Ramit Sethi

From CaseyPedia

Ramit S. Sethi (born June 30, 1982) is a consultant, entrepreneur, and blogger, best known for founding the internet company PBwiki and for his blog I Will Teach You To Be Rich.^[1] A Stanford graduate, Ramit is a model of entrepreneurial success that Casey Serin can only aspire to.

In November 2006 Ramit published a blog article, Meet the 24-year old with $2.2 million in debt, in which he discussed Serin.^[2]. He revealed that he and Serin were high-school contemporaries:

I know Casey Serin. We went to high school together. In fact, we ran the computer club together.

He went on to publish an email he had recently received "out of the blue" from Casey:

This January I quit my job to do real estate investing full-time. Together with partners in the area we buy and sell houses for fast gains and we also hold property for appreciation. In the first part of the year I personally bought 7 houses in 4 different states. It’s not all easy - there is definitely a learning curve. It helps to have experienced associates to help me along.

Now what?? We have a unique opportunity to continue to expand the real estate business. Because of the market reversal in California there is going to be many people in trouble with their loans. People have been buying more home then they can afford or refinancing like crazy. Foreclosures are already on the rise and they are going to sky-rocket in the next several years.

There is an opportunity to 1) help people out of trouble and 2) make some money. Service and integrity comes first though. I know what its like to be behind payments and face foreclosure. I refuse to be a “shark” investor. It must be win-win, or no deal.

Want to participate? Do you have money that’s sitting in an account somewhere earning an embarrassing 1-3%? Are you comfortable with your retirment money sitting in a volatile stock-market? Maybe you’re not investing at all. Are you comfortable trusting social security to take care of your retirement?

Invest your money with us and get 24% fixed return secured by real estate. We use your money to buy and fix houses improving the area and helping sellers in distress. Benefits to becoming our private lender:

• we pay fixed 24% interest on your money - reliable returns
• compounded monthly - your interest is making interest and it grows exponentially
• secured by real estate - just like a bank, YOU get a mortgage against our properties to protect your investment
• start with as little as 10,000
• may use your 401K or IRA account - get tax advantages
• your money doubles every 3 years
• 10,000 grows into 100,000 in 10 years

Worst case scenario… If we can’t pay you back, you get a good property. We only put your money into a house that has at least twice the equity as the amount you’re investing. We only invest into nice properties in good neighborhoods. If something were to happen to our business you can normally just sell the house at a discount and get your money out. What stock or mutual fund is going to give you THAT kind of security?

Limited opportunity… We can only take a certain number of private lenders. Get back to me soon so I can explain in more detail. Also please forward this to anybody else who may want to get a high return on their money. We pay referral fees!

Describing it as "the shadiest-sounding financial 'opportunity' I've ever heard of," Ramit politely passed on the offer, only to receive a new email a week later in which Serin confessed to his dire financial situation:

Those who received my email about Private Money - please forgive me for giving you a false impression. Getting high returns lending on real estate deals is a good thing - you should do it. However, I didn’t fully explain MY situation. I made it seem like I had everything together. Well, as you can see, I’m not a very safe bet right now.

Ramit reacted as one would typically expect:

Now this really made me mad. Casey had tried to sucker people into a scam real-estate deal less than a week before he admitted he was going through foreclosure. I was fortunate enough to recognize his pitch as bullshit, but what if someone had gotten conned into it? Financial scams on unsuspecting people make me furious.

Serin then posted an apology in a comment on Ramit's blog, and expounded further on IAFF, explaining his underhanded behavior as standard practice advised by his real estate gurus:

I was following the directions given to us at one of the seminars on how to find private lenders for your real estate deals. My goal was to borrow small amounts of money, say $5-10K, and use it to catchup my payment, sell my properties and pay the private lender back a generous 24% annualized return. I was going to use the equity in the properties as collateral for the loans. Additionally I wanted to use the money to do more deals to get my real estate business back in shape. What I did wrong was, fail to mention that my real estate business was actually in trouble and I’m facing foreclosure on all these properties.^[3]

Ramit remained positive overall about Serin, whom he described as "a very nice and sincere guy" --

Will Casey get out of debt without having to declare bankruptcy? I don’t know. I honestly don’t know what to make of this situation. But I do think a few things: First, Casey really messed up by trying to con people into joining his stupid real-estate “opportunity.” That was a scam, pure and simple, and every single one of you needs to beware of that in the future–no matter if your age-old high-school friend pitches you, or your best friend. A scam is a scam. Second, Casey did at least acknowledge his wrongdoing a few days later and invited people to his blog to view his progress. He’s been remarkably positive despite the horrendously negative comments he’s getting. Even when I met him, he knew exactly the situation he was in, and he was still positive about the future. I think that’s pretty impressive.

Ramit later invited Serin to contribute a chapter to his 2007 Guide To Kicking Ass, a 30-page PDF info product that he sells online for $4.95.^[4][5] Serin's chapter, Handling Failure: Dealing with a $2.2 Million Mistake at Age 24, took as a theme "failing forward", inspired by John Maxwell's book Failing Forward. Serin responded angrily to the Haterz™ suggestions that he was plagiarizing Maxwell's book:

There is no plagerism plagiarism in my essay. I was refreshing my memory on the Failing Forward concept so I was re-reading parts of the book before writing the article. So if I happen to write a sentence that sounds very similar that what’s in the book that’s why.^[6]

In May 2007, Serin mentioned some recent advice he had received from Ramit:

Even my friend Ramit of I will Teach You To Be Rich called me the other day and told me to stop messing around, declare BK, get a solid job that puts money in my pocket today and stop chasing tomorrow’s opportunities. He thinks I should delete the thousand emails in my inbox because most of them are probably scams. I thanked him for being direct and giving me some good advice.^[7]

... and promptly continued ignoring it.

[edit] References

1. ↑ I Will Teach You To Be Rich
2. ↑ Meet the 24-year old with $2.2 million in debt, I Will Teach You To Be Rich, November 1st 2006
3. ↑ Revisiting Old Mistakes, IAFF Post, November 4th 2006
4. ↑ Ramit's 2007 Guide To Kicking Ass, I Will Teach You To Be Rich, December 5th 2006
5. ↑ Handling Failure: Dealing with a $2.2 Million Mistake at Age 24, IAFF, December 5th 2006
6. ↑ Handling Failure: Dealing with a $2.2 Million Mistake at Age 24, IAFF, comment on December 6th, 2006 at 7:15 am
7. ↑ Galina Serin: Enough is Enough!, IAFF, May 7th 2007