My Worst Investment Ever Podcast

Dustin Mathews is the co-founder and Chief Education Officer of wealthfit.com; an online learning startup focused on teaching all the stuff you never learned in school about money investing and entrepreneurship. He's also the host of the Get Wealth Fit podcast where he's had the chance to get inside the heads of top investors and famous people like Rich Dad Robert Kiyosaki, racing legend Danica Patrick, Kevin Harrington from Shark Tank, Marquis Jets founder, Jesse, Olympic medalists Shannon Miller, and Seal Team six leader Rob O'Neill.   “Whatever your goal is, whether it’s investing, do one small action a day to build momentum, and you'll surprise yourself at what you can achieve.” Dustin Mathews   Worst investment ever It helps to follow your own investing in real estate advice Dustin’s worst investment ever was his first home, a condo in Florida. In Florida, back in 2007/2008, you literally could buy a piece of property, and it would go up by $100,000 or $50,000, depending on where it was. The condo he bought was on the water and seemed to be a smart move. The reason why he didn't think that it would be a bad investment was that he had a mentor who was running a company, ironically called Foreclosures Daily. The mentor was teaching him how to buy and sell real estate, and together they were teaching others how to buy and sell foreclosure properties. He felt confident that he knew enough to invest in real estate. So he bought a condo on the water without doing any background research or any of the things that he advised his students to do before investing in real estate. What could go wrong anyway? Buying on an interest-only mortgage Now the big mistake was not buying the condo but buying it on an interest-only mortgage. He never planned to stay in the condo. He was going to do what everyone was saying to do. Buy it, live in it for two years, and then move out and buy a new property and trade up. So he figured that because he was only looking to invest in real estate, he would do an adjustable-rate mortgage interest only. Unfortunately, the market turned in 2008 and property values dropped. His mortgage payment became more than what the condo was worth. Eventually, the bubble burst, and now he was facing foreclosure. While he had always taught people not to walk away from foreclosed homes, he walked away from his condo, gave up on it, and gave it back to the bank. Lessons learned Do your due diligence It's so easy to get excited about whatever investment that is currently hot and that everyone is talking about. Don’t get caught up in the hype. Take time to do your due diligence to confirm that, indeed, the investment is good for you too. You may realize that despite the hype, this isn’t the right time or investment for you. Educate yourself Even though Dustin was working in a real estate company, teaching real estate investing, he was so caught up in the job, the KPIs and the metrics that he wasn't absorbing that education for himself. So even if you’re an experienced investor, make the time to educate yourself about every piece of investment you set your eyes on. If possible, consult other people that don't have a vested interest in your stake. Andrew’s takeaways Don’t get overhyped You may get caught up in the hype. Slow down, stay cool and take time to observe and understand things. This will help you make informed decisions. Experts are the worst Many people have probably lost more than they have made in the stock market over a long period, because of overconfidence. Being seasoned investors, being in the market, and on top of it, they assume their investments will be safe, so they go in blindly. It’s okay to feel shameful of your loss People, even experts, will always make mistakes when investing. It’s okay to feel embarrassed about your investment decisions that go wrong. Face it, and move on. Actionable advice The next hot company is always going to be there, the next hot stock is always going to be there, it's just human nature, and so there's always going to be a hot new option. So take the time to slow down, do your due diligence, and find out if that is the right deal for the long haul. No. 1 goal for next the 12 months Dustin’s goal is to be better with his time and have fewer and stronger relationships because, over time, he has learned that it's important to take the time and invest in the right relationships. Parting words   “You're going to make some bad investments, just own it and move on.” Dustin Mathews   Andrew’s books How to Start Building Your Wealth Investing in the Stock Market My Worst Investment Ever 9 Valuation Mistakes and How to Avoid Them Transform Your Business with Dr. Deming’s 14 Points Andrew’s online programs Valuation Master Class Women Building Wealth The Build Your Wealth Membership Group Become a Great Presenter and Increase Your Influence Transform Your Business with Dr. Deming’s 14 Points Connect with Dustin Mathews LinkedIn Twitter Facebook Instagram Website Connect with Andrew Stotz astotz.com LinkedIn Facebook Instagram Twitter YouTube My Worst Investment Ever Podcast  

John Pugliano is the author of The Robots are Coming: A Human's Survival Guide to Profiting in the Age of Automation. He is the host of Wealthsteading Podcast as well as the founder and money manager at Investable Wealth LLC. John’s circuitous career path includes military services, both enlisted and officer, corporate career in industrial sales, and finally, a late-blooming entrepreneur. John has an MS in Systems Management from the University of Southern California and a Bachelor's of Science and Environmental Science and Engineering from Penn State. In a nutshell, John is the quintessential Millionaire Next Door.   “First, learn how to earn, then you have to save, and then and only then you invest.” John Pugliano   Worst investment ever John found himself in the middle of the internet bubble in the 90s. Being a smart investor, he’d seen the internet bubble coming, and so he got out of technology stocks. This saved his wealth and so he was sitting on his high horse as he watched others lose their investments. The arrogant and overconfident investor Having escaped the internet bubble unscathed, John became arrogant and overconfident. With so much confidence, he invested a very large percentage of his portfolio in a brick and mortar, retail type of service company. He invested in Boston Market, a concept restaurant that served good healthy, home-cooked kind of meals. But the big concept of it was you didn't have to eat there. You could take it at home. Take out was a new thing, and this made the company all the rage. His entrepreneurial instinct told him that the technology stocks would go down, but the brick and mortar type of restaurants would always be there. And besides, the company had great reviews. Everybody loved it. So feeling all smug and overconfident, he put a large portion of his portfolio that he'd already made a profit on from getting out of the internet bubble into Boston Market. Falling off the high horse The Boston Market stock listed at about $20 and was selling at around $45 when John decided to invest in the company. Within a short 18 months, the stock went to zero, and the company went bankrupt. So John didn't lose 10% or 20% or even 50%, he lost a whopping 100% of a large portion of his overall investing portfolio. John was overconfident in his investment plan so much so that he didn’t even consider diversified investments. He put all the money he had in one stock. Lessons learned Diversify your portfolio John learned the hard way that you don’t have to believe in the rich man’s hype. You don’t have to take big risks to win. The way to win is through portfolio diversification. So instead of investing in one stock, diversify your portfolio by investing in many different stocks. This cushions you from making your worst investment should one of your stocks go bankrupt. John’s style now is to have very large diversification. He prefers to have a minimum of 30 stocks at a time, which gives him roughly a 3% position in any one stock. Now even if another disaster happened and one stock went to zero, he’ll only have lost 3% of his overall portfolio. He now believes that if you can't have a diversified portfolio, you're not an investor, and you shouldn't be doing it. Ignore the hype Ignoring the hype is especially an important lesson for people who are interested in how to start investing in stocks. Forget the people on Wall Street; they’re simply interested in getting your money, so don’t take them at face value. Being cynical when getting into the stock market will save you from losing your wealth. Ask the hard questions before you get sold. Don’t be a conformist Don’t fall for fear of missing out, aka FOMO. Just because everybody else is investing in a particular stock, you don’t have to do it. Whenever you conform you risk getting mediocre performance. Protect yourself with a put If you want to buy into one stock, you can protect your wealth with a protective put option. A put option allows you to know upfront what your losses stand to be. So you know how much you’re willing to risk. Andrew’s takeaways Be careful not to be overconfident Confidence or overconfidence is the problem, while diversification is the solution. Overconfidence will bring you losses, but learning how to diversify your stock portfolio will increase your wealth. Do your research The number one investment mistake that people make is that they fail to do their research. We fail to properly assess and manage risk leading to poor investments. Actionable advice Mitigate your risk and refrain from investing more than you're willing to lose. That's the beauty of a protective put. It forces you to decide what you're willing to lose upfront. No. 1 goal for the next 12 months John’s number one goal is to get out of the unpredictable stock market before it falls apart. He doesn’t want to be the last guy standing. He wants to get out before the music stops. Parting words   “The best way to build your wealth is to do what works for you and not what others are doing. Do what you know.” John Pugliano   Andrew’s books How to Start Building Your Wealth Investing in the Stock Market My Worst Investment Ever 9 Valuation Mistakes and How to Avoid Them Transform Your Business with Dr. Deming’s 14 Points Andrew’s online programs Valuation Master Class Women Building Wealth The Build Your Wealth Membership Group Become a Great Presenter and Increase Your Influence Transform Your Business with Dr. Deming’s 14 Points Connect with John Pugliano LinkedIn Twitter Website YouTube Connect with Andrew Stotz astotz.com LinkedIn Facebook Instagram Twitter YouTube My Worst Investment Ever Podcast Further reading mentioned Thomas J. Stanley (1996) The Millionaire Next Door: The Surprising Secrets of America's Wealthy John Pugliano (2017) The Robots are Coming: A Human's Survival Guide to Profiting in the Age of Automation  

Geoff Gannon is a portfolio manager, podcaster, and investment writer. He manages accounts at Focus Compounding Capital Management, and he co-hosts the Focus Compounding Podcast with Andrew Kuhn. He started writing and podcasting about value investing in 2005, at the ripe young age of 19. Since then, Geoff has written hundreds of articles for Seeking Alpha and Guru Focus. He wrote the Gannon On Investing newsletter in 2006 and two GuruFocus newsletters from 2010-2012. In 2013, he co-founded Singular Diligence (a monthly investment newsletter) with Quan Hoang and authored all issues from 2013-2016. In 2017, he co-founded the Focused Compounding member website (with Andrew Kuhn). In 2018, he co-founded Focused Compounding Capital Management, where he manages client accounts. Lastly, in September of 2019, Geoff Gannon and Andrew Kuhn announced their partnership with Willow Oak Asset Management, a subsidiary of Enterprise Diversified Inc (SYTE US), to launch a hedge fund with a target launch date of January 1, 2020.   “If you have a monopoly or something like that, it’s okay to have a lot of operating leverage and a lot of debt.” Geoff Gannon   Worst investment ever Geoff got into investing as a teenager when he dropped out of college after one semester. He figured college wasn’t his thing. Instead, he wanted to do something related to investing as well as writing. So by the time he made his worst investment, he’d packed some good years of experience in investment and risk management. Even the most experienced investors make blunders Geoff’s worst investment ever was a personal investment. He’d been interested in the Weight Watchers stock for a long time but didn’t buy it as the price was always too high for his liking. He’s a value investor and likes to pay a low price for things. The lucky star shines on the seasoned investor As luck would have it, a couple of factors affected the price of the stock. The controlling shareholder decided that they should take on a lot of debt and buy back a lot of stock, which caused the stock price to shoot up. However, the price got so high that nobody wanted to buy it, which then caused the price to drop more than it should. Suddenly he was looking at the cheapest stock amongst its competitors, some that he never thought were as good as Weight Watchers. Now he got pretty interested in the stock. He goes against his better judgment Weight Watchers was a controversial stock at that point. But he liked the price, and it had all the things about a business that he liked as well. However, Weight Watchers had more debt than companies that he’d normally buy. The $33 per share stock price got him to ignore the debt and its possible consequences. Over the next year or so, the stock declined to the lowest price it has ever hit—$4. The price did increase after an announcement by Weight Watchers that Oprah was partnering with them. He ended up selling his shares at $17, making a 50% loss. Lessons learned Don’t invest in a high debt stock Geoff’s biggest lesson was that when buying stocks with high debt, you ought to consider the type of product or service the company is trading in. When a predictable company, for instance, an airport or any monopoly, take on an excessive amount of debt, the stock remains safe. However, a company like Weight Watchers is less predictable because they offer products that people will not hold onto for long. The average Weight Watchers member only stays with the diet for about nine months, meaning customers decline if they don’t get to sign up new ones. If the company had not taken on an excessive amount of debt, if they'd kept it pretty reasonable and low, that would probably have changed the trajectory of the performance of that stock. Think about fads too Before Geoff bought into the Weight Watchers stock, there was a buzz around the Atkins diet. It became this huge phenomenon beyond anything that any diet had been before for about a year. It did a huge amount of damage to the Weight Watchers business that year. Geoff Knew from research that the Weight Watchers stock declined a lot with the Atkins diet. He made the mistake of thinking that that was a one-time thing, but other fads such as apps and other diets came up and continued to affect the price of the stock. Andrew’s takeaways When looking for stocks to buy pay attention to the company’s debt Most people never take time to research whether the company they want to buy into has any debt. Now that’s a risk management mistake because debt can creep up. Even though it doesn't cause a problem most of the time, but when it does, you can lose the shareholder value in the business that you are investing in. Investing in the stock market for the first time? Start slowly When investing in the stock market for the first time, it pays to start slowly. When you find an investment idea that you think is viable, go in slowly and give yourself time to monitor its performance. This saves you from experiencing buyer's remorse. Actionable advice Geoff’s advice is if you're going to buy the stock of a company with debt, take your time thinking about the debt itself and whether it's a good investment or not. Ask yourself if you invest in this debt will the company be safe or at risk of bankruptcy? And if it's not, then maybe you don't want to invest in the stock. No. 1 goal for the next 12 months Geoff’s number one goal for the next 12 months is to have a successful launch of his hedge fund because the first year is very important in terms of starting things off. So that'd be a great goal to have a good first 12 months. Andrew’s books How to Start Building Your Wealth Investing in the Stock Market My Worst Investment Ever 9 Valuation Mistakes and How to Avoid Them Transform Your Business with Dr. Deming’s 14 Points Andrew’s online programs Valuation Master Class Women Building Wealth The Build Your Wealth Membership Group Become a Great Presenter and Increase Your Influence Transform Your Business with Dr. Deming’s 14 Points  Connect with Geoff Gannon Website Facebook YouTube Connect with Andrew Stotz astotz.com LinkedIn Facebook Instagram Twitter YouTube My Worst Investment Ever Podcast  

Barbara Friedberg has an MBA and a Master's in Science. She is a veteran Portfolio Manager, FinTech consultant, expert investor, and former university finance instructor. She is editor-author of Personal Finance: An Encyclopedia of Modern Money Management, Invest in Beat the Pros and How to Get Rich. She is CEO of Robo-Advisor Pros, a Robo advisor review and information website. Additionally, she is the publisher of the well-regarded investment website Barbara Friedberg Personal Finance. Her work is found on U.S. News & World Report, Business Daily, Investopedia, Go Banking Rates, Investor Place, MSNBC and MSN Money, Entrepreneur, and many other places.   “Buying, although it's got a certain psychological benefit of owning your own home, financially, it may not be the best way to build wealth.” Barbara Friedberg   Worst investment ever Barbara and her husband are not newbies to the real estate market, having bought their first home in their 20s and 30s. It was while living in California and after having their daughter that they decided to move to another cheaper region. The couple realized that their lifestyle would be crazy trying to work and raise a family in California, so they decided to move to the Midwest. Even the most experienced make the worst investment decisions After selling their home for a tidy sum, they went house shopping in Indianapolis. To their delight, homes in Indianapolis were much cheaper than in California. Excited, they forgot the most important rule of buying a home: do your research. Struck by the relatively low real estate prices, they went all in and bought a beautiful four-bedroom home in a brand new community. The investment wasn’t so good after all After two years, Barbara’s husband had to change jobs, which meant they had to move. Selling the home was not as smooth as they expected. No one wanted to buy the house. What they would have realized had they done their research is that locals preferred houses with a basement, and theirs didn’t have one. The other problem they didn’t anticipate was Barbara’s decoration. See, she loves modern style decorations, so she’d decorated every room to her taste. Not to say, her taste is poor, but the decorating style in Indiana leans more towards traditional than modern. So her house was not the plum that she thought, given the area of the country they were living. When they listed their house on the market, it did not get a lot of traction. Ultimately, they did end up selling the house two years after they’d bought it for a loss of $25,000. Lessons learned Know your neighborhood before buying your first home Before you buy a home, do your research and understand the neighborhood well. Find out what are the must-haves for local home buyers. If everyone wants a house with a basement, buy a house with a basement. This will help sell the house faster when the time to sell comes. If you're going to sell in a certain region, you want to make sure the house fits in with the norms of the region. Buy a home only if you’re sure you’ll live in it for at least five years Buying a home is an expensive venture, and so is moving. Don’t buy a home unless you are pretty certain that you're going to stay in that property or hang on to that property for five to seven years. Real estate investments appreciate slowly Unlike the stock market, which is quite volatile, the real estate market is much more stable and moves slowly. So unless you are planning on staying in a house for five to seven years, don't buy, rent instead. Buying a house and expect to sell it for profit in the next one or two years is very difficult. Andrew’s takeaways Just because it's cheap doesn't mean you have to buy it Just because a house is cheaper than you expected it to be, does not mean that you should buy it. Consider all other factors of buying a home on top of the price. You may realize that it’s not a worthy investment in the long run. Do your research before you buy that home When investing in a home outside of your area, be careful. Take time, think about it, do your research, and make sure that it’s the best thing to do. Forget the American Dream to buy If you're going to stay someplace for less than five years, rent. You don’t have to follow the so-called American dream to buy. Sometimes it’s more beneficial to rent. Actionable advice Don't buy a home just because you are impressed by its grandness. Consider what's important to you in life. Consider if the house truly fits your needs putting in mind the future as well as your current situation. No. 1 goal for the next 12 months Barbara has been working very hard on Robo-Advisor Pros and intends to continue to make the website the premier site to learn about Robo advisors. These are automated digital low-fee investment advisors. She believes that they can be a helpful tool for individuals to manage their money at a very low cost. Her goal for the 12 months is to continue to build that asset up to help people learn to build wealth, smartly and affordably. Parting words   “Buying is not for everyone. Whether you buy a rental property or own your own home, it will be a ton of work. Don’t be afraid to consider renting if you can’t handle the work.” Barbara Friedberg   Andrew’s books How to Start Building Your Wealth Investing in the Stock Market My Worst Investment Ever 9 Valuation Mistakes and How to Avoid Them Transform Your Business with Dr. Deming’s 14 Points Andrew’s online programs Valuation Master Class Women Building Wealth The Build Your Wealth Membership Group Become a Great Presenter and Increase Your Influence Transform Your Business with Dr. Deming’s 14 Points Connect with Barbara Friedberg LinkedIn Twitter Website Facebook Pinterest Books on Amazon Robo-Advisor Pros Connect with Andrew Stotz astotz.com LinkedIn Facebook Instagram Twitter YouTube My Worst Investment Ever Podcast  

Buck Joffrey is a physician turned entrepreneur and professional investor. He is also the host of The Wealth Formula® Podcast and author of an international best-selling book, 7 Secrets of Eternal Wealth, which focuses on financial education for high paid professionals.   “At the end of the day, I just came into a realization that I really made a big mistake. I can sit here, chase it, spend money to save it, or I can give it up, cut my losses, sell it to somebody, learn to take the loss and move on. And so I did the latter.” Buck Joffrey   My Worst Investment Ever Story Surgeon turned real asset investor Buck finished surgical training in 2008. Having his own practice and doing a few other things, he started to have a little money to invest. He got interested in real estate primarily because of his family’s influence but mostly because of Robert Kiyosaki, the author of the best-selling book, Rich Dad, Poor Dad. “It’s just math, and I’m good with math” Buck got addicted to the idea of cash flows and multifamily real estate, and he went on and read two of Ken McElroy’s books, The ABC of Real Estate Investing and The Advanced Guide to Real Estate Investing. Armed with advice from all the books he read, he concluded that it's all just math, and he knew he’s good at it. With no help from anyone, he started looking for properties. The deal that spiraled out of control For his first venture into the real estate world, Buck thought that it was a good idea to go to an online site to look for properties. He eventually found a deal, did the math, and saw a great opportunity–or so he thought it was. He went down to the place where the property was, ticked all the boxes, and bought the building. Just as quickly as he had made the deal, he started realizing that nothing on his spreadsheet seemed to be working. All of a sudden, everybody stopped paying their rent, and a bunch of people was creating more problems than he could handle. Buying something that you think you know and realizing that it was not after It turned out that Buck’s first deal was a fraud. The previous owner, to be able to convince people to buy his properties, would let people live there for free for a while. This was just to put on a show that the building was performing well and that buyers could expect to receive rent from the fake tenants. And so, the whole thing was a mess. Buck, with no one to turn to and with little to no experience in property management, had to sell the building after a year later for a loss. It’s one thing to know what you think you are buying and another thing when you realize that it’s not what you thought. It was a tough way to learn but a good lesson nevertheless. Lessons learned Real estate is more than just numbers The heart of real estate is operations. It’s a combination of finding an asset and good property management to squeeze out those high returns and get the most out of it. Build a great team and find the right people If you plan to venture into real estate on your own, don’t. Buck has learned it the hard way. It is very important to create a team with the skills and experiences in real estate. Don’t underestimate the potential gains from being a “passive” investor Over time, Buck learned that there are two sides of real estate. Some people are doing it full time, which brings a decent amount of cash. Others, on the other hand, are investing as passive investors who are only limited partners with operators. With zero work, they get to earn a lot more than those who are full time in real estate. Andrew’s takeaways Do your research properly The number one common mistake is the failure to do research properly. Research is beyond numbers. When doing your research, investigate, check, and test those numbers if they’re real. Your team is your asset Getting the right people on the bus will shape the strategy of how you invest, where you invest and how you will manage. So, it’s a great reminder to build a great team around you which you can trust. Realizing when to cut your losses Don’t wait for a miracle to happen. When it’s losing, learn to give it up. Cut your losses and put your money into something more hopeful. There is so much emotional baggage with cutting losses. It is important to realize when to stop before draining your money, spirit, and time. Get out, move on and do not make the same mistakes again. Actionable advice If you’ve got a full-time job and you are focused on it, the last thing you want is to give yourself another job. So, if what you are looking at is a potential investment as a limited partner, find yourself a group of people that knows what they are doing, and you will, in most cases, get a much better outcome with zero additional work for you. No. 1 goal for next the 12 months Right now, Buck has about $300 million worth of assets under management for his investor group. His goal is to continue to get people as good returns as he can and maximize investor returns. Parting words   “Remember, learn from your mistakes. But they don’t really need to be your mistakes because they can be someone else’s. Borrow the takeaways and learn from them.” Buck Joffrey   Andrew’s books How to Start Building Your Wealth Investing in the Stock Market My Worst Investment Ever 9 Valuation Mistakes and How to Avoid Them Transform Your Business with Dr. Deming’s 14 Points Andrew’s online programs Valuation Master Class Women Building Wealth The Build Your Wealth Membership Group Become a Great Presenter and Increase Your Influence Transform Your Business with Dr. Deming’s 14 Points  Connect with Buck Joffrey LinkedIn Twitter Facebook YouTube Website Connect with Andrew Stotz astotz.com LinkedIn Facebook Instagram Twitter YouTube My Worst Investment Ever Podcast Further readings mentioned Robert Kiyosaki (1997) Rich Dad, Poor Dad Ken McElroy (2012) The ABC of Real Estate Investing Ken McElroy (2008) The Advanced Guide to Real Estate Investing  

Deacon Hayes is the founder of WellKeptWallet.com, which reaches over 1,000,000 people per month. He has been a contributor for the US News & World Report, Investopedia, Clark Howard and more. He is also the author of the book, You Can Retire Early! Everything You Need to Achieve Financial Independence When You Want It.   “Opportunities are like buses, there’s always another one coming.” Deacon Hayes   My Worst Investment Ever Life before the devastating investment Hayes lived and worked in Phoenix, Arizona before his big fall and his subsequent rise from the ashes. Like most Americans, he had his fair share of debt but had so far managed to find a balance with his income. However, he loved his job and his life and lived by his philosophy of following his passions. Until he came across the opportunity that changed his whole life. Real estate fad covers country in early 2000s The early 2000s were times of great financial stability. It was a time of prosperity and growth in the world of finance with all markets from the stock market to currency exchange achieving record highs. The real estate market, in particular, was doing really well, with that being described as the age of the real estate boom. With emotions running high, Hayes decided to take a risk on the market. Investing for him meant the possibility of having a debt-free life, and it was too good an opportunity to pass. So having done his homework he decided to buy not one but two condos. Investor gives in to ARM loans’ allure The first mistake that Hayes made was taking a huge risk on multiple investments without being fully informed about the real estate market. He had a payment option ARM (adjustable rate mortgage) plan. In a nutshell, this would allow him to make a small minimum investment with variable interests which seemed like a good idea. In retrospect, giving in to this allure is the worst mistake he made given how much he ended up losing. Financial crisis begins in 2007, put all his net worth at risk Between 2007 and 2008, half of the U.S. suffered the worst market crash in real estate history. For a number of reasons, property values plummeted while interest rates shot through the roof. Hayes, alongside many other Americans, felt this major blow. And as a result of his poor risk management, he was at risk of losing not just his two condos but a majority of his net worth. When it rains, it pours So here was Hayes, in his early 20s, hundreds of thousands of dollars in debt and had lost up to 95% of his net worth. Sounds pretty bad huh? Well, it got worse for him. See the land that his two troubled condos were built on was on a lease that ran out soon after the market crash. This meant that his Homeowners Associated (HOA) fee payments would go up. And boy did they go up; by more than 300% to be exact. Struggling to stay afloat while drowning in debt For the next several years (a decade to be exact), it was an uphill battle to keep financially afloat. Despite having double income through his wife and some investments in the stock market, he did not have enough money to rescue let alone sustain his properties. He was also in constant conflict between dumping the seemingly rotten investments and finding ways to save them. He tried everything from cutting costs to paying off the loans to finding multiple tenants for the property. Unfortunately, it wasn’t enough. He lost one condo a few years after the crash through foreclosure after failing to find someone to buy it. The other one went soon after, and despite finding a buyer and escaping bankruptcy, he ended up selling it at a loss of $40,000. Ten years later, Hayes is finally free. It was a rough several years, and he lost a lot; there is no doubt. But he also learned a lot from his experiences on risk management and how to avoid loss. Lessons learned Here are some of his lessons so you too can avoid making bad investments and losing more than you are ready to. Do your research Investing is more than just having a gut feeling that a market will go up. You need to research. Learn as much as possible about the risks, rewards, and everything that could go devastatingly wrong. And only after understanding the good, bad and the ugly should you take out that check book. Minimize your risks Risks are inevitable when it comes to investments. However, unnecessary risks are purely out of choice. It is important to minimize your risks as much as possible when investing, especially in real estate. The best way to do this is by making a decent-sized deposit with rates that favor you. That way, you will manage to pay off the mortgage sooner and with less interest. If this means getting one investment at a time, then do it. Some risks are just not worth taking. Don’t go all-in on a new investment Whether it is a new company in the stock market or some new investment fad, it is never a good idea to give it all you have. It doesn’t matter how good the deal seems. Instead, invest a little at a time as you get to understand the market through different financial seasons. Don’t bite off more than you can chew Avoiding loss is all about taking risks that you can manage. Hayes made a huge mistake buying two condos at the same time when his income could not cover both. This left him vulnerable to the major loss he suffered as it became harder to save both condos with limited resources. Don’t make decisions out of excitement or emotion Never mix money with emotions. It really doesn’t matter how excited you are at the prospects of big wins. Take the feelings out of it, think critically about it, and make a sound decision based on fact. You don’t have to invest in all fads; opportunities never stop coming As Richard Branson so famously said, “opportunities are like buses, there’s always another one coming”. So don’t panic and enter a market because you are afraid of missing out on the investment (a phenomenon known as Fear of Missing Out [FOMO]). Take as much time as you need to be ready for that major move. And if the chance passes you by don’t regret anything, a greater opportunity is sure to follow. Andrew’s takeaways From this story one lesson stands out the most; you do not have to take every opportunity that comes your way. It doesn’t matter how promising or even how cheap it is. Here, you have to fight your instinct to follow the hype and go with your emotions. It will take a lot out of you but it will also save you a lot of disappointment and loss down the line. Actionable advice Beware of the fear of missing out (FOMO). There is nothing worse than getting into an investment simply because it is a trend and you want in on it. Instead, take as much time as you need to understand the market and your options. If after your research and time to think it still seems like a good idea then go for it. No. 1 goal for next the 12 months For Hayes. The future seems bright with his successful online. He hopes to have reached 2 million readers on his website as a way to enlighten more people on how to handle debt for a healthy financial life. Parting words   That brings us to the end of Deacon Hayes’ incredible story. I hope you learnt enough from his loss to secure yourself big wins in future. In a nutshell, not all opportunities are worth going after. Deacon Hayes   Andrew’s books How to Start Building Your Wealth Investing in the Stock Market My Worst Investment Ever 9 Valuation Mistakes and How to Avoid Them Transform Your Business with Dr. Deming’s 14 Points Andrew’s online programs Valuation Master Class Women Building Wealth The Build Your Wealth Membership Group Become a Great Presenter and Increase Your Influence Transform Your Business with Dr. Deming’s 14 Points Connect with Deacon Hayes LinkedIn Connect with Andrew Stotz astotz.com LinkedIn Facebook Instagram Twitter YouTube My Worst Investment Ever Podcast Further reading mentioned Deacon Hayes  (2017) You Can Retire Early!: Everything You Need to Achieve Financial Independence When You Want It  

Aaron Walker has founded more than a dozen companies over the past 41 years. He attributed much of his success to having surrounded himself with his Mastermind counterparts. Aaron spent a decade meeting weekly with Dave Ramsey, Dan Miller, Ken Abraham, and five other amazing entrepreneurs. Aaron is the founder of Iron Sharpens Iron Mastermind Group that now hosts 15 groups with national and international members. Aaron is the author of View From The Top: Living A Life Of Significance, a must-read book to fully understand how to live a life of success and significance. He is also a founder of the Mastermind Playbook which is an incredible resource for starting, running and scaling masterminds. Aaron lives in Nashville, Tennessee, with Robin, his lovely wife of 40 years. He has two incredible daughters and five beautiful grandchildren. When time allows, Aaron enjoys hunting, fishing, golf, and is an avid reader.   “We have all these plans, yet we're not promised tomorrow. I encourage you to live today like there is no tomorrow in a good way. Surround yourself with honorable, trustworthy people.” Aaron Walker   My Worst Investment Ever Story It started as a success story At a young age, Aaron Walker wanted better for himself. He came from a family of six and grew up in about 600 square foot house with barely little to survive. While still in night school, he was working during the days and never stopped. When he turned 18 years old, he impressed one of the largest insurance agencies in the country at that time to invest with him. After signing a $150,000 loan, Aaron opened up his first retail outlet. It became a success, and in 36 months, he was able to pay off a 10-year loan. He kept doing what he had been doing, and soon young Aaron Walker had already opened four stores in Nashville. He got a call from a Fortune 500 company, and they made an offer he couldn’t refuse. At the age of 27, Aaron Walker had made enough money to retire. A tragedy turned his life upside down After 18 months of doing nothing, Aaron had come to a reality that he needed to get back in there, lose some weight and find a new job. So he went back to the company he started with when he was 13 years old. Now, at the age of 40, the company had grown four times bigger than it was 20 years ago. Aaron never stopped working from then on. He thought his life couldn’t get any better. He had his beautiful family, a steady job, vacation home and a big house on the hill. Until a tragedy turned his life upside down. While he was headed to his office, he ran over a pedestrian, and eventually, the head trauma killed the man. Even though it was not his fault, Aaron suffered anxieties because of stress and pressure after the accident. He took a break for five years. The painful realization For more than 20 years, Aaron wanted nothing more than a better life. But sometimes, life slips through a backdoor, and had it not been for that ugly turn in his life; he would not have realized what had been missing–a legacy. Would he want to be just another rags to riches story? No, Aaron wanted more than that. He wanted to have an impact on other people’s lives. So, he changed his focus and started thinking and looking outward rather than inward. He wanted to help people accomplish their goals and dreams. Ultimately, he wanted to transform lives. Lessons learned Build relationships intentionally In today’s society, people hide behind the screens and completely obliterating the importance of human connection. These intentional relationships we create every day gets us out of our own head and lets us focus outward instead of inward. Success comes after gratitude When you are grateful, you build good relationships with the people around you. As a result, natural reciprocity comes back to you. Learn to prioritize A lot of people try to live a balanced life, which is a myth. What needs to be done is to be very out of balance in the right places. Focus on the things that are meaningful, with purpose and that are lasting. Andrew’s takeaways When tragedy strikes, you can never avoid it Tragedy will strike you one way or another. Through these darkest times, the relationships you have with your family and friends will carry you out. Create a legacy that lasts We get so caught up with life and all its craziness that we sometimes forget what our legacy is. How will you leave an impact on other people? How will your existence inspire others to transform their lives? Start with a mantra of helping one person to step towards achieving their goals and repeat it every day. People are intrinsically motivated That management of companies these days have shifted away from judgment to metrics has lead to less focus on relationships. But people are intrinsically motivated, and many times, when we try to put on something extrinsic like a KPI to guide them, it's like you ruin the whole joy of work. Actionable advice It’s really important who you spend your time with. We should be very selective about the people that we spend time with because our time is very important. No. 1 goal for next the 12 months Aaron Walker’s goal is to get as many as possible to visit Mastermind Playbook so that he can continue spreading the message of how to live a successful and significant life. Parting words   “Most people in life today just want bigger, better, shiny, or faster things. Let me help you to really think through with clarity, how you can live a very productive life, how you can keep the focus, and how to have great levels of success and significance simultaneously.” Aaron Walker   Andrew’s books How to Start Building Your Wealth Investing in the Stock Market My Worst Investment Ever 9 Valuation Mistakes and How to Avoid Them Transform Your Business with Dr. Deming’s 14 Points Andrew’s online programs Valuation Master Class Women Building Wealth The Build Your Wealth Membership Group Become a Great Presenter and Increase Your Influence Transform Your Business with Dr. Deming’s 14 Points  Connect with Aaron Walker LinkedIn Twitter Facebook Instagram YouTube Podcast Website Connect with Andrew Stotz astotz.com LinkedIn Facebook Instagram Twitter YouTube My Worst Investment Ever Podcast Further readings mentioned Aaron Walker (2017) View From the Top: Living a Life of Significance  

Dustin Heiner is the founder of MasterPassiveIncome.com and the host of the Master Passive Income Podcast. Dustin is a real estate rental property investor, who was able to make enough passive income from his business to quit his job when he was 37 years old. With his podcast, books, courses, and coaching, he now helps other people quit their job by investing in real estate rental properties to live the dream life. Now, Dustin is living his dream life alongside his wife and four kids while traveling and exploring the world.    “If somebody asked me before, ‘Hey, Dustin, what do you do?’, I used to say that I work for the IT for this department in the government. Now if somebody asks me, ‘Hey, Dustin, what do you do?’ I don’t say I’m an author or a real estate person, I would say, I am an investor.”  Dustin Heiner   Worst investment ever Being laid off from a job was not that bad at all Before becoming a master of passive income, Dustin Heiner worked as a government employee for years. As he was going about his daily grind, he received a phone call from his boss who summoned him to her office. At that very moment, Dustin thought of all the worst-case scenarios. While he was walking to his boss’s office, he could not shake the bad feeling that he would lose his job that day since rumors had it that the department had been cutting people off.  He was given a two-week notice Then came the blow when his boss confirmed that he had been laid off. Losing a job while trying to provide for your family is a scary thing. But Dustin had to do something. First things first, he had to get a new job quickly. Good thing is, he’s got good connections from his previous jobs and luckily, he got hired a week after losing his job. One word sums up everything he was talking about – network. Planning for some backup Dustin learned his lesson and started to think forward. Being just an employee would not work for him and he needed a way out from his job. His back-up plan—investments. So, he started investing in stocks but turned out, he was losing far more money from it. He then stumbled on real estate which taught him great lessons. Location-based businesses are not for everybody Not all beginnings are great, and Dustin could attest to that when he invested in a retail establishment in 2007. It was a combination of a convenience store and a pizzeria, a market that is heavily dependent on the people around the area which is very promising. And the results for the first 2 years were great.  However, the economy crashed and the working population in that area was greatly affected. Consequently, Dustin’s retail business also suffered. So, what began as a good investment, turned out to be his wake-up call.   Lessons learned Invest your time and money efficiently Spend your life doing the things that are going to benefit you more than just a job. When you know what those things are, study and master it. The results will surprise you. Get an investment that works for you Dustin cannot stress this enough that you need to create a business that does not need you. Let the business do the work for you. Therefore it is very important to learn and master passive income.  Know and control your expenses Easy to say but hard to learn. There is no hard and fast rule on how you successfully control your expenses. It is important however to find the best way possible to at least minimize the costs.  For Dustin, he loves real estate and has formed a formula on how to handle his expenses effectively. However, controlling your expenses is as important—if not more—as knowing your expenses. Being able to spot them head-on would save you a lot of time and money. Do not forget your exit strategies Diving into a business venture is one thing and planning the best exit strategy is another. Dustin did not know about strategies when he started but somehow, he stumbled into it. He never starts anything without his exit strategies. It may not be necessarily exercised, but at least, it will prepare him.   Andrew’s takeaways Master passive income When someone asks you, “what do you do?”, Dustin teaches us how to answer it. You don’t say, you’re an author or a real estate person, you say you are an investor. And what it conveys is that you are an investor of your money and time. Another key investment strategy is allocating resources. This way, it makes you think differently and start to do things differently as well. Don't put your time and effort on things that will only pay you one time. See what passive income is, and master it. Move towards financial independence Only invest in things that are going to help you move towards your financial independence. We constantly think that financial independence is an important goal for us. The journey to financial independence is to focus all your effort and time on things that will bring you a step closer to that goal.  Get yourself out of the employee mindset The key to changing that mindset is to just simply think differently. You are not an employee because you are an investor. Never think otherwise. So, when asked, “what do you do?”, answer it with confidence that you are an investor and that being an employee is your side thing. If you embody it, things will be better.  Location-based businesses are out, online businesses are in Some people say that location-based businesses may work if you are a sole proprietor. But the reality here is, regardless of what kind of business organization you are in, it is hard to grow a location-based business. You will lose time growing it with no concrete results. The smartest move is to study the feasibility of online businesses.   Actionable advice Don’t put your time into activities that only pay you once. Dustin explains that passive income—and why he has his Master Passive Income courses—is where he works one time and gets paid over and repeatedly.   No. 1 goal for the next 12 months To create a brand called Successfully Unemployed”. He’s ready to impart knowledge through a podcast where other people just like himself who are successful from being unemployed can share their stories and inspire others.   Parting words   “Learn. Learn everything. And apply everything that you have learned wisely.”  Dustin Heiner   Andrew’s books      How to Start Building Your Wealth Investing in the Stock Market     My Worst Investment Ever     9 Valuation Mistakes and How to Avoid Them     Transform Your Business with Dr. Deming’s 14 Points Andrew’s online programs      Valuation Master Class     Women Building Wealth     The Build Your Wealth Membership Group     Become a Great Presenter and Increase Your Influence     Transform Your Business with Dr. Deming’s 14 Points Connect with Dustin Heiner  LinkedIn  Twitter   Facebook YouTube  Website  Connect with Andrew Stotz     astotz.com    LinkedIn    Facebook    Instagram    Twitter    YouTube    My Worst Investment Ever Podcast  

A graduate of the American Film Institute's directing program, Max Weissberg co-produced and appeared in the feature documentary film, Hotel Gramercy Park, which included cameos by Ben Stiller, Winona Ryder, Karl Lagerfeld, and Kanye West. The film earned a jury citation at the 2008 Tribeca Film Festival and screened on the Sundance Channel for several years. Max’s micro-budget feature film, Summertime, screened at festivals including SXSW and won best screenplay at First Time Fest. The film is now available on over a dozen VOD outlets worldwide. In 2013, Max's AFI thesis film, Karaganda, set in a Soviet prison camp, was "top 5" jury-selected for the 2014 AFI DGA showcase and won 5 festival awards in 26 film festivals. Max is currently in the midst of a crowd-equity campaign for the feature version of Karaganda and has so far raised over $130,000 from 155 investors on Startengine.com/Karaganda. Max's day job is at Viacom, where he works as a producer/editor. His work there has appeared on MTV, VH1, Comedy Central, TV Land, and Paramount networks.   “Well, I think if you cannot explain what the need is for something, then there probably is no need for it.” Max Weissberg   Worst investment ever Jumping onto the cryptocurrency market bandwagon Two years ago, Max was probably the only one among his peers who thought that the cryptocurrency market was a total scam. The Bitcoin investment mania had taken off at this point, and there were millionaires left, right, and center. However, his instincts told him that the coin would fall. However, he went against his instincts and decided to join the crypto bandwagon after attending an event at the National Arts club about cryptocurrency. The hype about cryptocurrency was so big, with everyone in attendance talking about how Bitcoin was the future. When they asked the room, who owned a digital currency, most of the room raised their hands. So Max was sold, and he figured that he didn’t want to be the last one on this gravy train. Kind of the same feeling I had when I went one to become one of the thousands who followed the herd to big losses in the dot com era. Without a second thought, he went ahead and took $800 and put it in cryptocurrency. Theory of a bigger fool than the digital currency investor In December 2017, Bitcoin’s value stood at about $19,000. This price went up and down a little bit. And then the prices collapsed. Max was a little bit surprised, but admittedly, he had seen it coming. He had ignored his own advice. So why would he make such an investment mistake when his instinct told him not to? Well, Max went along with the theory of a bigger fool than him, which most people who invested in Bitcoin believed in. The theory poses that there has to be a bigger fool out there. Someone who would believe in the craze and buy his Bitcoin, and he’d make a profit. The idea of intelligent people espousing this philosophy won him over, and he hoped that there was just a huge amount of people who had an interest in crypto trading. He assumed that there were hundreds of billions of dollars of money in the cryptocurrency market. He believed there had to be an institutional investor or somebody out there putting this money. Unfortunately, that was not to be. Max sold his Bitcoins for a fraction of what he had paid. All his Litecoins were almost worth nothing by the time he sold it. Luckily, he knew going in that he did not want to put more money into it than he could afford to lose. It pays to ‘sleep on it’ The number one mistake that Max made was to rush into making the worst investment without giving it as much as a second thought. He fell immediately for the hype that he should have 1% of his assets in digital currencies. Immediately after the event, he went on Coinbase, opened an account, and transferred money the next day. He bought three cryptocurrencies, but mainly Bitcoin. He was excited by the volatility of Bitcoin. One day it would go up 10%, the next day, it would go down. Until it went completely down, and he lost his investment.   Lessons learned If you can’t pin down the benefit, there may not be one If you cannot explain what the need is for something, chances are that it’s not something necessary and will, therefore, not bring you any benefit. Intelligent people do dumb things Just because you hold someone in high esteem don’t take up their investment advice blindly. You also have to cut through the clutter and not follow mass hysteria. Try to stick to your investing principles.   Andrew’s takeaways Do your research Don’t jump the gun on any investment before doing thorough research. Find out just how solid the investment plan is. Had Max taken time to research the cryptocurrency market, he’d have found out that the excitement about Bitcoin was just a hype that would fade out quickly. He’d probably have been able to save himself from making the worst investment decision. Don’t be driven by emotion or flawed thinking It's very common for people who are selling their idea about investing in something to be so convincing and confident in their arguments, that it puts a level of confidence in you. Put your emotions aside when making any investment decisions. Don’t be overconfident Be careful about being overconfident about an idea. Remember that the person selling the idea to you has been telling this story 1,000 times, they've figured out the hot buttons of the audience. They know what they're doing. No matter how smart you are, if you’re not careful, you can make mistakes with your money. Because smart people have feelings, just like everybody else.   Actionable advice Don’t make hasty decisions Before you make an investment decision, take some time out to yourself and sleep on it. Take a few days and let the emotion pass then see if that investment makes sense without the emotion.   “If you don't do things quickly, I think you'll always have a slow and less emotional approach to things and how you invest and probably do better off in the long run.” Max Weissberg   No. 1 goal for next the 12 months Max’s number one goal is to make the Karaganda film and have it in theaters. And also make a profit from it. This film tells the story of Vladimir, a prisoner in a Soviet prison camp on a mission to rescue his wife, a journey that will transform him into a powerful crime boss in Brighton Beach, Brooklyn. Max’s greatest desire is to prove that the crowd-equity model can work in the feature film industry too. So go on and support his crowd-equity campaign on Startengine.com/Karaganda.   Parting words “Be wise and get a good night's rest before you invest.” Max Weissberg   Andrew’s books How to Start Building Your Wealth Investing in the Stock Market My Worst Investment Ever 9 Valuation Mistakes and How to Avoid Them Transform Your Business with Dr. Deming’s 14 Points Andrew’s online programs Valuation Master Class Women Building Wealth The Build Your Wealth Membership Group Become a Great Presenter and Increase Your Influence Transform Your Business with Dr. Deming’s 14 Points Connect with Max Weissberg LinkedIn Website Vimeo IMDb Connect with Andrew Stotz astotz.com LinkedIn Facebook Instagram Twitter YouTube My Worst Investment Ever Podcast

... The consequences of not doing so can be brutal Guest profile Denis and Katie O’Brien decided to create a “Chain of Wealth” after having a tough conversation about Katie’s debt that was piling up. She had more than US$200,000 of debt that included student loans, a mortgage, a car loan, and negative equity. After hunkering down and reprioritizing what is important in life, they’ve managed to pay off all their debt in less than two years, all while getting married and paying for their wedding in cash!   “We often speak about the ostrich technique in terms of payment where you stick your head in the ground and you pretend it’s not there. Don’t do that.” Denis O’Brien   Worst investment ever Denis and Katie O’Brien met at a time when Katie was over her head with debt. Before they met, her way of dealing with the lingering debt was to bury her head in the sand and hope that someday it would all go away. Her anxiety over her piling debt was so much that she wouldn’t bring herself to check the mailbox. But the debts didn’t magically disappear. They followed her when she moved in with Denis in Washington DC. When the stack of bills came knocking in the mail one day, Denis decided that she was done burying her head in the sand and that it was time to deal with the debts head-on. Flashback to when all the mess started It was back in March 2015 or 2014 when she was dating a “smooth-talking dude”. It so happened that he needed a car but he had bad credit and therefore, needed someone to co-sign the car loan for him. After a couple of conversations, the smooth talker managed to convince Katie that if she cosigned a loan for him it would lower his interest rate allowing him to save money for other important things. He promised that this would not affect her in any way and he’d make every single payment. The ironic thing is that at the time Katie was driving an old 2002 Toyota Corolla, with all sorts of mechanical issues. She could have done with a new car! But here she was helping someone else to get themselves a new car she could barely afford. From zero car loan to negative equity Finally, she went to the car dealership with him and he picked out a pretty good car. Not a high-end car but still quite good and expensive, well at least for her. After the purchase, he told her that he had negative equity. She didn’t know much about negative equity finance. She knew that it wasn’t something good for your credit but she didn’t quite understand what the consequences were. What she didn’t understand was that after cosigning his car loan she had also inherited his negative equity loan. At this point, Katie had no car loan. She was a 26-year-old graduate, working a normal teaching job and living on her own. As expected, the relationship quickly came tumbling down as soon after the car purchase. As if that was not enough, the dude defaulted on the car payments. It now became clear that Katie had bitten more than she could chew. After chasing him all over trying to get him to make payments Katie finally went to a lawyer as she didn’t know what to do because the car loan was attached to her credit. The lawyer told her she had two options. She could either make him pay for the car or take it and deal with the mess on her own. She came home one night, she was living with her mom at the time, and in front of her house, there sat the car. He told her she could keep the car, it was in her name anyway. Bearing the weight of someone else’s negative equity So now here she had a car that she did not need nor could afford. On top of that, she had to pay off her ex’s negative equity debt of $20,000! This was a lot of money to pay off with a teacher’s salary. To say that she was distressed is an understatement. Other than having to pay off the car loan and equity, she still had to get his name off the title for fear that he could one day come and take the car back after she’d paid off the loan. A helping hand from her family She finally shared her woes with her mom and brother and they both did their best to help her dig herself out of her worst investment ever. Her mom went with her to a dealership to see how to make things better. Feeling like a bozo, she explained to the dealership manager what had happened. Going in, she thought she’d pick out a cheaper car, get his name off of it, and boom, she’s done and life can move on. Boy wasn’t she wrong! The manager told her that she couldn’t get a cheaper car because she had so much negative equity that she needed a car that would be able to cover a loan equivalent to the cost of the car. So now she was looking at $60,000 cars. The lowdown on negative equity on a car The reason why the dealership wouldn’t give Katie a loan was because she had no collateral. So it was high risk for them to give her a cheaper car but with an expensive car, if she defaulted, they’d have more to claim. Katie was now so frustrated that she didn’t even window shop for a car. She just went and pointed at the first car she saw sitting right on the showroom floor, a blue Honda Crosstour. She didn’t test drive it, she just signed the paperwork and left with a car she’d have to pay $663 a month for seven years. That amount was exclusive of insurance and everything else. Remember, she’s a teacher! While she had managed to get her ex’s name off the car by trading it off with a more expensive car, she also inherited all the debt to go with it. She had never envisioned her first car purchasing experience would turn out like that. Getting out of debt for good About a year and a half after buying the car Katie moved in with Denis and when the stack of bills came in the mail, Denis told her that it was time to get out of that mess for good. He told her that their relationship could not move forward until she got the debts in control. Either she would commit to pay off her debts or forget the ring. However, he was going to offer her all the support she needed to do it. Getting the debt-free plan together Denis, a chartered accountant by trade, got straight to work. He created an Excel spreadsheet and calculated everything. The total amount of debt Katie owed at this point was $200,000 worth of debt. Katie got so emotional and felt trapped. She simply couldn’t see how it would be possible to get herself out of so much debt. She had quit her job to move in with Denis in a new city. So how was she going to pay off that much money while jobless? After she calmed down, they took the Excel spreadsheet and devised an action plan. Denis committed to covering their basic living expenses and Katie committed to paying off her debt by the time she was celebrating her birthday that year. Selling off her assets To make it possible to pay off her debts Katie had to confront the possibility of selling off her assets. It was an emotional process but it had to be done. She had earlier bought a house for $100,000. Luckily, the house had appreciated and its value was now about $120,000. She was able to sell that for quite a bit of a profit. She put the $19,000 from the sale towards her car loan. Next to go was the car. It was now worth about $20,000. She tried selling it privately on Craigslist, and other car sale websites without any luck. One day, right before Thanksgiving 2017, she got fed up and decided the car had to be gone by Christmas. She took it to a random dealership and after inspecting the car, they offered to buy it for whatever amount she wanted. So she sold it off for $18,000. The sale was so easy compared to the turmoil she had gone through when buying it that she was a bit disappointed. She expected it to be harder. Getting down to zero debt After selling her house and car, Katie still had a ton of debt to pay off. She still owed about $50,000 in student loans and a small medical bill. They decided to pay off the medical bill first and then figure out how to pay the student loan. When Katie graduated, she had about $33,000 in student-loan debt but she deferred her payments. So when she started paying it back, she owed about $45,000. So it helps to start paying off student loans as soon as possible. They did more mathematics to see where they were with the debt and how much Katie needed to be debt-free by her birthday. It turns out she had to make payments averaging about $3100 a month towards her debt. Once again, she was in tears because as a teacher she was making about $2200 a month so she had a deficit of $900. She had the option to push back the dates and pay off the debt after her birthday. However, she chose to stay the course and stick to the goal of being debt-free for her birthday. Eventually, she did it but not without setbacks She picked up like a million side hustles. She did everything from charging electric scooters, to shipping books for an author, creating pins on Pinterest, tutoring, basically anything that could make her extra money. She managed to pay off her student loan about two weeks before her birthday. There were some setbacks along the way though. When they decided to follow the debt-free plan Katie had to get a job and she did. However, she couldn’t use the Metro to get to work. She needed another car. Remember, she had just sold hers. They ended up buying a car for $12,000, increasing the amount that she needed to pay off. However, this was much better than the $50,000 car loan she was paying off last time. Another setback was that they had their wedding coming up in July. Katie’s birthday is in May. So it was a very small gap in terms of saving up for them. They had committed to not going into debt for the wedding. So on top of paying off debts, they had to save up enough money to pay cash for the wedding. Commitment pays Katie’s commitment and hard work to stay the course paid off as they were able to pay for their wedding in cash. She also paid off all her previous debts. Most of the gifts that they got for the wedding were cash. So after the wedding, they had extra money laying around for the first time. As of last month, they are debt-free.     Lessons learned If you don’t feel right about something don’t do it Katie remembers the day she cosigned the car loan for her ex vividly. She had this nagging feeling in her stomach. While she didn’t understand the loan process, she had a sixth sense that told her something was not right about the whole scenario. Unfortunately, she ignored her gut landing herself in trouble with the creditors. From this she learned a huge lesson: if you don’t feel right about something, don’t do it because, at the end of the day, it is your name that will be on that line. You might think it’s just a stupid little paper, no big deal. But the creditors and the lenders do not feel the same way. At the end of the day, it’s going to be your tail working two or three jobs crying and exhausted having to pay that debt off. Understand what you’re signing before you put down your signature Never cosign a loan for somebody you’re dating, ever, or any other adult for that matter. But, if you must, always be fully aware of what you are signing up for. Do your research and make sure you are making the right decision. The decision you make now is going to impact you later on in your life. That piece of paper you put your signature on is legal and binding. You are going to be held accountable. Understanding the terms of that documents is therefore critical. Be deliberate with your debt-free plan One of the reasons why the couple was able to get Katie out of debt was because they were deliberate about being debt-free. They put a debt-free plan in place after figuring out where they wanted to go. If you’re in debt come up with a reasonable plan and follow through with it. Re-evaluate your plan now and then and always work on achieving the goals of your plan. Put your priorities in order The secret of how to become debt-free on a low income is to put your priorities in order. Like Katie, you have your everyday bills to pay off as well as different types of debt to clear. It’s a tough situation to be in but you can do it. Put your priorities in order, cut back on your spending and spend only on what is important and necessary. If necessary, work an extra job or have a side hustle on top of your full-time job. Then put all that extra money towards your debt to help pay it off quicker. Seek help from a financial advisor You may not have a Denis to help you stay the course toward a debt-free lifestyle but that doesn’t mean you should do it alone. Go to a financial coach and ask for advice. If you have no one that you feel that you can go to, go to a financial advisor, a professional in the industry who can help break things down for you. The truth is that you can’t do it alone, reach out for help. Don’t bury your head in the sand Pretending that the debt does not exist will not make it go away. Don’t practice the ostrich technique when it comes to paying off your debt. And that’s sticking your head in the ground and you pretend it’s not there. Don’t do that.     Andrew’s takeaways Don’t help others until you can help yourself It doesn’t matter how much you know someone, if you’re not financially capable to help yourself, don’t go helping them. You should refrain from cosigning loans at all, especially for people you’re in a relationship with because chances are it will get ugly. Don’t do things in isolation, especially where your money is concerned Even though you may feel confident in your decisions, always talk to someone before you go ahead and put your money on the line. Even the best professionals in the financial world talk to other people when considering their investment options. Don’t put your money where your heart is Never invest or get involved financially with someone you’re in a relationship with. Now, there are times that such things can work out. But it’s a danger zone. The best option is to not do it and avoid entanglements as much as you can. Have someone you can turn to for advice Identify someone that you can go to for advice even before you get into financial trouble. Ask yourself right now who your go-to person is. If you are in financial trouble, who would you go to? They could be a sibling, parent, colleague, or friend. Designate that person today so that when that financial event comes up, you have someone to turn to for advice before you make the wrong choice. Don’t get attached to things We’re all going to be dust under the ground someday. So don’t build up your life around attachment to the material things you have. Sell off that house if it will dig you out of debt and get you out of negative equity.     Actionable advice Katie and Denis’s advice is to be very aware of what you’re signing and understand the legal implications of everything you do. Just because you’re young is not an excuse for not understanding what you’re doing. If anything, that’s the most critical time that you have to fully understand what you’re doing, and do your homework.     No. 1 goal for next the 12 months Denis and Katie’s number one goal for the next 12 months, now that they’re finally debt-free, is to save up for a house. They are looking to put up a 20% down-payment in the next 12 months.     Parting words   “No matter how scary it is for you to face the debt demons, get it over with and face them now, because it’s not going to get any better. Katie O’Brien   “There’s a lot of great resources online about negative equity that you can use to make the debt load a lot easier.” Denis O’Brien       You can also check out Andrew’s books How to Start Building Your Wealth Investing in the Stock Market My Worst Investment Ever 9 Valuation Mistakes and How to Avoid Them Transform Your Business with Dr. Deming’s 14 Points You can also check out Andrew’s online programs Valuation Master Class Women Building Wealth The Build Your Wealth Membership Group Become a Great Presenter and Increase Your Influence Transform Your Business with Dr. Deming’s 14 Points Connect with Denis and Katie O’Brien Podcast Twitter Facebook Website Email Connect with Andrew Stotz astotz.com LinkedIn Facebook Instagram Twitter YouTube My Worst Investment Ever Podcast