About the Author
I’ll try and keep this as short, sweet and as focused on finance as possible. Many readers of this book are also frequent visitors of my blog and have read this story previously. For those that haven’t, sit back and grab a snack or something. At any rate, like many of you, my financial autobiography starts in college.
I acted a fool in college and a Cal State was a joke to me.
The year was 1998 and from the first time I set foot on campus, I knew my plans had nothing to do with graduating. I was there to do something else. I wasnt sure what yet, but I knew it involved making lots and lots of money. This was perfect. I figured I could do this and at the same time have my loans & government grants “pay” me to live around a bunch of cute girls and…to…well…also make lots and lots of money. Plus I could handle myself… my ability to make money would always overshadow any loan amount I would ever take out. Also lets not forget that I had just graduated from a prestigious magnet program and had the ability to get into any school I chose should I have cared. The fact is, I never once pictured myself not working FOR myself at the end of the day anyways.
The scenes from my first two years in school was similar to that of Seth Davis’ experience in Boiler room. From scalping student meal tickets to selling pre-made research papers, I had successfully completed my freshman year. Then selling multiple classmates’ recently exposed pornos for $10 a pop (CSUN was and still is the capital of the porn star educational program) and starting a HUGE underground pirated media operation, I had officially completed my sophmore year. I was clearly not interested in class. I was and always have been…good…with creating money. This was the obvious part. The not so obvious part began to secretly take form behind my back as I decided it was now time to push the envelope ..just a little bit. Enough with the $4500 Acura Integra I was working with…it was time to match my income with a newly created image. And I realized I could do this rather quickly vs saving for it…all I needed to do was tap my credit for a specific type of loan.
Around the year 2000, I had more than enough money than I needed to be happy with…and MORE than enough money than anyone in college even deserved. But this was LA and that wasnt about to stop my next move. My impatience had reached a fever pitch, due largly to the fact that the more money I was making, the more money I felt I had to show I made. In addition, the more money I showed I made, the more GIRLS I realized I got. But wait…with the more girls I got, the more money I would need to keep making to maintain that lifestyle right? Who gave a f*ck. Plus, I was fresh outta Westchester High. Who really dreamed of graduating and working in a cubicle for the rest of their lives? Where I came from, we all thought we would either be Puff Daddy, Bill Clinton or JESUS. So I kept the lifestyle going…
Beginning of the “end”.
The best way to “pull a broad” back then and promote your image (and it could still be for all I know) was through the use of the right automobile. Forget the fact that I was 19…I decided I needed a 30k convertible with a $577 carnote. Plus I had just recently been approved for two Visas with a combined limit of $7500. And my good friend “The car dealer” (year right) encouraged me to use them when I hesitated to use my own money for the downpayment. Oooh they were slick. I still mark that day as the day that began the lost decade. Nevertheless, I bought it, took it home and never saw so many hoes IN MY LIFE. And wait…you cant have a car without a house right? But why buy one when you can lease one for $1750 and noone would know the difference? Done. Designer furniture? My weakness…plus the hoes loved it. Done. Brand new stereos, TVs, rims for the car along with brand new Akademiks and Sean Jean woredrobes? Done. Dont want the convertible any longer and thought a brand new SUV would be nice. Done. By the end of 2003 I had racked up 18k in debt. Same year I introduced DJ Slapahoe to the world.
It was the beginning of the year 2004 and I had to make a choice…either give up the hollywood life and move back home to Leimert Park or continue to commit financial suicide. Mind you, at this point I was in way over my head and many cards (during those years that I had never missed a payment, I was bombarded with new credit card offers and now was endentured to about 12 of them) had gone either to collections or were pending legal filings. I couldn’t even get a f*ckin extension on a damn traffic ticket. But the one thing I did have going for me was that I still knew how to generate cash and sell an image. DJ Slapahoe would get me out of debt… plus KG and I were selling mixtapes in 3 states, had every record label going crazy and was pimping ad space out to the highest bidder.I decided to set up operation from back home in Leimert Park and use the proceeds to get out of debt.
No rent/Life in a bunkbed.
Its amazing what you can do with $1750 back in your pocket every month. Scratch that….the true cost of living on your own far exceeds the rent amount. It was closer to $2100 when it was all said and done with utilities, maintenance etc. Nevertheless, I now had a plan and was setting aside at minimum 2k EVERY MONTH faithfully. Plus I had gotten a job at a high profile Ad Agency which provided the other key piece to this whole puzzle…the insight to the power of corporate greed and how these companies will sell you wind in a hurricane to meet their numbers. This would set up my “Malcolm X” moment that flipped my whole view on consumerism..even though it wasnt to fully come two years from then. But thats for another story. By the end of 2005, I had wiped out EVERY PIECE OF DEBT I HAD, and had long since begun a LIFESTYLE OF USING CASH ONLY FOR ALL PURCHASES. I also was starting to build up a very nice surpluss of cash in my savings ONTOP of not have an iota of debt. I had slain my enemy….and I had slain my enemy totally.
The 47th law of power states: “Do not go past the mark you aimed for in victory. Learn when to stop”. But then again Snoop said ” Now if I dont move, I dont lose..but you know me, I keep it mooovin”. I then decided to “purchase” a house. With my recent two promotions in the advertising agency, my cash only spending, in addition to being booked non stop for DJ Slapahoe appearances, I had never seen SO MUCH MONEY IN MY LIFE up until that point. Also at this time, the hoes (yes they were still hoes ..99 percent were typical materialistic LA women who I had most likely found while DJing in clubs) were complaining about having to come through to someones parent’s apartment. I couldnt have this.
Mind you, even though it had started to recover, my credit was still pretty much jacked. But even knowing this, my goal of what I perceived to be “homeownership” pushed me to save up a TON of additional money between the start of 2006 and some of 2007. I too credit this to my cash only spending along with the decision to get rid of all of my cars (including my recently purchased 350z convertible) all while practicing my new discipline of living well below my means. I had also begun to teach myself investing though it was still only in the VERY early stages. Actually, I was able to take advantage of stock purchase in the most compelling unveiling of a company product I had ever seen – Apple’s first iPhone. I dont need to tell you throughout the course of that year the stock had doubled….along with my money.
And guess what…in terms of socializing, I was everywhere…and spending nothing. I did more than people who were spending tons of money on themselves did. I was having more fun than ever and I had ZERO stress. DEBT is STRESS. As of now, I had no bill collectors looking for me. No interest rates doubling overnight. No one scheming on how to rob me for flashing too much stuff (that I techincally didnt own in the first place). And why was I no longer worried about being robbed? Because I had become smart enough to realize that those with true wealth make it invisible while in all my previous years of being broke and wrapped in lies..I BROADCASTED IT.
The great unplug.
It was February 2007, the month the house was “purchased”. $550,000.00. Over half a million dollars. I had gone from negative 18k in debt to what I thought was an asset I was holding worth over half a million dollars. How in thee f*ck? Oh yeah and putting a house on my credit alone pushed my my score back to the 670s from ontime payments throughout the months. So now…lets see: “Good” credit, zero non mortgage related debt, a budding investment in the stock market and now I had an asset worth half a million dollars to live in. Also during this time, I was continuing to work at the ad agency while djing at night.
I still remember the chills I felt when I heard it for the first time that August. I was flipping through the channels and I heard the words “Sub prime borrowers to potentially cause systematic credit crisis”. Huh? First..whats a sub prime borrower and secondly what is a credit crisis? Noone taught me finance yall..I just knew how to generate cash…and recently how to create a goal strong enough to influence me to save it. However, where I came from, I knew nothing nor was I ever taught anything about the art of investing it. I started to think about everything that had been going right recently. My stocks were going up (even though I had no real idea how it all worked) and people were lining up ever Saturday and Sunday at my complex’s main office to try and purchase the luxurious units to the right and left of me at higher prices than I had paid. How could this potential systematic whatchamacallit be true?
The first thing I did which removed a major matrix plug from my neck was read “Rich Dad Poor Dad”. I’m lying…back then “I didnt bes readin” like the two niggabots from Transformers 2. I listened to the book on CD. I was bombarded with new concepts of one’s home not being an asset and instead a liability. I found that you can learn just as much from your poor dad as you can from your rich dad. I also learned about society and the proverbial “rat race”. It was all such an awkward concept but it made me start to think. I actually HAD BEEN taught how to invest ALONG WITH how to spend my money. Society/Consumerism/Marketing/Advertising/Even the “long reaching tentacles of slavery” had been my professors and I had never even hired them. What was even more compelling was that for the first time, I had started to realize that everything I had been taught was in fact a lie. I then watched a movie that will completely wake your ass up about who profits off of this widespread ignorance, how they do it and most importantly WHY – The Matrix.
It was the end of 2007, the recession had officially begun and the anger I had from acknowledging the truth also forced me to be fed up with consumerism. I was upset at what I voluntarily had been setting myself up to contribute to…the continuation in the poisining of a people. I resigned from the advertising agency and dived head first into all things wealth creation…all things investing. Now at this point, an interesting thing happened. The world was going down the toilet..yet I was making 13k a month from trading. 13k while many of my friends were talking to me about how they were deep in debt and couldnt even find work. Even though once I dug a little deeper, I found that for many of them, using whatever money they DID have, still spent it on things like ipods, filling up their SUVs with $4 gas to make it to the club every weekend or at Nordstroms on shoes/handbags. Umm…is this what its like looking at the world from outside the matrix? Whatever it was, retail stocks were still going UP based off of America’s addiction to spending. And whatever stock sectors werent going up, they were sticking in a tight trading range allowing me to keep flipping them as if they were going up. I couldnt be the only one to benefit from this, I had to educate the troops.
November 2008. You may be expecting me to say, the month the market crashed. No.no no no no. This was the single best thing that could have ever happened. I had amassed an army of first time and newly awoken investors…all now with the potential to join in the single most powerful future creation of wealth in American history. At the same time, I was understanding my role in rescuing people from the grips I was previously been held in: excessive credit & debt, impatience, wreckless spending, living outside of my means and wanting to impress people that I really didn’t care about (read: hoes). Without the elimination of these things, they could never even get to the point to where they could invest . And even if they didnt WANT to invest, they could never get to the point of a stress free existance. And from what I had found, a life with awareness and without unneeded stress is the only thing worth fighting for. Everything else we strive for..or stress out for…becoming the next Diddy..or Donald Trump…even Barack Obama…just to justify our perceptions of what “success is” is.. is not the key to happiness.
What happens after those people reach those tentantive goals? Do they keep going? A lot goes on behind closed doors you wouldn’t believe..so are they really happy? Are they ever satisfied? Or do they acknowledge and implement rule #47?
This time, its war.
After someone is unplugged, the hardest thing to come to grips with is the enormous responsibility they now have in utilizing that truth – whether it be for good or for evil… whether it be for the general public, your own life or a combination of both. Needless to say, I honestly toyed with the idea of taking the newfound truth I had stumbled across about how the world really worked and then find ways to manipulate it to my advantage. I was now aware that excessive consumerism and widespread use of credit was something we had been conditioned to accept since birth. But I was even more curious as to, by knowing this, would I be strong enough now to not be suckered into its traps that claim so many others.
Back towards the beginning of 2008, my score had continued to rise due to the house I had recently “bought”. I soon started getting 0% apr Washington Mutual credit cards in the mail. Up until then, most of the credit cards sent to me were still the ones they send you if you have “bad credit” – those with $200 processing fees, secured cards and those with extremely high APRs. After closely reviewing the Washington Mutual 0% apr card, and telling myself I was now strong enough to game the system, I did what any person who’s one foot in and one foot out of the matrix would do- I opened that bitch up!
Within a matter of weeks, that led to me being sent 0% Juniper cards, Capital one cards, Crate & Barrel cards etc etc etc. I was on a roll and I was feeling like a true Jedi debt warrior who knew how and was about to game the system. I even took on a part time job in a stock broker training program with Wells Fargo to further learn the ins and outs of investing and the ins and outs of the credit/lending industry. It was there I learned and was encouraged to play the spreads each month. This simply means I would charge a few things I figured I would be buying anyways (groceries, gas, maybe an xbox..a new stereo…some furniture..oops) and pay them off before the 22 day grace period expired. Even if I slipped up for a month, since I was paying no interest on many of the cards, I was basically using the banks money for free until I decided to pay them. By doing so, during the grace period, I could put the cash to work in the stock market instead of “wasting it” paying typical monthly bills with it. After all, I believed the purchases i placed on these cards were the typical expenses I would have incurred anyways throughout that month, so why not do it? In addition, the worst case scenario was to pay each card right before the 0% introductory period ended in a few months.
Once the grace period deadlines came around, I never paid them off. I figured that since I was now so smart and could game the system, I’d just swoop in before the teaser rates expired and dead the balances.
I rolled my ass right on past those deadlines as well.
It was all fun and games until the interest rates shot up to 19.99 percent in the beginning of 2009. Also at the time, the stock market had continued to drop further than anyone had expected. But by doing so, it would almost completely take my income with it. I was now officially a typical American citizen again: officially in debt.
When managing both your and other people’s money in a declining market as your primary source of income, you have no choice but to sit around for the majority of each day in deep thought. You begin to realize you really didn’t need any of the crap you bought..especially the electronics and furniture. But hey..it was zero percent apr! And plus, I didn’t even get offered zero percent APR on the cards I got back during the FIRST time I got into debt.
The good news? It was only $8000 worth of credit card debt this time. The bad news? It was $8000 worth of credit card debt while I still had a mortgage, a car lease on an SUV, a paltry side income from a part time Wells Fargo gig and all while the economy had just fallen into a deep hole. In a normal situation I would have just taken it out of savings or sold investments to pay the balances off once the interest rates reset. But that money was the only money standing in between me homeless and me sheltered with food in my mouth.
I seriously needed to catch a break. Unbeknownst to me, I would soon realize I was about catch one and for the first time too.
By March, 2009 the Dow had basically fallen straight from 14,000 down into the 6000s. Everybody was hurting. Everybody was panicking. Everybody wanted to call it quits on their entire portfolios. All I knew were two things – what I should do and what I had to do. But did I do what I knew I should have and sold whatever investments that were still showing gains to pay down bills and beef up my savings in preparation for a world collapse? Nope. Instead, I emptied out my emergency savings, transfered it to my brokerage account and went all in.
Dangerous..stupid..idiotic decision. Never ever would I attempt to try it again.
But it worked.
Blessed/Lucky/whatever you want to call it – it turned out that WAS the market bottom and everyone who had panicked and sold were now chasing the market back up. The Dow was now on a nonstop explosion upwards. The new money I used from emergency savings was added to Apple computers and a few key solar energy names that would explode in value up 10 fold as the next few months would go on. I finally took a portion of each investment off the table and saw it as my opportunity to pay down these credit card debts. $10k in emergency savings had just turned into over $100k overnight and I was NOT about to allow myself to be in the soup kitchens of Los Angeles like so many of the stories that would flash across my news feeds. Even knowing all of this…I still wasn’t sold on the idea that I was holding a dangerous hand that could have turned really ugly if not for finding that one single, lucky streak. Yes, I still atleast partially believed in playing the almighty debt game.
Mind you, all throughout 2009 as I began teaching more and more people about investing, whether it be through Myspace, through Facebook or from meeting with them in person, I would start to get requests from people asking for me to show them how to get out of debt as well. It sounded like something that would help so I agreed. I then started posting heavily on Facebook about the debt elimination methods I was using. Yet the real goal was still to teach people how to INVEST. The idea was if I could help them avoid getting into too much debt, then they would have more money to invest. By teaching minorities how to play a game that was only reserved for wealthy caucasions, they would be able to side step the fates of their parents and make enough money to change both their current situation and their future.
It wasn’t until the initial group of people I was helping, started telling other people that they knew to give me a call, that I would sit down with one troubled girl in August of 2009. She was a recent CSUN graduate who it turns out had recently been 2 seconds away from successfully taking her own life due to her HUGE $72k debt problem she had gotten herself into. She flat out, in my own home, told me that the three weeks before she was referred to me that she had unsuccessfully attempted to kill herself.
At that very point, I would begin to realize the truth about risk/reward. I would see the big picture and realize that she was infact me, without the break I had just caught in the stock market. She did all the same things that I had done until that point – play around with 0% interest rate credit cards, purchase a house (only hers was zero down), take on years of student loans etc. She did everything except for jumping on the few winning market trades I had recently made (by the grace of God) which would get me out of debt. I began to see my future in her very eyes. I also saw the potential futures of a lot of other people I had recently consulted with in the black and latino communities. I asked myself what on earth is really worth it to ever end up in anywhere close to a position like this? Even if it doesn’t get to where you attempt to take your own life and you do somehow get lucky enough to balance out a long life of debt, is the stress really worth it? To have new cars to show off around L.A.? Designer clothes to impress people you don’t like? To buy houses that come with extremely high payments you’ll end up scrambling each month to make over the next irreplaceable 30 years of your short life?
She wouldn’t know it at the time but the anger I felt from her situation and my newfound realization of the bigger picture, would completely fuel my decision to publish a set of 5 articles under the title: “‘War on Credit’ “. These articles would also provide the basis of the book I would begin to write.
Over the days/weeks/months that followed, I would do a tremendous amount of statistical research on how debt affects various races differently in America and watch tons of documentaries on credit and debt in America as a whole (including Zeitgeist, Money as Debt and Maxed Out). With an already existing anti-consumerism stance and a now completely anti-credit stance, I was compelled to devise a plan to reduce the amount of everything materially that I owned down by 85%. Afterall I would have to fully live out what I would preach to others in the community. The hard part? One thing within that great 85% material item purge would be “my” condo I had recently purchased.
Now why get rid of “my” condo you may ask? Well because first of all, I had finally learned how to do math. The $550k mortgage I was paying on calculated to be a total of $1.3 million dollars in payments over 30 years! Even if the condo appreciated in value by double, I would still take a loss after all of those years. THEN I would be responsible for a now 30 year old house with 30 year old maintenance, increase property taxes and insurance. But most importantly, I plugged the $3,300 I was paying on mortgage/real estate expenses each month, into a stock market compound interest calculator and saw that I could have a total of $7,856,355.96 instead, at the end of that same 30 year span.
And what could I do with just the interest alone being earned on $7,856,355.96? Even if I earned a paltry 5% annually in a safe CD or government bond, that means I could live on an annual income of $392,817.79 per year. (pre-tax)
So then what could I do with $392,817.79 a year? I could live anywhere on the globe! I could rent a condo in Costa Rica for the month, then stay 6 weeks right off the water in Greece. I could buy a house a year or start 4 businesses. I could even put a large portion back into my nest egg and watch that amount grow. My options are nearly unlimited.
After months of working closely with hundreds of minorities within the L.A. area, I had all of the motivation I needed to live up to my promise and carry out my great purge. Then by July, 2010,10s of thousands of dollars worth of designer furniture, Xboxes, Harman Kardon receivers, subwoofers, designer clothes, a small amount of jewelry, credit cards, a 3 bedroom condo and a new Mazda CX-7 SUV had been either sold or turned back in to the bank. The few things I still owned: (1) 2007 Nissan Sentra (1)16gb iPhone 4, (1) 32gb iPad, (1) 17″ Sony Vaio Laptop computer, (1) electric razor, (2) suitcases full of select clothes, (2) small boxes full of important files and one budding portfolio of stocks held online. This was every material thing I owned on earth. I was just shy of turning 30 years old. With this new beginning, however, I assured myself that the next 30 years of my life would be NOTHING like my first 30.
Yes, it turned out that my credit score was completely shot from getting rid of the house and closing all the credit cards. Yet none of that mattered to me in the least. I had never felt so free in my effin life. I had never really felt as if i had the ability to do anything before that point. I also had never seen so much wealth in my own bank accounts and brokerage accounts either. Regardless, I knew that was simply paper wealth. The true wealth would come from the feeling I would get from not keeping this new found knowledge only to myself but instead by using it to end the cycle of povery first, within my own community, and then the world. After all, this time, its war.