My Journey in my 20s

My 20s are admittedly mostly a blur.  I graduated college at 21 and lived in Newport Beach.  After college, I traveled through Europe for 6 weeks and went to 9 countries and 13 cities with a backpack and my buddy Will from high school.  It was a pretty epic trip.  If you ever have a transition in your life and you have time to take a trip, get a backpack and a Eurorail pass and just go.  You won’t regret it.


After I returned, I started my job at an engineering consulting firm.  Our company’s largest client was Chevron and we basically ran permits and pre-construction tasks for gas stations and conversions from the old service/oil bays to the new Foodmarts they have today.  I started off just running to building departments and planning departments dealing with permits for project managers, but pretty soon I was running projects.  I got promoted a few times over the first few years and the people at the company were hilarious and fun.  It was still a job, but at least it was fun.  Money-wise I did okay, but the real benefit I received was running multiple projects and multiple tasks at once.  This was a huge skill when I started my web design company and had to deal with numerous clients and projects at once.

The one thing I can say today is that through all of the years and jobs and companies, I was always able to learn at something new.  My first paper route (when people actually read newspapers) taught me how to run my own little business.  I had to collect money for the paper and pay the newspaper company and make sure everyone got their papers on time.  I had to deal with customer service (when a paper landed in some bushes). I had to learn responsibility and get my arse out of bed every day at the crack of dawn to get those papers out and on the weekends when everyone else could relax.  The engineering company taught me how to prioritize projects and tasks and work with multiple people over different companies and agencies.


The time I spent working at the engineering company coincided with the rise of the internet, around the mid 90’s.  The more I learned about the web, the more I realized that it was going to change lives and provide an opportunity for me to create something.  My buddy from college wanted to start an online magazine for colleges and neither of us knew anything about the web, but we started ZERO Magazine anyway.  To be clear, I knew nothing about the internet, how to design in it, nor how to code in it.  So, I started researching and figured it out.  I self taught myself how to build web sites, how to host them and then learned Photoshop to create the graphics I needed to add to the sites.  Admittedly, my first web sites were not amazing, but it didn’t matter.  People were paying $100,000 for crappy web sites at the time.


We worked on the magazine web site for a little while, but it never gained a lot of traction.  As I kept learning how to design, I decided to start building web sites for companies.  My friend decided to sell web sites and I quit my job at the engineering company to work full time on web sites.  There was only one problem.  My buddy wasn’t very good at selling web sites.  He must have told me 10 times that he was ready to sign some deals and they were closing.  Then, days went by and weeks and months and we barely had a few projects; definitely not enough to squeeze out a meager living.  So, with no money and rent due, I had to figure something out quick.  I lived in Orange County and ended up getting a job with another friend all of the way up in Glendale (about an hour and a half away with no traffic) for IHOP corporate.  I got $15/hour to create marketing materials and graphics and worked on employee manuals.  It was a big step back in earnings from the engineering company, but I learned more and more about web design and graphic design and picked up how to design using software for laying out print materials.  I never took classes.  I was self taught.

After IHOP, I still didn’t have enough web business to make a living so while I worked on my business, I got another job at a company that competed with TicketMaster and sold tickets for sporting events and concerts.  I ran an affiliate program and tried to get web sites to add links to concerts and events we had tickets for in exchange for commissions on sales that came from their web sites.  That company paid me a salary and commission on deals I brought to the table.  If I was more of a hustler, I probably would have done a lot more sales on my own for my web business and made enough money to live without working for the man.   I continued to get better at web design and continued to bring in small clients while I worked for the ticketing company.  Well, that is until they found out I was doing projects at work and I got fired.


The internet was blowing up after I lost that job and was unceremoniously walked out the door.  For the simple reason I had “entertainment” and “internet” listed somewhere in my resume, I received a call from Warner Bros.  They wanted me back up in Glendale to work on an internet division called Entertaindom.  They thought I would be a perfect candidate to manage a division for double my previous salary, LOL.  Obviously, companies were pretty desperate for internet “experience” and were paying a lot for anyone who had any experience.  How could I pass up working for Warner Bros?  Again, I was commuting every day, but they let me come in at 10am and leave later so I didn’t sit in traffic.

At that job, I started meeting other industry people and wound up with a deal with Warner Music through my side web design business.  I designed web sites for Enya, Stevie Nicks and Reprise Records along with some smaller musicians.  I got paid a lot to do those projects and with my salary from Entertaindom, I had enough to buy my first real estate property, a condo in Orange County.


I started to get tired of the drive to Los Angeles and I wasn’t going to move there.  On top of that, as I discussed the entire business model behind Entertaindom with other people who worked there, I realized it wasn’t going to take long before their model was going to fail.  As it turned out, I left that company right before the dotcom crash in 2000 and Warner Bros folded that division soon after.  At Entertaindom, I picked up a new skill; managing people and a lot of drama between said people.

After leaving Warner Bros, I took a job managing the web division of a software company called Sage Software.  Well, I thought I was managing the division.  It turns out, all of the decisions were made in the UK and I was just an order taker and more of a production guy brought in to make web site changes.  That was boring so while I got paid a really good salary, I kept the job and worked on my side projects while I waited for directions from the UK.  After a year, the company found my side project files on a drive and, again, I was unceremoniously walked out the door.  By this time, my web business was starting to make some money.  I was averaging about $3,000/month in revenue.  It was good enough to pay my bills, but not enough to retire from the workforce.


By this time, I had been trying to get my web business going for about 4 years.  It was making good side money, but I had to keep going back to work while I grew my revenues.  My last job was working for a company called Fancy Publications, the largest pet magazine publisher in the US.  They published Dog Fancy, Cat Fancy, Horse Illustrated and about 10 other magazines.  I handled all of the web sites for the company.  I worked there for about 2 years until a college friend showed me how to market my web business on Craigslist.  Two things happened for me, 1) I found a way to generate really cheap leads and grow my web business to about $4,500/month, 2) I discovered I could make passive cashflow from hosting web sites and charging $20/month and only paying about $2/month for each account.

When I left Fancy Publications, I was officially done with the corporate world!

I had enough money from my web business and from cashflow to never have to work for anyone again.  I had roommates to share expenses and the money from my business covered my car payments, my rent and utilities and food.  I didn’t have a family to support, but I was officially free from having a boss forever.  I was 28 years old.


By the end of my 20s, I learned the following:

  • Companies gave me free money if I contributed to my 401(k).
  • You get fired from companies if they catch you doing side jobs while on their dime
  • I could buy a property and pay less money than rent if I had roommates and low monthly payments
    • I also learned a valuable lesson in real estate – if you have the money and you can make it work, buy a property.  Just make sure to buy a property you can afford and that will allow you to also save and invest
  • I learned about passive cashflow with my hosting fees


My Journey in my 30s

I made the mistake of squandering all of the money I earned in my 20s AND through my mid 30s.  I had some money in retirement accounts by the time I got married (for the first time), but it really wasn’t a lot.  It was at age 35 that my life and my financial life would change forever.  I had no kids and was traveling the world in my early 30s when I met a girl and she had kids (yes, plural).  When I realized that we would be settling down, it was obvious that we weren’t going to live in my 3 BR condo so all of the going out and wasting money had to stop immediately.   It meant I had to make enough money to take care of a family and save for our future and more immediately, a home where we could live (did I mention her mom was moving in as well?)

The minute I changed my mindset and actually had responsibilities, everything changed.  I looked at my crappy financial picture and said it’s time to start saving and getting rid of my debt.  It’s time to change my spending habits and focus on being able to take care of a lot of people and not just myself anymore.  At the time, I was living with a roommate knowing I had about 9 months to figure all of this out and how to finance a home that we could all live in and be happy.

Leading by example, I paid down as much of my debt as I could as fast as I could.  My web business was generating about $150,000 per year of which $100,000 was profit so I had some money to work with.  I stopped eating out, going to bars, spending on clothes and looked at ways to save.  I had a small condo with three rooms and one roommate.  I brought in another roommate to cut down on my mortgage expense.

The period we’re talking about was in 2009 right after the big real estate collapse.  On one hand, it was great because homes were going into foreclosure left and right.  On the other hand, getting a loan when you were self employed was literally impossible.  I was able to do two things over the next 9 months.  The stock market was in shambles so I invested some money into beaten down stocks like Bank of America (trading at $5 per share) and into some other stocks.  Through those investments I was able to generate $20,000 in profits.  From the profits of my business and reduced costs from my mortgage and spending, I was able to put away about $7,000 per month.  Over the next 9 months, I was able to save up approximately $70,000.

When the 9 months was up, I was astonished and super pissed off at myself for the first time.  I was able to save and put away that much money in 9 months? I was pretty blown away by my own accomplishment while simultaneously pissed off that I had saved nothing nor invested anything up until that point.  While I squandered my money in my 20s and 30s and saved close to nothing, here I was with a goal and a plan and a drive to reach that goal.  Unreal.  If I just had some goals earlier on, I would have been much farther along in my path to financial freedom.

My fiancee at the time and I were able to find a house in north county San Diego for $547,000.  The home was in foreclosure and many other homes just like it were selling at bottom dollar.  My timing was great at that time and my goal was to put down 20% to get rid of the PMI.  I also needed some money in an emergency fund in case of an emergency.  I did borrow some money from my parents to put down on the house and a few months later, we were in and I had a roof for everyone.  Here are some great things about that house:

  • It was inexpensive enough that I was able to provide a roof for everyone and more importantly, it allowed me to save extra money to pay off my parents and not have to stress about a mortgage payment that would rule my life
  • I was lucky to purchase the house when the market was at its lowest.  I knew that it could only go up in value.  That said, over time, almost all real estate increases in value over time so even those people who bought their homes at the top of the market in 2008, were rewarded in 2021 with insane housing values.   While your house is probably your largest investment, don’t get caught up with the value.  It will go up and down.  The one thing you should keep in mind is that you can always look at interest rates or ways to cut down on the monthly expenses for the house.
  • When I bought the house, I knew that the monthly payments were low enough that if I had to move, I could easily rent the house and make positive cashflow.  I purchased the house near a military base and the officers that worked about 1/2 mile away had a housing allowance close to $3,000 per month and some would receive $4,000 per month.  My house expenses on a $417,000 loan with a low HOA and property taxes came to about $2,200/month.  My worst case scenario if I had to rent that house out was a positive cashflow of $800 per month.


The best part of the story?  If you have been paying attention, I owned a condominium in Orange County.  I could have just sold the condo and used that money to put down on the house.  The condo I had for 7 years had equity and was cashflow positive from the rent.  At that time, the housing market was as low as it could be, so while I would have been able to get some cash out of the condo, the value of the property was low.  My goal was to generate enough money to purchase a new home AND keep the asset I had generating money.  Was it hard?  Yes.  But at the end of the year, I reached my goal and I had purchased a home that was far below value in bankruptcy and another property generating some positive cashflow.


I moved into that house and got married and my wife and I had a baby boy.  It started out great. Into my late 30s, I started focusing on setting up retirement plans and worked on budgets so the family would be taken care of and we could travel and do fun things and still save money for retirement.  There was only one problem.  My wife didn’t believe in budgets or controlled spending or any of that saving stuff.  No matter how hard I approached the topic, she felt that any type of budget was some sort of “control” issue.  What was supposed to be the beginning of an amazing family dynamic became the most challenging time of my life.  We had an American Express credit card that had to paid off every month.  I stayed at my office late and tried to figure out how to pay off a credit card that was 3x or 4x as much as when I was living by myself.  To make matters worse, my wife lost her job and stayed home and shopped more.  It was not awesome.

Data released by financial firm TD Ameritrade found that 41% of divorced Gen Xers and 29% of Boomers say they ended their marriage due to disagreements about money.  This is where your financial journey can be the most affected.  When you decide that you want a life of financial freedom and you don’t want to work until you’re 65, you absolutely must have a partner who can work with you and not against you.  How can you save money when your partner is spending it and doesn’t have the same goal as you?  This is where the disagreements come in and fights and then stress.  Marriage wasn’t fun anymore.  I sat in my office day in and day out trying to think of ways to pay my bills and generate more income to save, but my wife kept spending more and more.  I started to have some mental breakdowns as I couldn’t keep up the monthly spending much less saving for anything.

I’m pretty sure you can all guess what happened next.  Bye Bye spending wife.