well, everything with my help, was expunged from my credit report. The credit reporting agencies don’t work for you so you have to tell them what they’re supposed to do sometimes, unfortunately. As an example, they took the proposal off my credit report but they had left one of the credit cards which were written off to the proposal. So, you can’t leave the evidence there and take the one thing off. It took a month or so but eventually I got them to clear everything off. Then, all the creditors see at that point—mind you, I didn’t get credit card offers right away. But when I did, I took them because I wanted to rebuild my credit with available credit and because I was stable at that point for a long time. If I thought there was any risk I would have obviously still stayed away. And I think anybody should do that too. But, you can have credit cards if you don’t have any risk of piling the balances up because it looks good to have a lot of “available” credit in terms of building a credit score back.

Tom: I’m a big fan of checking my credit score. One of our sponsors is Borrowell—and this isn’t a paid plug, I’m just saying I review mine all the time because, when I used to get credit reports in the mail, there was something on there that was not mine at all. So it’s certainly good to review the situation.

Beau: I wish I had Borrowell or Credit Karma or… I don’t want to mention the other one. But, there are a couple of different ways to get your credit score for free. I couldn’t get that. I didn’t know what my score was. I could get my report but the report doesn’t necessarily show any progress. The score is like a consolidated way to see if I’m improving or not. Or do they think I’m improving and that’s what they’re reporting to the bank. So it is nice to see. I’ll tell you, my credit score is 836 right now. It was probably 500 or something at the time. To be able to rebuild and during the proposal, have the ability to put some of that money away. The proposal is drafted in a way that gives you a bit of a buffer because that’s what life is. They won’t make it so strict for you. Three hundred dollars per month is going to come out and they put all the other things in the budget, then they put a tiny bit of savings in the budget too, to determine that $300 was a valid amount for me monthly. That was great.

Tom: Nothing that’s such a problem that you still have financial issues, right?

Beau: Yeah, you don’t want to get back into debt again. What would be the point? Then, if you keep focusing on the rest of your life and try to increase your income which I was doing, progressively, then you’re debt is fixed—you’re payments are fixed. But now you’re making more money so it just kind of goes from there. Really, what it gave me was this relief, temporarily, from having to deal with this terrible debt so I could focus on my gambling issues and why I had them. And that gave me the freedom to work my way out without also having this heavy burden.

Tom: This has been very inspirational. I hope if anyone has a gambling issue and hears this episode—or knows someone with an issue that they pass this on. Can you tell people where they can find you and what you’ve been up to?

Beau: The best way to find out about all my things is just beauhumphreys.com. That’s my hub. My personal finance blog is, investwisely.ca. And my podcast is The Personal Finance Show which is thepersonalfinanceshow.com but it’s all on beauhumphreys.com. Just go there. You can check out the other things I’m working on too.

Tom: Thanks for being on the show.

Beau: Thanks, Tom.

Thanks to Beau for being so open about his past to help others in a similar situation. You can find show notes for this episode at maplemoney.com/beauhumphreys or catch all the episodes at maplemoney.com/shows. If someone you know needs help with their addiction, please share this episode with them. Then help them find help in their province. Thanks, as always, for spending time with me here. I look forward to seeing you back next week.