546: From a Negative Net Worth to FI in Just 5 Years by Living Like a Stoic

0:00Hello, and welcome to the BiggerPockets Money Podcast. My name is Scott Trench and with me today is my co-host, the she-wolf of Wall Street, Amanda Wolf. Bigger Pockets has a goal of creating 1 million millionaires. You are in the right place if you want to get your financial house in order because we truly believe financial freedom is attainable for everyone, no matter when or where you're starting or what your investing philosophy may be to get to financial independence. Today's guest, Darius Faroo, is an international landlord, business owner, author of eight books, and a financial educator who vowed to change his financial destiny by using the virtues of stoicism.

0:35Yeah.

0:38Stoicism kind of pops up every once in a while if you've been paying attention in the world of personal finance, tech, business. And a lot of these kind of thought leaders are really into stoicism, it seems, or practicing stoics. I can label Tim Ferriss, the author of The 4-Hour Workweek, as someone who has talked about stoicism. I believe Mr. Money Mustache is a follower of stoicism. And so it kind of has this alignment with a lot of people who are in the financial independence retire early space. And for others, it may be a little off-putting because they don't really understand it or don't know what it is, or maybe in some cases don't like some of the people that it's associated with at the highest level.

1:17And today, we're really looking forward to defining what it is. I have dabbled in stoicism the way I've probably dabbled in Bitcoin in the past. And I think it's a really fascinating school of thought. It's a philosophy from ancient Greece that really talks about how to pursue joy. And there's a variety of techniques that go along with that, including understanding how to endure hardship, how to think about the worst, the worst case scenario, plan for it, accept it, and then rejoice. in the fact that it has not come true at this point yet. And there's a lot of tie-ins to the discipline, the philosophy.

1:56I'm doing a bad job explaining it. Our guest today, Darius, is going to do a much better job as we move through today's episode. But there's a lot of really interesting tie-ins that Stoic philosophy has that are congruent with building wealth, like controlling the controllables, especially in the context of downturns in the market. And it's also congruent with reaping the rewards of financial and professional success at the same time. So a lot of appeal to a lot of folks, and you may find yourself in alignment with a lot of the principles, even if you're not a practicing stoic. Darius, welcome to BiggerPocketsMoney.

2:32Thanks for having me. Darius, where does your journey with money begin? So I have a classic immigrant story. I was born in Tehran in 1987, and there was a war at the time. So my parents fled the war and went to the Netherlands, which in terms of economy and mindset and culture is very similar to the US. The only thing that we don't have is guns. But other than that, in terms of our mindset and culture and the fast-paced society, it's practically the same. So I grew up in the Netherlands and my parents not having much money, always living from paycheck to paycheck. So in my household, it was always about money or actually the lack of money.

3:19So when I grew up, I always felt this tension. And I don't know why, but even from a very young age, I always knew what was going on, that we weren't financially well off. So that somehow created some responsibility with me. And I always had this very strong desire to become very wealthy. and not just because I wanted to have a nice car or any other young boy's dream when he grows up, but I just wanted to have freedom and not to worry about money. So that desire really started in my childhood. And as I got older, I started to get more interested in the stock market and investing. And that's how my journey really began.

4:09Wow. So just to take it back one step real quick. So do you still live in the Netherlands today then, Darius? Yeah, but pretty much all my readers are in the US. So I started writing like 10 years ago. But I don't know, somehow the US readers connected more with my message. Okay. Okay. So and then at what age did you move to the Netherlands? And do you remember because you said, you know, money was part of that story the whole time or the lack thereof. So when did you move to the Netherlands? And do you remember some of those first memories around money or the lack thereof? Yeah, well, I was a year and a half.

4:45So I don't remember anything from those times. But growing up in the Netherlands, I always noticed that, you know, we weren't in a great neighborhood or, you know, when I wanted to get something, there was always argument about it at home. when I wanted to have a new Nintendo console at the time, I looked at my mother was going through these mail-order catalogs and talking about, yeah, we should get this, and then my father not being cool with it, but eventually I would get my Nintendo. So I would get the things that I wanted. So in terms of I don't feel like I really missed out on certain things, but it's just the emotions and the feelings that were around having the things that we wanted or any like a normal child would want to have.

5:49So those were really my first memories growing up. So how did you begin making movements to building wealth? Where does that journey begin for you? Yeah. So I always wanted to have a job when I was in high school because all of my friends at the time had jobs and my parents told me to focus on school because also classic immigrant story, a lot of immigrants, their parents realize that, you know, one of the best ways to become financially better off than yourself is to encourage your children to get educated. So that's what my parents also did. And they told me to get a job after high school. So I waited and during the summer after high school, I immediately went to apply for the best paying job at that time, which was to work in a call center.

6:45And I thought, wow, that's great. I just have to sit and make a bunch of calls and I'm getting paid pretty good money. So that's what I did pretty much like six days a week, my entire summer and saving everything that I made because that was my first taste of making money. And I realized how hard it is because, you know, you just show up every single day and you have to do what you're told. And I made the money and I was like, yeah, I'm not going to spend this. So I just saved everything. Yeah. Yeah. So then, so you, you get your first job. Now you have money and it's, it sounds like probably the most money you really had ever been exposed to.

7:25Right. So now you're like hoarding money. So when, when was it that you really started building the wealth? Right. Because just hoarding money isn't going to allow us to actually be able to build wealth. So like, what was your mindset like back then, you know, in those beginning years when you, when you started your, started working? Yeah. In those beginning years, I really didn't know what it took to build wealth. I watched movies like Wall Street, and I thought, wow, these folks are making a lot of money buying, selling stocks. Maybe I should do that too. So that's how I got obsessed with the stock market.

8:01And basically, it wasn't until like 2015 that I finally figured out how to build wealth over the long term. And in those early days, you know, basically from the time I was 17 till the time I was like 29 or 30, I just made one mistake after the other. I bought stocks and I sold them when I was down 60%. I thought that getting educated is the answer to becoming rich so I got a master's degree and I specialized in finance and I read pretty much every investing book there was and I could just I couldn't figure it out I had no clue what I was doing and I was making a living but I wasn't getting wealthier.

8:59I was saving and that's great, but as we all know, there's limitations to saving. So I was always looking for the answer to getting back to, particularly in my case, the stock market, because that was the thing that I always wanted to get into. And also, So I've been interested in real estate and I got into that as well. But the stock market always had this very big pull on me because I felt like it's the greatest wealth builder on the planet. You can just do it from any place in the world. It's so easy. And that's exactly what makes it so hard. And it wasn't until I discovered stoicism that I found out that managing my emotions was the most important thing because all those years that I failed was because I didn't have my emotions in check.

9:58And I always made the wrong decision because I got too consumed by my emotions. So when I finally discovered stoicism, I started to apply the philosophy to my investment strategy. After this quick break, we will get into how stoicism played a role in your journey to FI and what happens next on your wealth creation endeavor. AutoTrader is powered by auto intelligence, the hyper personalized way to buy a car. AutoTrader's tools sync with your exact budget and preferences to tailor the online car shopping experience totally to you. Budgeting lets you input your info to see listings in your price range.

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11:4675 % of their borrowers have been repeat customers over 17 years. They offer investors an 8 % preferred return paid monthly and a 70-30 LP-GP split of everything over 10 % paid annually. The lockup period is nine months with liquidity available within 90 days after that nine-month commitment. The fund is open to accredited investors only. The fund's minimum investment is typically$100 ,000, but Pine Financial is able to reduce that minimum for some investors and have agreed to do so for BiggerPocketsMoney listeners to a minimum of$25 ,000. Full disclosure, I am personally invested in this fund through my self-directed IRA, and of course, Pine Financial is sponsoring this message and our podcast.

12:28If you'd like to invest or check out their prospectus, go to biggerpocketsmoney.com slash pine today. That's biggerpocketsmoney.com slash P-I-N-E. Please note that returns are not guaranteed and may vary based on fund performance. My husband and I have multiple investment accounts across several different companies. Throw in vehicles, investment properties, and private equity holdings, and it can be difficult to get a good idea of our actual net worth. And frankly, between the kids, work, and just life in general, I don't have time to be logging into 47 different places. So I just didn't. Scott walked me through setting up my Monarch account, and suddenly everything was easy.

13:05It's all in one spot, so I can check in quickly. Just like everything else on Monarch, the dashboard is customizable, so I can see at a glance what's most important to me and dive deeper when I need to. Feel organized and confident in your finances with Monarch, an all-in-one personal finance tool that brings your entire financial life together in one clean interface on your laptop or your phone. And right now, just for our listeners, Monarch is offering 50 % off your first year with code pockets at monarch.com. Don't let financial opportunities slip through the cracks. Use code pockets at monarch.com in your browser for half off your first year.

13:42That's 50 % off your first year at Monarch.com with the code POCKETS. And welcome back. So Darius, it sounds like you started with nothing, you know, as a teenager working this job in a call center. And again, like the pivot point that I really want to get into next happens in 2015. But, you know, it sounds like you developed a lot of skills during that period. But can you give us some indication of the amount of wealth you were able to accumulate? that I presume you didn't go those 10 years and not accumulate anything. You accumulated something but didn't maximize your potential from a financial standpoint.

14:18Was it hundreds of thousands, millions of dollars? Yeah. In terms of a number, I had about 10 ,000 to my name in 2014. So I started a business with my dad in 2010 as I was writing my master's thesis. And this was in, you know, after the financial crisis. So there were not many opportunities because I wanted to climb the corporate ladder. And I thought to myself, this is a great opportunity. So we started a business in industrial laundry equipment as a wholesaler. And being an entrepreneur, I just paid myself enough to rent an apartment. and I still remember like my salary was about$1 ,300 or something and that's where I would live on and because we live in cost of living where I live in like an hour outside of Amsterdam was at the time really low, it's much higher now.

15:26So I didn't build wealth, I just learned skills and I learned business and then I thought to myself, well, I don't have any money. I have a lot of experience. Our business is doing well. My father is starting to earn more. Let him enjoy that. I'm going to find a job. And that's how I ended up in London at the IT research firm, Gartner. And that's where I learned how corporations work and working in sales and account management, et cetera, cost of living in London so high that I almost spent my entire salary every single month. And I performed well, so I earned some bonuses. But after a year, I realized I'm still not building any wealth.

16:25My net worth was just a few thousand dollars at the time and after a year of being in that red race and spending all my money on rent and just going out and you know things that you do when you live in an expensive city I realized I have to stop I need to find out the answer I need to start a business or I need to start something because I need to start building wealth. And at the time I was 28, 29. So at that time I came back to the Netherlands and I moved back in with my parents. And I, from what I recall, like my savings were about 10 ,000, the equivalent of$10 ,000. And I still had, I think I was paying off my student debt a little bit, but I still – I think I had more student debt than$10 ,000 as well.

17:25So I had a negative net worth at that time. Okay. And so at this point, you have this negative net worth. You're frustrated. It's been 10 years, and you got nowhere, right, on your wealth building journey, and that's been a primary motivator. What changes? What's the aha moment, the revelation that you have? And how do things change and you begin to get this thing on track? And because we've already set it up, how does stoicism play in? Is this where stoicism enters your journey? Yeah, 100%. So I felt really stuck. I wanted to earn more. I wanted to build wealth. In my mind, I thought by the time I'm 30, I should be financially free.

18:09You know, when I was in, you know, business school or when I was doing my master's degree, I thought, you know, yeah, just give me a few years, I'll figure it out. And then a few years went by, nothing happened. So I was really stuck. And I started to look for the answers in books. I started reading nonfiction books, personal development books, business books. and I like so many folks who start an online business I read The 4-Hour Workweek by Tim Ferriss and in that book he has a small section on stoicism and he talks about how it's great for dealing with the entrepreneurial roller coaster so I was really curious and I started to read the original works of the Stoics like Marcus Aurelius and Seneca, Epictetus.

19:08And I was immediately hooked and it gave me clarity. And at that time, so I came back to the Netherlands and I thought to myself, I'm going to start some type of business. And I didn't know exactly what that was. So I thought to myself, I have this opportunity to write a book because I always wanted to write. I had this desire to write, but I never had something to say. And after these years of struggling with my goals and not being able to accomplish them, I thought, you know, I should write a book about the inner turmoil that comes along with that phase of life so i sat down i started to write a book and it's called win your inner battles and i published it and i thought maybe i should start a blog to you know tell people about it and i started to publish on social media or, you know, created a social media account and started publishing on Medium.

20:15And all of a sudden, I had a bunch of articles that did really well. So that's how I really got started in this. And it was really the philosophy of Stoicism that gave me the confidence to just ignore all the noise and focus on myself and focus on my skills and put them into practice. And that's how I really got started on this entire journey that I've been on now, because one of the things that I also learned was that if you become among the top performers in your industry, you get significantly higher rewards than if you are average or somewhere at the bottom. And that's directly also from stoicism.

21:08The philosophy of Stoicism is not really about, you know, being an emotionless person who never reacts to anything and isn't harmed by anything or whatever. It's about challenging yourself to become the best. And that's what I love the most. And when I read about that, I thought, you know, I need to be the best at what I do. Darius, I love that you just kind of clarified that for us of what stoicism means to you because I think that the word carries a lot of weight in society today and I think it can be associated with things that – it can have a little bit of a negative connotation is what I'll say.

21:55So the whole suppression of emotions, which is obviously just really, really unhealthy. But it sounds like from your side, you're saying it's more around intentionality. That's what it sounds like to me. Would you say that's kind of on track with what you think stoicism is? Or what does it mean to you? And what does it not mean to you? Yeah, definitely. And it's good that you brought this up because people generally think that the word stoic, which we often have this negative relationship with, the lowercase word stoic, where a person who's stoic, we think of, I don't know, this old person maybe went through the war or something or is not reacting to anything.

22:45and is emotionless, but doesn't have anything to do with the philosophy of Stoicism. And at the same time, there are also a lot of folks online who have read a few Stoic texts or quotes and interpreted completely wrong as in, oh, I need to use this to show that I'm so macho or so cool that I don't feel anything and I can deal with anything in life, I also don't think that's true. Because if you read the works of the Stoics themselves, you'll really learn that it's a philosophy of empathy and having understanding for yourself, but also for others. Because one of the things that I also love about some of the Stoics, particularly Epictetus is that he is known as a very stringent philosopher that says yeah just focus on what you control if someone in your family or a loved one dies keep your emotions in check etc and of course that's very hard to do but at the same time he also says if a loved one is upset find a way to console them you know don't say yeah it's wrong to have emotions right and and that's i feel like a lot of folks um don't understand how to to use the philosophy to become a better human being and i think that's ultimately the the power of socialism It helps you not only to challenge yourself to become the best version of yourself, but it also helps you to deal with your own emotions and other people's emotions as well.

24:44We're about to get into how the stoic philosophy gives us a strategy that we can apply to stocks and real estate and how it helps us handle losses in a portfolio as we move toward financial freedom. We'll be right back. When I evaluate debt funds, I look for things like first position loans, personal guarantees, deep experience by the fund operator, low fund leverage, fast liquidity, and consistent returns. These are some of the reasons why I'm excited to partner with Pine Financial Group. Their fund six offers investors exposure to real estate credit, largely for construction and rehab, largely here in Colorado, with loans originated by an experienced originator with over$1 billion in origination volume.

25:2375 % of their borrowers have been repeat customers over 17 years. They offer investors an 8 % preferred return paid monthly and a 70-30 LP-GP split of everything over 10 % paid annually. The lockup period is nine months with liquidity available within 90 days after that nine-month commitment. The fund is open to accredited investors only. The fund's minimum investment is typically$100 ,000, but Pine Financial is able to reduce that minimum for some investors and have agreed to do so for BiggerPocketsMoney listeners to a minimum of$25 ,000. Full disclosure, I am personally invested in this fund through my self-directed IRA.

26:01And of course, Pine Financial is sponsoring this message and our podcast. If you'd like to invest or check out their prospectus, go to biggerpocketsmoney.com slash pine today. That's biggerpocketsmoney.com slash P-I-N-E. Please note that returns are not guaranteed and may vary based on fund performance. My husband and I have multiple investment accounts across several different companies. Throw in vehicles, investment properties, and private equity holdings, and it can be difficult to get a good idea of our actual net worth. And frankly, between the kids, work, and just life in general, I don't have time to be logging into 47 different places.

26:37So I just didn't. Scott walked me through setting up my Monarch account and suddenly everything was easy. It's all in one spot so I can check in quickly. Just like everything else on Monarch, the dashboard is customizable so I can see at a glance what's most important to me and dive deeper when I need to. Feel organized and confident in your finances with Monarch, an all-in-one personal finance tool that brings your entire financial life together in one clean interface on your laptop or your phone. And right now, just for our listeners, Monarch is offering 50 % off your first year with code pockets at monarch.com.

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28:25So, you're about to make a trade based on a friend's text. But which you do you listen to? Is it, we could buy a house in Tulum? Get optioning those options. We could lose everything. Or let's do a little research. Get your head in the trade and make the investment decision that's right for you. Learn more at FINRA.org slash trade smart. And we're back. Yeah, and I want to get into how stoicism can shape your strategy, especially as it relates to real estate and achieving retirement. But first, how does this translate to finance overall? Yeah. So when it comes to finance overall, I think that any type of financial decision that you make comes with emotions.

29:19So if you have kind of a operating system for managing your emotions and making sure that you're always balanced because I think that's the ultimate goal to feel that you are in control of life. And we can't control what happens to us, but we can control how we respond to the things that happen to us. And especially in finance or in investing, whether it's in real estate or in the stock market, things are thrown at you all the time. And you don't control those things. I'm a small real estate investor. I own two rental properties. And over these years, I've had just a few small problems with tenants.

30:13But it always happened at the wrong time, when I was on vacation. you know or when i was going to through a you know remodeling project of my own house so it always happens at the wrong time and it can you know kind of piss you off or at least can piss me off when those things things happen but that's my first response then i need to remind myself that I don't control what happens or when things happen. I just need to look at my actions because that's the only thing that I control. And I think that you can basically apply this strategy, not only to your investments, but also to your spending. Because especially with social media, I just have to spend like five or 10 minutes on Instagram.