Leahpold sends along this incredible story about how a professional financial planner found himself bankrupt. It starts like this:

One night a few years ago, when the value of our home had collapsed, our debt was out of control and my financial planning business was shaky, I went to take out the trash.

There was this enormous window that looked right in on the kitchen table, and through it I could see my wife, Cori, and our four children eating dinner. It was dark outside, so they couldn’t see me, and I just stood there looking at them.

After a while, I pulled up a bucket and I sat on it, just watching my children eat. I found myself wishing that I could get back there, connected to the simple ordinary stuff of my family’s life. And as I sat and watched, filled with longing and guilt, two questions kept arising:

How did I get here?

And how am I going to get out of this?

Read the whole thing. You can see how at each step of the path down the road to financial ruin, he made a decision that seemed reasonable at the time, even though he knew better:

At moments during our house hunt, I felt in my gut that something wasn’t right. We’d go to open houses for $400,000 homes and see lines of couples in their late 20s — younger than we were — waiting to get inside. I kept wondering where all the money was coming from. How did all these people make so much?

But prices just kept rising, and when people kept buying, that made it seem safer. I knew from my work as a financial adviser that following the crowd could be costly. But like everyone else, I felt safer in a crowd.

Everybody’s doing it, so why can’t we? On their personal spending:

It was extravagant, but it seemed modest compared to what some of our neighbors were doing. Our house was the smallest model in the neighborhood (though at 3,500 square feet it was hardly tiny), and we drove a Chevy and a VW. Cori and I and some of our friends had a lot of conversations comparing our spending habits to those around us. How can so-and-so afford a boat? How are people buying new trucks and four-wheelers and 5,000-square-foot homes? Do they know something we don’t know?

Boy, does that sound familiar. I remember when we bought our house in 2005. I kept thinking that we must be doing something wrong. We were buying a MUCH smaller house than many people in our social class and of our income were doing. We couldn’t bring ourselves to get so strung out on debt, not because we are more moral people, but because we were flat-out scared to take on more debt than we did. But I remember thinking a lot during that period, “What do other people know that we don’t?”

As much as we lost on our house when we had to sell it upon moving, it could have easily, easily been far worse, if only we had followed the crowd.