188. What Losing $25M Taught This Entrepreneur

0:00When Damien Lupo was in his early 20s, he bought his first real estate with nothing but a$10 ,000 credit card advance and a whole lot of grit. He lived on$250 a month, split rent with a roommate, and hustled like his life depended on it. Because in many ways, it did. That bold leap eventually turned into a$25 million portfolio. But then, the crash came. Caught up in fast wins and faster spending, Damien lost it all. His properties, his investors, his sense of direction. At one point, he was homeless. But it wasn't the end. It was the moment he rebuilt everything, not just financially, but mentally.

0:34If you wanted to get started with financial freedom, the first step you need to take is fire the worst people in your life, get rid of the bad influences. I got sober, started over and built real wealth with purpose this time. This is your host, Ryan Atkinson, and you're listening to the Outfit Podcast, where we uncover the secrets of building and running successful businesses. Today, Damian runs multiple businesses, helps high income earners rethink retirement with EQRP and teaches people how to build real wealth from the inside out. I'm super excited to welcome him to the show. Damian, thank you so, so much for being here.

1:02It's going to be a great one. Thanks, Ryan. It's good to be here. Let's lay the foundation. Take us back. What was your relationship with money like growing up? And how did your parents' different mindset shape your own? So my mindset as a kid was that there wasn't enough. It was very scarcity. It was very Malthusian economics. There's like a limited amount of stuff and then you have to go get it. And that's the nature of everything. Meaning the first thing I remember was my parents telling me we had no money to buy the things I wanted, which in my memory at 11 was I wanted to buy video games.

1:28And they said, we don't have any money and here's how much we have. And that's not even enough to cover the house payment and food. So then I started feeling really guilty and I went and bought my own food. I'd go to the grocery store and I'd bring my own money and I had a pantry in my bedroom as a kid. And I felt like it literally was feeling like I need to support myself, which is probably a pretty dangerous thing to get kids to plop in their brain. And at the same time, it made me really resilient and kind of created a self-determined nature to me where if I wanted something, I was going to go create it.

1:54Most people, I would say, don't have that anymore. They're waiting for something to happen for somebody to save them. those belief systems were painful. I wouldn't say that they're necessarily horrible because that kind of pain as a kid creates grit and the ability to survive and thrive outside of that nest, if you will. I mean, I'm hearing 11 years old, like kind of like self-reliant at that age. Like I kind of like go back and like give you a hug. I mean, what would you tell that 11 year old self? That is like such like a mind blowing situation, like put yourself in. I mean, what would you tell that like 11 year old self at that moment?

2:22One of the things that you don't realize, especially when young or, you know, 11, 20, 30, you don't realize that you're going to get through things that you're most likely going to wake up in a year or 10 years. And you think that it's just really hard and people try to avoid the pain. And I would have said, you know, this is part of the process, just trusting it. I say that to people a lot, trust in the process. People are like, this process sucks. It's painful. It's hard work. And what they don't realize is it's molding us. It's molding us into the things and the person that we need to become.

2:49Just like if you hand somebody a hundred million or a billion dollars, if they're not that person that can embrace that, they're going to get rid of it, which is what all lottery winners do. So I would say, if you can trust this, your life is going to be exactly what you want it to be. It'll just be on its timeline, meaning it's not going to be what you want because we're lazy, greedy, and patient. We want everything now and we want to do it easy. And so that's the message. Just stick with the process. And the more people can do that at any age, the more likely they're going to have a life that's fulfilled and rolls out versus them fighting it the whole time.

3:17And let's just stay tuned because we are going to talk about getting started with like your own financial process here. But sticking to like the younger Damien, you started your first business selling video games as a teenager. what drove you to that young age to like take a leap? It's funny because I just wanted to play video games. And the problem was we didn't have any money or I was told that. And I thought, well, okay, as an entrepreneur, because you realize some of us were wired as entrepreneurs, we see the world as a series of problems and our brain goes to, how do I solve this? So I didn't say, well, just give me the money and cry like, you know, a big baby.

3:47I said, all right, how do I do this? And then it was, okay, well, I guess I have to hire my parents to drive me over to people's houses to buy the video games and then sell these things. But then it solved the problem. So it was, I think our brains either create problems, swim in the problems, or they're looking at the problems as opportunities. And apparently that's what I was doing at 11. That's how you get through life without getting wound up and stuck. You constantly look and ask yourself, how could I solve this? How could I serve people? So, so good. And speaking of serving people, let's fast forward a little bit then, because you bought your first property using just a$10 ,000 credit card advance, which I think is so funny.

4:19I mean, I love the risk there. What was going through your mind taking that kind of risk for a$10 ,000 credit card advance? and how old were you when you did that? One of the things about doing this, I was 22, is when you don't have years of scar tissue, you don't really think about downside. It's like when you guarantee debt, and we do this all the time. When we buy a house and we have a mortgage, we guarantee the debt. We don't think about that being an exposure. Like, let's say you bought a house. It was$10 ,000 in cash and$90 ,000 in a mortgage. What you don't realize is that you can have$100 ,000 on the line if you forget to have insurance and the house blows down in a hurricane.

4:50You may have to write a check to solve that problem. and what I'm getting at is when I was taking that cash advance out, I wasn't seeing any downside. I was like, oh, this is what you do, which is why it's so valuable to do these things as early as possible because you don't have all the hesitation from the scars. So at that time, I was like, yeah, it seems normal. You just go take out some cash advance from Chase and go buy a house and then figure out how to rewire it and do the plumbing and all that stuff, fall off the roof because you don't know how to stay on the roof. Seems normal as somebody that's ambitious and that's part of the process, would be willing to learn and stub your toe along the way.

5:20And if you embrace that, you get things done. Otherwise you get stuck and never move forward. That's what entrepreneurship is. When I first started my company, I had no idea what I was honestly going up against. I was young. I was 23, 24. I was like, you know what? Screw it. Let me just start this company. Let me just try something. You're so naive to it, but what you know now, obviously there are a ton of risk in that. And you do get that scar tissue. And we're going to talk about that scar tissue that you built up. But before we do that, let's talk about tasting wealth because that real estate investment took off and you reached 25 million.

5:49How did that early success change your mindset for better or worse? Well, one, it was this, oh, wow, this is actually, this can happen. And I remember even going backwards a little bit. The first time I got a$25 ,000 check for a real estate deal that I was doing. And I thought, wow, that's not quite as much, but close to what my parents made in a year and work in 2000 hours. It started to teach me that you can create wealth, that you literally money grows on trees. If you know how to go grow the tree, people mistake that there's a lot of work involved to get the money tree going. And so that was when that started happening, when I was out there building, I was really just grinding.

6:21I was farming, I was tilling, I was watering, I was all these things. And it happened overnight, except it took five years. That's part of the thing that people have to realize. They see all these instant reels of people making money and 25 million sounds like a lot and like overnight, but it happened because I happen to have taken a lot of action and then nurtured something for several years. And that's the key. You have to be willing to stay in something long enough for it to come full cycle and let the seasons support you versus trying to force something force is never going to work yeah i want to fill the gap in here as well like how that reached a 25 million dollar value talk to us at a very high level like how did you reach like that's i want to feel like the gap for the listeners because we are going to talk about the downfall and there is a big downfall but how did you build that much value it was one thing at a time it was going and buying those houses buying 150 houses in multiple states and expanding that and then literally harvesting a lot of those houses and when markets go up 10 15 percent a month, which they were in 2004 and five in a number of places, including where I had a lot of stuff.

7:16There was a lot of wealth, if you will. And that got leveraged into other projects. So it was what many people do. They win something and then they step up. They go from a house to an apartment to something bigger. And it was a lot of leverage and a lot of, okay, well, I can just, if I just think bigger, if I David Schwartz myself with the magic of thinking big or the art of the big deal with Trump stuff, it was really all about doing that. And it created that$25 million dollar, you know, golden tower of wealth. And then 2008 happened. And that's what we're going to talk about here. But I think it's important to speak here that golden tower of wealth.

7:47And if you go into the golden tower of wealth, you have the watches, the cars, like the lifestyle. I mean, when you're making this, when you're getting cut, you know,$25 ,000 check, but eventually probably like$100 ,000 checks. I mean, what are you buying at this time? I mean, you're still relatively young, but like, what are you like buying at this time just to really build that up? So 2005 was the first time that I went out and did something incredibly dumb, but also incredibly useful, which was buying a Ferrari that I saw in a bad boys movie. I thought this is a great, I'm going to be Will Smith.

8:13So I bought the same car he had in the movie. And that was part of that process. I wanted to experience it. Not a bad thing to experience. In retrospect, what I say now is if you can try before you buy, rent the experience, because that's really what I wanted. But I didn't really know what that meant. So I thought if I bought it, then I was worth something different than if I didn't own it. I just started testing those things and having experiences, paying for mentors that were really, really expensive for most people's vantage point, spending$10 ,000 for 30-minute conversations every month, doing that kind of stuff, all of it was valuable.

8:43There's not enough money for a jet. It's enough money to go buy a Ferrari and then join car clubs and eat all the expensive stuff and have expensive Johnny Depp wine habits. You can do that stuff. But then you realize it's actually, even with a$25 million portfolio, it's not enough. You haven't escaped financial gravity. And that was one of the things that I realized, which is why I kept going. Most people spend months, sometimes years, just thinking about starting a business. But what if you could do it in just 10 days? That's exactly what the 10-day business launch plan is designed for. It's a step-by-step roadmap that takes you from idea to real operational business in just 10 days.

9:19Click the link in the description below and get ready with your business. And I like the tidbit you added earlier on about lottery winners typically lose all their money just because they're not equipped to take in$100 million right away. And that's just kind of like the lessons you need to take though as someone building financial wealth. We're gonna talk about building financial wealth. So listeners, stay tuned for that. Let's talk about the downfall because that golden tower wealth eventually collapses. Like 2008 comes, talk to us about that moment and really what happens here. So one of the things I learned was that you're gonna way overestimate all of your upside and way underestimate your downside and the potential problems.

9:52Like I had seven different projects. I thought each one was gonna make Damian a million dollars each. And each one of them lost me at least a million, if not multiple millions. And all that happened in 12 months. So it was like everything, I was wrong. You have to really think about how wrong you could be and we don't do it. we're way over optimistic with the short term we don't even think about the long term the way that we should and we think oh here's my worst case scenario the reality is unless you've stress tested with some people that have been around for 25 or 30 years longer than you you will not stress test correctly i guarantee there are people that weren't stress testing the world trade center in 2001 the way that they should have been because they were like oh black swans well guess what black swans landed on our heads multiple times in the last 20 years and it landed on seven of my heads i was like you know i was like the medusa had all these heads and i had black swans on each one of them in 2007 and eight.

10:38And then I went, oh, okay. Lost everything. You know, everybody did like it was the investors, me, we all got creamed together and started over. And, and that was where I got to have my first taste of homelessness. And I didn't like it. I mean, that's a$25 million to homelessness. I want to like really emphasize that. I mean, are you like truly like losing those Ferraris, like losing that$1 million home that you bought? I mean, like, let's really zoom in on that. And like those emotions you're feeling during the time, the houses that i had that i was living in and i also had several i was in the middle of flipping foreclosed those things i had a house that i lived in that i bought the house tore it down built a big house a million five house and then the market said we don't like it then i remodeled it spent a quarter million dollars and then it got foreclosed on and sold for just over the amount i spent on the original house that turned into a lot so you know it was that and the other stuff everything was happening ferrari went away i remember when i tried to use my american express black card at Costco to buy stuff, including a bunch of toilet paper, and I got declined.

11:32And if you know anything about black cards, you can buy anything, you can buy a Ferrari on them. And everything got turned off basically simultaneously. And that's when you realize that wealth is not how much credit you have. It's a very important moment in time, because you realize that can be turned off, just like if all of your wealth is the number of subscribers you have on a certain social channel, that can be turned off in a heartbeat. So what's the value, the value is having your own personal list, just like having assets that aren't just the amount of credit lines you have, People don't think about those things until they have the experience.

12:01Or if you're smart enough, you have a mentor that's been around and says, hey, structure yourself like this. And you're smart enough to actually listen to it and be humble about it. So, so good. Yeah, I think that's just like incredible. 25 million to almost as your card is getting declined at like Costco. What you know now, though, what like beliefs or habits you think like directly led to your downfall? Was it truly like just a black swan event or were they're just like spending habits you had? I would love to hear that. part of it was ego and not understanding how and going into things and saying oh you know what could go wrong here and i didn't have the skill set i didn't have the experience and i didn't have the people around me with those type of things you don't have to know how to do all the things it's helpful if you know how to do some of the things but keeping people around you that are the experts and that was one of the things that i whiffed in 2007 and 8 i just had too many things where i was the smartest person and some of them i didn't know crap about and so i'm going into those going oh it'll all work out.

12:54And you end up getting taken advantage of and you end up making mistakes that you shouldn't have if you had the right team. So what I'm getting at is having the team around you that has more experience, more gray or bald. It's just people that have the wisdom because they've actually gone through it, stubbed their toes, bled in the streets and the mud and people's egos prevent that. They go, oh, I've made so much money. This is the problem with making a bunch of money too early. You start going, I am so smart and we're not. We're going to talk about making money here in just a little bit. But now when you think of like the word well today, I mean, How is your definition involved?

13:25And then we're going to jump into how people can build wealth. It's health and time. Wealth is this fuel. But it's interesting because I think Robert Kennedy said this recently, that everybody has all these dreams. Everybody that's healthy has all these dreams. But the person that's sick has one dream, and it's to be healthy. And so that's one of the things that people don't really, they take it for granted, especially people in their 20s. And they're like, oh, I can eat Twinkies, and I can eat crap, and I can do these things. And they grind, and they whatever. They make dumb decisions. And so when you start waking up to the reality of what wealth is, you realize, okay, it's time to do what I want that's meaningful for me and other people.

14:00And it's your health, because you can have all the money and all the time. But if you're just miserably hurt, that's the problem, too. So there's a point where more money doesn't change anything. And people can say I can make a bigger dent. It's like, all right, you're going to trade your time to create more money, even if it's leveraged, you're building businesses, you're investing, there is time. And that's the exchange. You can't buy more time back. you can exchange money for time that you spend, but you can't go and get more time back. People try to do that. They make all this money and then they're like, oh man, I got to figure out how to buy time.

14:28And then they're sick and dead. That's what I think is like one of the biggest benefits that I've experienced in entrepreneurship. I got into entrepreneurship for a couple of reasons. And I've said this multiple times on the podcast, my three W's. I get to work with who I want, where I want, which is a very important one. But most importantly, when I want, if I want to take off time, middle of the week, I could do so. Like having that time element is, I think one of the biggest drivers for entrepreneurs. And let's talk about how other people can get there. For some of them, that is working like a nine to five job right now with an average income.

14:56I mean, what are the concrete first steps they should take to build like a strong financial foundation? Let's get really tactical here. The first thing I'll say about anything financial is the best investment you're ever going to make is in your own personal development. I've spent millions of dollars the last 25 years on my personal development, whether it was tapes, books, mentors, seminars. I don't care what you're talking about, whether it's Bitcoin or real estate or gold or whatever, you won't get as much gain as you will from your own development. And when you go into something and say, okay, I'm ready to be molded by this stuff.

15:24And then you just become it. That's the tactical. That's the first step. If you're saying, okay, what do I buy first? Wrong question. Once you start going into that space, you can simultaneously go and start doing things. And the key there is doing them. Go and do the thing. Go look at a piece of property, go buy an ounce of silver, go buy, set up a Coinbase account. Why am I suggesting you go buy things? You're like, I don't have any money. I mean, some people will say that. And the reason is because you'll pay attention to things you pay for. Just like if you have a mentor that you don't pay, less likely to pay attention.

15:50If you go set up an account on Coinbase and you buy$10 of Bitcoin, everybody can do that, including the homeless dude that you're giving 20 bucks to at the stop sign. When you do that, you tend to pay attention and you dive deeper. If you're just thinking about it, you'll never go. So I mean, I bump into people, meet them at a bar and I'm like, hey, are you in Bitcoin? And they go, no. And I go, great, let me give you 10 bucks for the Bitcoin. And so we set them up. Why? Because it gets people started and then you have momentum. So tactically, whatever you're thinking about, take some action that gets you in the game.

16:17If you're not in the game, you're on the sidelines or in the stands. And that's not where the juice of life is. Yeah. And listeners, take note of that. Take action to get in the game. It can be Bitcoin. But if you're like, I'm not doing Bitcoin real estate, anything like that, have some sort of way that you can put a payment towards something to take action towards your first business. If it's a home service based business, if it's an Etsy store, a lot of people are going to chase that financial freedom. That's why people get into entrepreneurship. But what do you believe are like the non-negotiables for achieving financial freedom, like no matter your income?

16:45I think one of the non-negotiables is you got to know where you are and what are your trajectories. I have something called the MAP, the Millionaire Action Plan. And it's really, and people do this in different forms, you got to get clear on reality, like what is really going on? And you get clear on that based on your three C's, your cash, your credit cards, and your calendar. What are you spending your time on? What are you spending your money on? And the future money, what are you robbing the future you, you know, the prosperity? you get clear on that and then you say, okay, what do you want?

17:09And then is the path you're on going to get you there in the time that you're talking about? Getting clear about that kind of stuff is really powerful because sometimes people are already there and sometimes there's no chance they're going to get there. And you say, okay, now it's time for like, let's have an honest conversation. Do you want that future more than you want the current today habits? And people go, I do. And then, okay, so what's going to change? All right. After five o 'clock, it's going to be time for you to work on you. It's going to be, you're going to have that side hustle. If you don't do these things, then I can tell you your future is going to look like your present.

17:39You're just going to be older, wriggler, and more in pain probably. And you're going to be pissed off because time will go by without you. And the clarity and then being honest is most people don't want to do it. They kind of avoid it because it sucks to acknowledge, man, my habits and behaviors and choices and beliefs got me here. And it's why people try to tear down their people around them that are succeeding. Because when you succeed and I don't, and I know you, it's making my choices wrong. I don't want to be wrong. I want to go. I'm right. And if you're out there becoming financially free and you can do what you want, I'm saying, man, I made a mistake somewhere.

18:11That's why people try to tear everybody down to their level. It's what happens in nature. It's what happens with humans. Yeah. I think it's like, just like so important to like note that there, especially if you are trying to achieve financial freedom, you don't want to look, look back when you're, you know, 70 years old, 80 years old on your deathbed and be like, well, I wish when I was 20, 30, 40, I would have spent another hour or two hours. Of course, like everyone has very different habits, responsibilities, et cetera. So I'm mindful of that. A take that you have that I love here is that many people chase passive income, but you actually believe true passive income doesn't exist.

18:42Why is that? And like, what's a healthier way to like, think about that. I think about it like sex. If you have passive sex your whole life, you're going to have a spouse or a girlfriend or boyfriend that's going to leave. They're like, you are terrible. I don't want it. Like you got to be active in your life. And so people are like, okay, that's, they laugh about it. And they're like, well, I mean, that's true, but is that it can be different? It can be mailbox money. Everybody likes the idea of mailbox money. I'm like, all right, if you don't pay attention to it, guess what? That mailbox money stops.

19:05And then you just like, wait, what happened? So being active is one thing. Everybody's chasing yield. Everybody's trying to get cash that comes in without energy, but that's not how the law of entropy works. The law of entropy in the world, in the universe, you put energy into something or it dies. Like if you don't put energy into a house and keep it up, it'll eventually turn back into dust. It just will. And wealth is the same way. If you don't constantly nurture it, care about it, love on your money, people go, I don't love money. Man, I do. I love money. I think it's awesome. I think it's a cool tool.

19:34It doesn't mean it's a God. It just means I love it and I respect it. And when you get into that space, if you say, I don't care about money, guess what's going to go away? It's kind of like looking at your spouse and saying, I don't care about you. I don't, you know, guess what? They're going away eventually. Or they're going to go away emotionally and they're still going to physically be there and it's going to be terrible. so the passive stuff is you got to go active and the other reason that it's so powerful active engagement and building something creates 10 times 100 times more value than passive ever will i mean you can have passive you throw your money into a money market account you make four percent you know you're going backwards with inflation and everything else and so if you want to actually grow if you want to create you got to go build something you're not building anything with buying treasuries you're literally going backwards that's why you're losing purchasing power because you're not building anything.

20:20When you go active, you are building something. And that's where people go, oh, wow, I got this giant return because I was an early investor in Facebook or I built an apartment complex or I built a business. Yeah, you're building something. Notice it's not passive. It's active. You're not saying you can just have something on the side here where like you don't pay attention to. You need to be active and no matter what you're doing, because as your analogy said, like if you have a house and you're not building it, not restoring it, not taking care of it, it eventually does go to dust. I just want to clarify that as well, which I do love that analogy as well.

20:48Yeah. And even when you're thinking about like a lot of, like I have a lot of investors that invest with me in projects and you know, the ones that do the best, the wealthiest ones, they're the ones that fly out. They meet with people. They look at the investments, they get engaged, that's active. And other people are like, I'm just, I heard about somebody I'm throwing money and that's it. There's nothing else. And there's a different energy around people. The wealthiest ones are the ones that are nurturing it. They're loving it. They're protecting it. They're being respectful. They're being a good steward.