Before the mortgage bubble burst, Dave Charlson had a successful mortgage company while maintaining what he thought was a great work/life balance. He was kind enough to share his story with us in this episode of How to Lose Money.
By the end of his ordeal, the total loss in personal assets and real estate reached $1 million.
But from the ashes of that failure, Dave reached a greater understanding of himself and discovered a way to help others in their struggles for growth and personal development.
Here’s a look at Dave’s story.
Green Flag: Work and Life in Balance
I graduated from college with a degree in mathematics. I thought I wanted to be a teacher, but I soon realized that I hated it. When I left my teaching career, someone suggested doing some informational interviews with people in different fields to help figure out what I wanted to do. This led me to talking to a woman who ran a mortgage bank; she hired me on the spot.
Eventually I started my own mortgage company. At one point, I had 35 employees. I had a 4-day work week, which was pretty unheard of at the time. I had a healthy six figure income with a home on the coast of Oregon and another in California, and I was home every night for dinner. I also started teaching classes to realtors and other mortgage people about work/life balance. Really it was everything I could have hoped and dreamed.
I worked hard, and I built a good life. But, there was danger lurking in the basement that I couldn’t see coming.
Red Flag: The One-Two Punch
I thought I had a great marriage but I didn’t know my wife was not as satisfied as I thought she was. I found out through her abruptly telling me one day: “I’m not happy.” That was earth-shattering to me. I had built my identity around her opinion of me. I didn’t handle that news well. I suddenly realized that I thought I had my whole life put together, but when I found out my wife was kind of disappointed in me and we had a serious marital issue, I was pretty devastated.
Not long after that is when the mortgage market turned. I knew there was a bubble coming. It wasn’t something I dreaded because I thought I was prepared for it. But combined with my marital issues, it was a one-two punch that really sent me into a tailspin as a person.
At this point, I exited the mortgage business. My wife filed for divorce. My daughter contracted an autoimmune disease and nearly died. All of my savings were gone. When the dust settled, I was living in two-bedroom apartment, spending long weekends with kids.
Black Flag: Anger and Denial
Honestly, I was really pissed off. I didn’t make the journey to wholeness very quickly. I was mad at wife, and I was mad at the banking industry that I felt had betrayed me. Like most people that face loss, it was denial and then it was just massive amounts of anger. I felt like nothing was my fault. I blamed my wife for the divorce. I blamed the people at the top for the financial crisis. For several months I didn’t want to look at the real issues in myself. But, every time I told myself that things couldn’t get any worse, they did. This is when I reached a point of no return.
White Flag: Nothing Left to Lose
I remember the exact moment when I finally surrendered. In the town I was in, there was a job training center that I drove by often. I assumed people went there who didn’t know how to fill out a resume or other very rudimentary things like that. I was going to exit the mortgage industry, and I definitely needed a job. I went to San Francisco to look into being a financial planner, but nothing was clicking.
On the white flag day, I drove by the job training center, and I thought “What do I have to lose?” That was the day I surrendered. I decided I was going to get help from anybody who would offer. I was going to humble myself and just ask for help. I didn’t have anything left to lose except my pride, so I decided to give that up, too.
Checkered Flag: Try and Try Again
From that visit to the job training center, I ended up meeting a walnut farmer who gave me a job as a salesperson trying to sell walnut shells. I was the junior salesperson, so as the new guy, I would get the clients no one else wanted to deal with. That’s how I took a call from a local animal shelter about how our pellets worked amazing for cat litter. The business side of me went: “There’s an opportunity here.”
So, I put together a one-page business plan. The owner liked it and put me in charge of the project. That led to me naming the product, and we branded it. It was such a success. Within 18 months, we had distributors across the U.S. and we were going up against Purina and Clorox even though our marketing budget was way lower. It was total underdog stuff, but it worked.
That project was so successful that the owner decided to sell the rights for multimillions to a bigger company. I got no bonus and no severance package. I got nothing from that. The next opportunity was another cat litter project that had an even greater profit increase than the first. I had developed a reputation in the industry, and I didn’t even realize it. There were a lot of people interested in hiring me.
Along the way, I had discovered a secret that not many people know: just being vulnerable and real in business is a great theory, but it’s hard in practice.
The Greatest Lesson: Authenticity Trumps Everything
The first business opportunity with the cat litter is where I redirected all of that angry energy from the first failure with my mortgage company, but I still had a ton of sadness and despair in my life. The surrender happened, but now I was out of my league on this new road. I didn’t have a lot of experience developing retail products, so I was still in that nothing to lose mindset. As a result, I was very real with the people I was selling to. I didn’t put on airs because I just didn’t have the energy to put on a façade.
I was being a human. There’s not enough of that in business. We all know how to pump ourselves up and make ourselves seem ideal, but no one’s perfect. If you just go up and talk about life and how it’s hard and we’re all just trying to make up for whatever deficiency we developed at 12 years old, you’d be surprised at how many people latch onto that.
Where I was in my life, it seemed like I drew people’s pain out of them. Most people in sales know you want to listen more than you talk. That’s a good idea in sales. Buyers would tell me real struggles in both their business and personal life. It was happening so unconsciously that it took me a while to catch on to what was happening, but that natural authenticity from “my nothing to lose and nothing to prove” attitude really resonated with people.
In each episode of How to Lose Money, we’ll be asking our guests to answer a few questions about failure. Here’s what came out of this episode:
- Looking back, why did this failure experience happen to you?
It happened because I built an identity out of the wrong things. I build my identity out of other people’s opinions of me.
- What is the single most important lesson you learned from this?
Authenticity trumps everything.
- Who do you turn to when you need help?
As I mentioned, I turned to God, and then I turned to my wife, and then I turned to a group of three men that we have an unspoken rule that we can share anything with each other. I expose myself to those closest to me.
- How do you strengthen your business now to protect it from failing this way again?
Authenticity. I feel almost like Teflon; I always default to authenticity. That crushing pain of failure is no longer an option.
- What advice would you give to someone who finds themselves in a similar position to what you’ve gone through?
Get as quickly as you can to the white flag moment. It’s inevitable anyway, so have compassion for yourself as you’re moving through the phases. The quicker you surrender, the better off you are.