Some people argue that Mr. Money Mustache’s life seems like a smooth ride—one without setbacks or mistakes. “He’s had a privileged life, where nothing ever went wrong!” they say. But that’s not true at all. While I generally focus on the positive, let me share with you one of the biggest mistakes I’ve ever made, just to show how even a massive error doesn’t have to destroy your life—and how it can actually lead to better things.
It was 2004. I was a happy software engineer, living in Boulder with my new wife. We had great jobs, great friends, and we were just a couple of years away from financial independence. I was thinking about life after work and wondering, “What’s next?”
While killing time at an airport bookstore, I picked up Robert Kiyosaki’s Rich Dad Poor Dad. Despite the book’s criticisms over the years, at the time it screamed, “Start your own business and live an exciting entrepreneurial life!”
For me, that meant building houses. I had a few friends in the custom house-building business in Boulder County, and after seeing their success, I decided to dive in too.
One friend in particular, let’s call him Dean, stood out. We’d met years earlier at a high-tech company in Boulder and quickly became close. We shared a love for entrepreneurship and even brainstormed many business ideas. So when I decided to start my house-building venture, I invited Dean to be my partner. I thought he’d be a great fit because of his unconventional, “beat-the-system” attitude. He taught me all sorts of tricks—how to argue with credit card companies, how to return things to hardware stores, and how to challenge rules that seemed unnecessary.
Looking back, there were clear warning signs I missed. Dean was the one who also taught me that you could slack off at work and still get paid the same. He’d often take long lunches, leave early, and even add extra vacation days for himself. In retrospect, I realize his attitude towards responsibility was lacking. But at the time, I was blind to these red flags.
When I shared my house-building plan with Dean, he was immediately on board. We made an ambitious start. We secured land in a hot new neighborhood, negotiated with top architects, and found a mentor builder to guide us. We signed on subcontractors and even pre-sold the house before construction was complete.
However, the first cracks began to show. Our financial arrangement was that I would finance the down payment, while Dean would contribute a small amount. When we discussed how to share risks and rewards, he came up with an idea that seemed fair at the time: If the company lost money, we’d share the losses equally. His logic was that he had his 401(k) as a backup plan.
I was relieved to have shared risk, but I now see how naive I was. I trusted Dean completely—after all, we had been through so much together. But as the project continued, I soon realized that I was investing a lot more than he was. I took out a $90,000 line of credit on my home, pouring all my income into the company. Meanwhile, Dean began to pull away. He took weekends off, renovated his own house, and even took trips to the Caribbean while I was busy working. Yet he still drew a salary from the company.
Despite this, our first house sold quickly, and we made a healthy profit. But the tension began to rise over how to split the profits. I suggested compensating myself for the time I’d worked directly on the house, but Dean felt the profits should be split 50/50. He argued that we both contributed in our own ways—he brought “strategic brilliance,” while I worked tirelessly on the house itself.
By the time we started the second project, in 2006, the housing market was about to crash. The second house went up beautifully, but the recession hit just as we were nearing completion. The house sat unsold for months, racking up losses, while we struggled to keep the property afloat.
Eventually, the situation became dire. Dean was falling further behind financially, but I was still putting in my own money to keep things going. When it became clear that we wouldn’t be able to sell, we rented the house out to tenants who promised to buy it eventually. But the market kept sliding, and we ended up deeply in debt.
Through all this, I found myself making all the sacrifices. I borrowed more money, dealt with tenants, and worked tirelessly to manage the project. Meanwhile, Dean continued to be unresponsive to the needs of the business.
In late 2009, we got a lucky break—a wealthy buyer appeared and made a low offer on the house. It wasn’t much, but at this point, I was ready to take whatever I could get. But Dean, who was deeply in debt, refused to approve the sale unless he got a bigger cut. He claimed he couldn’t afford the tax consequences of selling at that price. I was furious—after all, I’d been carrying this burden for years.
In the end, I had to hire a lawyer to get him to sign off on the sale. I also had to pay off the remaining mortgage, which cost me $409,000. Dean still owed me over $100,000, but he had no intention of paying it back.
But here’s the twist: the moment I closed that chapter—finalizing the sale and cutting ties with Dean—I felt a weight lift off my shoulders. All the stress, anger, and frustration melted away. The years of struggle turned into a clear lesson: perseverance, frugality, and a focus on happiness can turn even the darkest situations around.
It took time, but my financial situation gradually improved. Through extra work, frugality, and a lucky break from a neighborhood developer, we slowly healed. Eventually, we came out ahead.
In total, I lost around $200,000 in this business venture. But the life lessons I gained were invaluable. I learned about business, personal character, and resilience. I learned how to be happy even in tough times, and how to appreciate the good things in life once the storm has passed.
Now, I’m focused on forgiveness. While I still feel anger toward Dean, I hope that one day I can forgive him. But for now, I take joy in the life I’ve built. The best revenge, after all, is living well—and that’s what I do every single day.
So, why am I sharing this story? To show that even the worst mistakes can lead to growth. That pain can turn into happiness, and that expensive lessons can still lead to riches. The key is to keep going, one day at a time, and make sure you end up a bit further ahead than you were yesterday. Your problems will be crushed.