I opened the book on the tube on the way home and didn't put it down for two days. I was gripped. It was my first introduction to the concept of passive income, and I became obsessed with it. Darren and I could not stop talking about how we were going to achieve our new goals of creating a passive income source that would allow us to keep building our wealth indefinitely. I could hardly believe that so much financial security and freedom was available to me and I became 100 percent focused on working out how I could make it happen.
During the months that followed, all Darren and I did was research the topic. We attended countless seminars and trawled the Internet looking for new strategies for building passive income. Of course the one that consistently stood out was earning a rental income from a property portfolio, so we concentrated our efforts on learning everything we could about property investment.
Suddenly my three-hour-round-trip commute became valuable learning time for me. I added a costly (at the time) 3G plan to my mobile phone package so that I could use a dongle on my laptop – smartphones still being fairly cost-prohibitive for the average person in those days – and carry on researching online during my commute. I would even walk through the West End to work rather than taking the tube, carrying my laptop and reading as I walked so that I could stay online.
And then the day came when I had a big choice presented to me. It was a crossroads of sort and would determine the direction of the next period of my life.
I had been listening to every motivational tape I could get my hands on. I was listening to Anthony Robbins on repeat, and I'd just discovered Dolf de Roos – the New Zealand property millionaire and best-selling author. I had been listening to an audiobook by de Roos on the day I received a call from a rival animation company that was trying to poach me away from Framestore. They were prepared to offer me a starting salary of £60,000. That same day I heard Dolf de Roos describe a moment in his life when he came to a crossroads. He was offered a job paying $30,000 on the same day that he made a $30,000 profit on a property. He asked himself why he should invest a year's worth of his time to earn $30,000 when he'd just made $30,000 in one day. He turned the job offer down and became a full-time property investor. His experience and decision inspired me; I called the other animation company, turned down the £60,000 job offer, and my fate was sealed. I now knew what I had committed myself to focusing on.
I will never forget that day, that moment, when I was listening to the Dolf de Roos audiobook and made that life-changing decision. I'd been listening to it in a café during a lunch break and on the way back to the office I ran into Darren. I told him that I'd come to a major decision; that I'd decided I was going to quit my job. He didn't believe me, so to prove it, as soon as I was back at my desk, I wrote an e-mail and sent it to the whole office. I said it was my last day at Framestore and anyone who felt like going for drinks after work should join me at the local pub so we could say our good-byes. My boss was at my desk in minutes, asking if it was a joke. I told him I was serious.
Because of the confidential nature of the projects we were working on at the time, Framestore had to give me a month's garden leave (which means you remain on the company payroll through your official notice period but are barred from coming into the office or working for another employer; you effectively have to sit at home!). Sending that e-mail did feel a little mad, but I knew it would force me into action, that there would be no going back, that I would have to go through with my plan. It was amazing how much freedom I felt immediately; it was like a weight lifting off me. I knew I'd done the right thing and I never looked back.
I remember waking up the day after I quit with a feeling of total euphoria. Suddenly I had what I wanted: I had my time back. The whole day stretched out in front of me; I could spend all that time continuing my research. I also knew that if I played my cards right, the rest of my life could be like this: being able to choose how I spent my time each day. No one owned my time anymore. It felt fantastic. I dedicated every waking moment to going to seminars and doing research on passive income generation. Of course I kept the fact I'd quit my job quiet from my friends and family for a while!
I knew I had to get started in property investment as soon as possible. I had a short window in which I still had a salary that I could use to secure a mortgage. In 2005 it was definitely easier to get a mortgage than it is today, but I still needed to prove my earnings; I had to get a mortgage while I was still on garden leave from Framestore. I started researching mortgage brokers. And that's how I came across Ying Tan.
Ying lived near me in Guildford so I went to see him, to speak to him about getting into the property business. He offered to mentor me. When I asked him how much he charged, he said £10,000. I nearly fell off my chair. I asked him how he could justify that price. He told me that what I would learn in two days would set me up for life; that he would show me a revolutionary way of buying property that could completely change my life. I instinctively felt I had to do it. But how was I going to get that much money? The only thing I had that was worth that much was my car. I had a Honda S2000 that I knew I could get around £10,000 for. The question was, should I use that £10,000 as a deposit for one property or pay Ying Tan to mentor me? I was young; I guess I was ready to live dangerously!
The few friends I mentioned my plan to thought I was crazy. They were convinced it was some scam and that I was about to be ripped off. But I kept talking to Ying and he kept reassuring me. In the end he offered me a deal. He said I could pay him half of the money up front and the other half when my first property deal went through. I was still petrified and I nearly pulled out several times. It seemed like such a huge sum of money. However, at one point I divided it by 365 days and realized it was around £27 a day, the exact sum I used to have as disposable income when I worked at Framestore. That made it more manageable to think about; it made it relatively acceptable, as if all I was doing was making the decision to go without a year's worth of expensive lunches! Doing that calculation somehow helped me to make my final decision to move forward.
I had never been so scared in my life. Handing over all that money was still incredibly painful. But the pain of the thought of having my newfound freedom taken away was greater. I never wanted to go back to being an employee. I wanted to be in control of how I spent my time for the rest of my life. I'd tasted that freedom and wasn't prepared to give it up again.
Ying was as good as his word. Through a loophole in property financing at the time, he'd figured out that if you bought a property at a significant discount and then immediately refinanced it, you could make an immediate cash sum. The banks subsequently closed this particular loophole, specifying that you have to own a property for six months before refinancing, but for a while there was a decent profit to be made by doing the type of deals Ying had taken advantage of.
My first property deal made me £9,000. Ying helped me find a property that was valued at £250,000. I managed to negotiate a discount with the owner/developer and agreed to buy it for £200,000, which I financed through a bridging loan. As soon as the property was mine, I refinanced it, taking out a mortgage of £212,500 (85 percent). This was a relatively quick and simple process. Before the global financial crisis hit, lenders were falling over themselves to offer mortgages to anyone, regardless of their means to pay it back. I paid off the £200,000 bridging loan and had £12,500 left over. After paying off my costs and a small amount of interest on the short-term bridging loan, I had around £9,000 left.
I appreciated everything Ying taught me. He was an expert at finding loopholes to make money from and I carried on using him to broker mortgages on my future properties. But I needed more; I wanted to explore every source of experience and information out there. I needed other skills if I was going to be as successful as I aimed to be. I needed expert marketing and negotiating skills. I wanted to soak up as much education as I could find. I discovered a property networking group that was offering a course costing £3,500. Even though my investment with Ying had paid off, I was apprehensive about risking a big chunk of money again, so I went to talk to my Uncle Chi.
Like my parents, and so many other Chinese people of his generation, my Uncle Chi had built up a successful Chinese takeaway