In early 2009, a broker friend of mine asked if I was ready to start investing in commercial real estate. I was a property manager at the time and my personal finances were a mess. Unfortunately, I had to wait and told him to think about me the next time around. I had a burning desire to be in a real estate deal and realized there was only one thing I could do to get there: grow up.
When I was a child, I spoke as a child, I understood as a child, I thought as a child; but when I became a man, I put away childish things. 1 Corinthians 13:11
Here comes some embarrassing stuff…
My big, goofy secret is that I used to have a room FULL of comic books and toys. I’m not bragging, far from it. There are many people who have bigger collections and have spent more money. Looking back, I’m embarrassed at what I had accumulated and how much I spent doing it.
Friends who saw my various collections would tease me and say, “You’re like the 40-Year-Old Virgin,” a reference to the movie starring Steve Carell. I hated it when they said that.
First, it was an embarrassing reminder that my collecting had gotten out of control. I mean, seriously unchecked. Second, I hated being teased about liking comic books, toys and vintage video game systems.
When I came home from the Army in the early 90s, I started buying comic books in earnest. I’d read them while in junior high school but quit when I entered the 10th grade. There were more important things to spend my money on (my car, for example). However, when the Army sent me to Germany, I ended up with extra cash in my pocket and free time to read. It was there that I rediscovered comics and fell in love with them again. When my tour in the Army was over, I returned home to go to college with a new habit in tow.
My habit quickly grew to an average of $25-$40 / week at The Comic Book Shop. That was a huge number for me at the time. It’s still a big number now. That spending always went on my credit card, but I didn’t care. The Comic Book Shop was the greatest place ever for a nerd with plastic money.
My early love for comics twisted into buying issues in the hope they would go up in value. The early 90s was ripe with comic book speculation. The comic industry pushed variant covers to get guys like me to buy three or four versions of the same book. They hyped mega-events to create a frenzy and encourage new buyers to enter the market. I bought several copies of the “Death of Superman” (Superman #75) because I thought it might be valuable one day. I never even read Superman.
My collecting habit soon spiraled out of control. From comics, I moved into toys. I bought collecting magazines before visiting thrift stores and garage sales in hopes of picking up cool, vintage toys. Then I rediscovered my love of vintage gaming. I had an Odyssey2 when I was a kid (an Atari 2600 knock-off) as well as a Commodore 64 computer. Before you knew it, I had almost every vintage gaming system that was made.
For a bit, I cleaned up my act after reading Dave Ramsey’s Financial Peace and stopped collecting. I practiced the envelope system and worked myself out of over $46,000 worth of debt. It was amazing. I had never felt so free. But just like a smoker who returns to the habit worse than before, I returned to collecting with a vengeance. Only now the comic book scene had changed by migrating online to places like eBay.
My salary had risen so I was no longer interested in buying just regular comics. I started buying CGC (professionally graded) comics. Some of these that I bought were approaching $500 or more. Yes, I had officially lost my mind. I had purchased CGC graded copies of Iron Man #1 and #2, Conan The Barbarian #1, Fantastic Four #48 (the first appearance of the Silver Surfer) and many more. Those CGC comics alone cost me several thousand dollars.
Another embarrassing financial admission…
About this time, I read Larry Winget’s You’re Broke Because You Want to Be. The basic premise of the book is this: If you didn’t want to be broke, you would make different choices. I was always struggling for money, but I couldn’t figure out why. Reading the above paragraphs it seems obvious, but when you’re in the middle of a problem, it often takes an intervention. I read that book, nodding dumbly along, thinking, “Yeah, personal responsibility. I’m all for it as I’m a responsible guy.”
Then Winget wrote, “… I have noticed from working with people who have real money issues that most have huge DVD collections. So if you see yourself getting too many, you might want to stop and think about it.” I stared at those sentences in horror. Then I reread them, a pit growing in my stomach.
One of my proudest accomplishments at that time was to show my friends a collection of over 660 DVDs. Winget had written about a woman who had over 200 DVDs in her collection. He held her up as an example of being out of control. I had three times as many DVDs and I was proud of it.
I had been called out with those two sentences. To this day, I still recall the utter embarrassment I felt in reading that. There has been no more motivating passage than that to help me clean up my finances.
Turning It Around
I set about changing my spending habits almost immediately. No more comic book purchases. No more DVD purchases. No more thrift store runs with my buddy.
I also set myself to ridding myself of all the foolish purchases I had acquired. I went to work on eBay listing each toy, collectible, antique, etc. I also sold the CGC comics as well as any collectible non-graded issues. The issues that were run of the mill (ie. not valuable), I listed on craigslist. I ended up selling almost 3,000 comics for $300. They were the last of my collectibles and I just wanted them gone.
I kept a spreadsheet of what I sold. I showed this to a friend of mine who was also having some financial troubles and who also collected high-end comics. Birds of a feather, right? He paid me a commission of 10% to sell his professionally graded comics. I gladly took the extra money and sold his books along with mine.
It felt like a second job. I would come home at night and log into eBay. I would see what items had sold and immediately begin packing up boxes for delivery. Then I would run them to the local post office the next day. It got so they knew me by name and would often ask what items I had sold.
In the end, I had raised almost $11,000 from selling my collectibles. Did I make money on them? Some, yes. However, I lost far more than I can imagine. I couldn’t even start to count how much money I lost on the “run of the mill” comics.
Even the DVD collection is astounding to think about now. I didn’t buy all of them new, so if I figured each of them was $10 per DVD, that was over $6,600 worth of discs sitting on a shelf doing nothing. That’s a startling number to contemplate.
A couple years later during my divorce, I gave my ex-wife the entire DVD collection. I didn’t want to fight about ‘stuff’ – it didn’t seem worth it. After the divorce was finalized, she gave me half the movies in a gesture of kindness. There were some really great movies in the collection, but there were also some amazing duds. I can’t believe some of the horrible movies I actually purchased.
Do you know how many of those DVDs I’ve watched this past year? Maybe three. How many did I watch the year before? Probably the same amount. Sitting on a bookcase, in my basement, is still over $3,300 of DVDs that are now worth hardly anything.
What Happened After I Raised Those Funds?
In 2010, I bought my first commercial building in a partnership structured by my broker friend, Kevin. He had a three-bay retail building under contract for $200,000 and said he was looking to bring in four equal partners. He said I could jump in for $12,500. Luckily, I was ready then.
That first building has led to nine more. It also led to a continuing friendship with Kevin, who is a very open and motivated partner. We talk almost daily and he’s been my go-to-guy to bounce ideas off.
The process of selling my “stuff” started me on a path to better financial behavior. I’ve worked harder and saved more. I focused on getting myself somewhere better. Where that was exactly I didn’t know at the time. I just knew it had to be better than where I had been.
I also stopped buying endless toys, collectibles and other items in an effort to fulfill myself. My purchasing of stuff was an indicator of a deeper problem as the divorce later revealed. However, I’d been buying many of those silly things before the marriage had ever begun. I’d had the problem for a lot of years and hadn’t learned how to control myself.
It took the motivation of wanting to invest in commercial real estate and a written smack down to set me on my path.
The real problem is often between your own two ears.
To reach my goal, I had to realize I was the problem.
I was the guy who kept putting myself in a tough situation. I wouldn’t say ‘no’ to buying all sorts of stupid things. I was my own worst enemy.
Before my situation could change, I had to change.
Look around for opportunities to raise cash.
If you need to raise cash to get yourself out of debt or for another reason, you often have to go the extra mile. Whether that's a second job or selling some of your stuff, you do what you have to do.
I thought those comics and toys meant something to me. At the time, it seemed painful to get rid of a CGC 9.2 Iron Man #1.
However, now every month when I update my financial spreadsheet I think about what it took to get that first building. I remember the effort I put into raising the funds and would do it again in a heartbeat.
How Are You Spending Your Time?
I wasted my time and resources accumulating stuff. For a while, I convinced myself that all of those comics and toys would actually appreciate in value. Some did, but most didn’t. If I would have properly invested the money, I would be years ahead.
There are plenty of other distractions out there and we’ve all seen them. From baseball cards to beanie babies to collectible beer cans (yes, this is a thing), you can waste your time and money chasing things that won’t provide a long-term cash flow, nor give you and your family security in the future.
How about you? Have you experienced something similar?
I'd love to hear you story.