4 Of My Most Painful & Silly Business Mistakes | The Growth Booth #43

Welcome to episode number 43 of The Growth Booth, where I'm going to do another couple of episodes, so 43 and 44, where I'm first going to walk you through some of the most embarrassing, painful, frustrating mistakes that I've made over my journey of building an online business. Not just that, but also from a financial standpoint and an investing standpoint. I'm going to get started with that today and I'm going to share some things that are pretty painful and embarrassing and that I probably haven't shared before. And then in the next episode, episode number 44, I'm going to talk about some of my biggest wins, and hopefully, that will remedy some of the heartaches that I've had to go through to pull out these examples with you here today, and I'm not just looking at this from a financial standpoint.

In fact, some of the most painful mistakes are things that may have happened a decade ago or over a decade ago, which might not have cost me all that much money, but at the time it may have felt like a really significant amount versus some mistakes they might make today, which could cost me six figures but don't feel quite as painful. As my mindset has shifted, my business has grown, and the situation, in general, has changed. My hope with these couple of episodes is that you're going to be able to learn some lessons, some important lessons from some of the mistakes that I've made and also from some of the wins. I think that you've got a chance to embrace these and make sure that you don't fall into the same traps that I've fallen into. And like I said, in the next episode, we'll talk about some of the more memorable wins.

Let's just dive into this right now. The first mistake is quite a recent one that comes up for me. This wasn't that painful but definitely reminded me of a few things that I should have known better. It's to do with crypto. This is a juicy one in a nutshell. I dived headfirst into crypto. I followed some, to be fair, pretty shady advice around crypto, and I ended up losing about 95% of the money that I put in, which was about $21,000. So, I lost $21,000. I must have put in about $23,000 to give you a point of context here. What I was doing was grid trading, and this is where I would set a price in the future that I want to buy a crypto coin or crypto token. So, for example, I could say, “Look, I'm going to buy this coin, this token, for $100. I want to sell it if it goes to $101. And if it goes down to $95, I'm going to buy more of it.”

I'm essentially establishing a series of orders for the future, and the way that these work are every crypto coin is going to go up and down, up and down, up and down in nature. If I'm buying and selling all the time, selling when it goes high and buying when it goes low, then I make money. And it works really well in a sideways market. It's actually something that's been done for a long time in ForEx, foreign exchange. However, it only really works in the space of crypto in a sideways market. It's pretty hard to get it going when the market is down-trending or up-trending. And to give you some numbers here, when I lost most of the money was in November 2021 when bitcoin plummeted from about $60,000 down to $36,000, and a lot of the altcoins and other tokens and coins and crypto really followed the same sort of path of that.

We saw about half of the value of the crypto market wiped out in just a couple of days. And that was pretty bad for my business. The lesson I think here for you is don't let your excitement get the better of you when you are investing in something new. It was definitely learned for me. It was new for me. I was learning all about it, and I did learn a lot from it, and it's been a valuable education, but I didn't really need to spend $21,000 to get that education. I could have gotten the same education with $5,000. But when something is going well, and it was going well for me at the start, I was in a situation of, “Okay, let's put some more money in, let's put some more money in,” until the point where things went south and I ended up losing a lot of money. The saving grace for me is really lesson number two for you here, which is that I understood at least to some degree, the inherent risk. I was only investing money that I could afford to lose. So, $21,000, I haven't lost that. It wasn't something that I couldn't afford to lose. It wasn't something that I was going to get overly stressed about. I mean, that was the saving grace, really, and why I was able to take it on the chin. It was one that was money that I could afford to lose. That's the first big mistake for you here.

The second one that I've got for you here today is related to property. I've got a significant property portfolio and I've mainly had wins, but I've had a smattering of losses as well over the years. Recently, I sold a property in Auckland, an apartment, for $50,000. Now, in 2015, I bought that apartment for $250,000. So, I lost $200,000. I sold it for $200,000 less than what I bought it for. But over the seven years that I had it, I was also making rental income, so I would say at an estimate, I lost $150,000 on that. That was a property that I owned in cash, so I didn't have any mortgages or anything like that with it, and I think this one really falls into the bucket of bad luck.

This is a building that I personally lived in about 15 years ago, so I knew the building pretty well. I've got a very good knowledge of the market. This is in Central Auckland in New Zealand, and I did my due diligence when I purchased it. Turns out that they discovered not long ago that the building had water tightness issues and a major rework is going to have to be undertaken to get the situation right. In fact, the cost of the rework is probably going to cost more than the building itself. One of the potential solutions there is to demolish the building. If we were talking about a car, this would be considered a write-off. Major problem.

I often thought, “What could I have done differently here?” I don't think there's really much I could have done differently. I mean, I did my due diligence when I was purchasing. Everything was fine. I'll tell you one thing, I'm glad I didn't have multiple properties in this building. I used to have a couple in here, but I sold another one just by chance a few years ago. I'm glad as well that I don't have all of my properties in the same style of building. In fact, a few years ago, we started really diversifying our property portfolio and moving into the Manhattan New York property space. That's about as far away as you can get from Auckland. I have had other examples, instances where I've owned multiple apartments in a building where the building has then had issues and as the owner, you have to fork out a lot of money to solve those issues, and it's not really a pleasant thing, but there's not always a way that you can know this before investing.

I think the lesson for me is that with all things related to investment and in a particular property, any kind of investment or business though, don't keep all your eggs in the same basket because these unforeseen or even unknown events can happen. They're called ‘black swan’ events, and this is where unexpected things happen. No one was expecting a COVID-19 pandemic, I don't think anyone was really expecting the Russian invasion of Ukraine and all the havoc that has wrapped, and not to mention curve balls in your personal life, which can come up all the time. So, again, this was a pretty big, costly mistake, although I don't know if it's a mistake that I really could have avoided all that much. I do feel good about having a diversified portfolio. The reason, by the way, I decided to sell that is because I figured that if I could get some money back, I was going to be in a better situation than having to pay multiple hundreds of thousands of dollars to get the property fixed. I've taken that money out of there and reinvested it in another way, actually in index funds, which I think is an interesting opportunity now to get investing in index funds.

Now another pretty costly business mistake that I've had that comes to mind is just bad partners. I feel lucky that I have had very good business partners for the most part, but there have definitely been one or two rotten apples over the years, and this has caused issues. In fact, the one example that I'm going to share with you today is someone who turned out to be a felon. I mean, this guy was a criminal, and not for some misdemeanor, but for some pretty serious crimes. He was introduced to us by a friend who we entirely trusted and came with good references, but no one ever mentioned his criminal history. Our friend knew about it, but I guess he sort of forgot.

So, mixed feelings about that. We had a pretty rocky 18-month ride, and the venture ended up sort of imploding. It's amazing how just this one single bad apple spoiled the whole bunch in that business and we shut operations down, went our separate ways, and we haven't spoken again. There were a lot of shady things that this person was doing behind the scenes in that business. So, I think the lesson here is to go in small steps when you start a new partnership and try to protect yourself, so know who you're dealing with when you're getting into something.  Now, this is sometimes easier said than done, but I guess the other side of this coin is some of the biggest wins that I've had, and I'll talk about this in the next episode, have been in the partnerships that I've gone into. When you are moving in full faith with a new business partnership, it can pay off massively. I guess in hindsight I could have done a little bit more due diligence on this bad apple that we ended up partnering with, and we might have avoided a lot of financial stress, difficulty, intention, and distraction. Distraction is one of the biggest ways that this bad partner sort of impacted us. We didn't get to the point of needing to go down a legal path, but the distraction was absolutely massive.

I think the last lesson that I've got for you here or the last big mistake that we made was investing in creating my own franchise where I had a lot of inexperience. A few years ago, we rolled out a franchise across the UK, the USA, Canada, Australia, and New Zealand. It was a significant-sized operation and we did right by all the franchisees. However, we got caught up in some red tape, particularly around franchise law. And again, this didn't impact any of our franchisees. They were all taken care of and didn't have any issues, but there were definitely a few issues with legal things that we had to sort of put right. We definitely got a slap on the wrist from some agencies that basically find us for not quite having some of the paperwork in place, and again it got all sorted, but it turned out to be a massive distraction again and costly for us. It could have been avoided if we had had more experience, and even if we didn't have experience ourselves, we could have drawn on some more experience there and I think that would have allowed us to sidestep a lot of this. I guess one of the curses of being an entrepreneur is that you want to do things and you want to do things quickly. You want to have ‘things done yesterday’ was certainly the case for me and sometimes that results in moving too fast. I think there's a saying that money is like speed, and I think I'll talk about this again in the next episode, but sometimes, every once in a while, that speed can cause you to derail or get hurt.

I think just to close this out with some final thoughts here, trial and error is a really poor way to learn. I think that any way, any time you got a chance to learn from the mistakes of other people, you should do that. And that was one of the reasons why I wanted to put this content together for you today in this podcast episode, so that you can learn about some of our mistakes. I absolutely love reading memoirs and biographies of successful people because I feel like I can pick up on parts of the journey that really worked well for them and sometimes, especially on the parts that didn't work. I think I'm really going to need next week to re-live this heartache and pain that I'm feeling right now because I really love talking about these different opportunities, these different headaches that we've had along the way. It's kind of an interesting experience actually to dig up. If someone asks you what are the worst mistakes that you made and you start digging into that, it definitely pulls up a few emotions that I wouldn't recommend necessarily wanting to experience all that often.

Anyway, that is a wrap for this episode here. You can go over to The Growth Booth and navigate to episode number 43 to see the show notes and to see the transcript. To see the video version of this, you can also follow us on YouTube. If you go to YouTube and search for The Growth Booth, you'll find that every single one of our episodes is up there in video format. If you're going to do that, then hit the subscribe button so you get notified. And if you are listening to this podcast, be it on Apple or on Spotify on TheGrowthBooth.com directly or on whatever your favorite podcast platform is, I would love it if you could subscribe and give us a five-star rating. If you're enjoying this as well, that's going to help spread the word organically about this podcast and help or allow more people to find us and listen to us.

I really do appreciate that you've taken out some time of your day here to listen to this. Make sure you tune in next week when we're going to be talking about some of the biggest wins, financial successes, and cash windfalls that I've had in my business. I'll see you in the next episode.