Introduction

I was twenty-seven when my wife, Jewel, and I sat in a lawyer’s office to discuss our bankruptcy options. By that point, I had amassed a small fortune working in the Southern California real estate market since I was eighteen. Our high-end Newport Beach property had recently been featured on Flip That House. This property was our biggest investment to date. It was also the investment that was now tanking us.

My wife cried as the lawyer spoke. His mouth was moving, but all I could hear echoing in my ears were her protests from only an hour earlier in the car. She didn’t want to file bankruptcy. Our Tennessee duplex, nice and neat and paid off, would be gone if we filed. The duplex was her last hope, and so it was mine, too.

We didn’t file for bankruptcy that day, nor did we ever consider it again. We regrouped and looked forward, as we always do.

What Millennials Were Taught

I’ve been interested in entrepreneurship my whole life, dating back to when I was a child. Ask my mom to tell you a story from my childhood, and she’ll describe the morning she woke up to find countless cars driving slowly past our house, as the passengers checked out our family’s belongings, which I had removed from the garage and neatly arranged in our driveway. I sat there with my cash box, the sole proprietor of this makeshift garage sale at seven years old.

Or maybe my mom would tell you about the time my uncle, who worked for Nabisco, gave us a bunch of cookies. I proceeded to throw them into my red Radio Flyer and hawked them door to door. In fifth grade, I out-bargained my teacher, who was selling pencils to my classmates for ten cents apiece. I asked my mom for pencils and sold them for nine cents.

I’ve always been fascinated with money, but I’ve never been materialistic. My parents couldn’t afford name-brand clothes or expensive jewelry, so these things never became a priority for me. I’ve never cared about having the biggest house or the fanciest car. I bought a Sea-Doo when I was eighteen, and that still stands out as my biggest spending mistake. I am fortunate that I was never sidetracked by the materialistic needs that drive so many.

At thirteen, I started reading personal finance books. I came across a book by financial guru Robert T. Kiyosaki entitled If You Want to Be Rich & Happy Don’t Go to School: Ensuring Lifetime Security for Yourself and Your Children. As a teenager sitting in the finance section of Barnes & Noble, a self-help book written by an expert telling me not to go to school was not only mesmerizing, it was life-changing.

When you know you want to learn how to make money at a young age, but everyone tells you that you first need things you don’t have the money to get—like a college degree—the world can feel pretty overwhelming. It’s like applying for your first credit card: you need good credit to get approved, but you can’t establish that credit without a credit card.

Thirteen was a big year for me. I began studying martial arts at a local studio. My instructor was a wealthy man, who taught me about so much more than the ins and outs of karate. We talked about the stock market, different company trends, and the value of buying during those periods when everyone else is scared. We talked about how important it is to purchase rental properties instead of a single-family house so that you can live in one of the units and rent out the others for income. Of course, I would have to grow up, try his tactics, and make my own mistakes before I really learned what it took to be wealthy.

I was sixteen when I became a partial owner of the martial arts studio along with that instructor, who went on to become my mentor both in martial arts and in life. Legally, my father was the owner of my 25 percent share of the studio, but I acted as the owner and manager on a daily basis. I registered students and closed sales contracts, all while learning about business and money.

When I was working at the studio, I felt motivated and encouraged. School just didn’t cut it for me. I enrolled in a home economics class, simply because I was one of only two guys among thirty students. You can’t beat those odds anywhere. Despite my ulterior motives, I did manage to pay attention to a few things in that home ec class. For example, one day the teacher showed us a graph demonstrating the difference in income between a high school graduate and the average college graduate. At that time, in the mid-1990s, a high school graduate made $25,000 a year. Not too impressive, even then. But what was truly underwhelming was that college graduates made only $10,000 more. Ten thousand. I couldn’t believe it. As the teacher proudly displayed these numbers, thinking she was showing us the importance of a college degree, I sat in my chair, staring at the screen. Either way, I’m so screwed, I thought. I needed a different path.

It was at this point I knew I was never going to college. The problem was that everyone in my life expected me to go—my father, my mother, my school counselors, even my future in-laws. In fact, I was the first person in my family to graduate from high school.

My parents accepted whatever path I chose, but for my future (now current) in-laws, college is as important as religion, and I didn’t want to upset them. I decided to tell my in-laws that I was attending East Los Angeles College, and I kept up this charade for a year. What I was actually doing was going to Barnes & Noble, roaming up and down the business, finance, and self-help aisles, and reading about economics, investments, personal finance, and real estate. I read every one of the yellow books for dummies in finance, and every Tony Robbins book about personal development.

If you’re searching for your life’s purpose, go to a bookstore and notice the section where you could sit down and pull books from the shelves all day long. That’s where you want to be.

It wasn’t long before I tried to purchase a rental property. This isn’t an easy feat for an eighteen-year-old to pull off, but I didn’t know that. I was turned down by four or five different loan officers and passed over by the same number of realtors before I met Virginia. Virginia was an eighty-year-old real estate broker who was willing to help a kid out. She was the kind of person who wanted to give everyone a shot. This applied even to people who were trying to do something unconventional and seemingly impossible. Everyone should look out for the Virginias in their life.

At eighteen, I bought my first condo and rented it to a family of four. The couple was in their forties or fifties, with two teenagers who were only three years younger than me. I was so intimidated that I told them I was the landlord’s nephew. That way, I could talk about my scary uncle who liked the rent on time without feeling like I lacked authority.

I purchased a second condo six months later, in what became my first creative real estate financing deal. After proving myself to Virginia, I worked with her again, this time borrowing her commission of $10,000 up front and taking a lien on my first condo to buy the second.

I was officially up and running in the real estate market in the 2000s, cashing in on the largest bubble in US real estate history.

It was easy to confuse the luck I was experiencing with know-how. Don’t get me wrong, I was doing the right thing by learning all I could and getting involved in real estate early. But when you’re nineteen and making $10,000 a month in equity on real estate appreciation, it’s easy to forget all the luck you’ve encountered. You think you’re smart and that everything you touch will turn to gold. It took seven years of riding high for me to crash hard when I tried to sneak in a few more big flips and real estate purchases before the bubble burst.

The Crash

It was frustrating. I could see the trends happening in markets all over the country, but especially in Southern California, where Jewel and I had lived our entire lives. I even started a YouTube channel based on my market predictions, but, at the time, I thought my last big purchases would allow us to cash up for the downturn. I didn’t fully understand the magnitude of the situation. Whereas we’d never used credit cards to pay for anything, we were now paying all our mortgages and investment properties’ monthly expenses on credit. Once I sold, cashed out most of my early sales, then reinvested all the money back in the real estate market in 2007, almost everything foreclosed or was in a short sale. I lost almost everything I ever made. My luck ran out, and whatever destiny I once thought I had in building wealth was erased.

For the first time in my life, I wasn’t investing or actively involved in any business. I wasn’t even thinking about real estate. The foreclosures kept rolling in. If you’ve ever foreclosed on a home, you know the stress and pressure it causes....