7 things one entrepreneur learned from dropping out of college to start a multimillion-dollar hedge fund

Courtesy of James Paine

James Paine knew he wanted to be an entrepreneur since age five.

When James Paine was 20 years old, he made the bold decision to drop out of college.

"All of my friends and family thought I had lost my mind," he tells Business Insider. "I told them I wanted to be an entrepreneur. I tried college but I just kept thinking to myself, 'I need to be out there, starting businesses and getting hands-on experience.' I decided sitting in a classroom wasn't for me, and I would try my hand at entrepreneurship."

Paine, a Santa Barbara, California, native, has dreamed of becoming an entrepreneur since he was just five years old.

"It was around that time that I successfully started, and ran, a business renting out my pets to the neighbors," he says. "After a successful exit, I was on to my next venture: selling candy to kids at surf camp. This is what my life was made of as a kid - not LEGOs and G.I. figurines. Business was my lifeblood, my constant preoccupation. I was constantly coming up with ideas and projects that I could use to make money."

Of course at that age, income was secondary. "I found coming up with an idea out of thin air, and using it to create solutions, to be far more exciting than anything I had ever experienced," he says.

But as a teenager, Paine was convinced that in order to be successful, he'd need to earn a college degree. "So I worked hard in school and made my way into college."

Something was missing, though. So in 2007, Paine dropped out of California Polytechnic State University and decided to get into real estate.

"I was very interested in it and liked how entrepreneurial the business was," he says. "I realized early on that it involved a lot of hard work and problem solving skills. So I got my real estate license, and then went door-to-door offering my services of buying and selling houses."

Paine spent three years knocking on doors every day "until my knuckles bled" and by age 21, he had sold over $15 million in real estate on his own.

"With all the information I was getting, and all that I was learning, I realized I knew more about real estate than a lot of people," he recalls. "This was the time to make a big move."

So he did.

Courtesy of James Paine

James Paine, 28, learned a few important lessons along the way.

Paine launched West Realty Advisors in 2009 at the age of 23. "The goal was to use my knowledge of the real estate industry to provide returns to my investors," he explains. "It was my first hedge fund."

The first few years were challenging, he says. But today his company, which invests in residential redevelopment projects, is on the track to exceed $30 million in revenue. "We have bought, renovated and sold over 1,000 homes in 26 states and have employed hundreds of people," Paine says.

"I don't recommend every entrepreneur out there to drop out of college. There is nothing wrong with college and a lot of good can come from the experience, as well as the knowledge that you get there. For me, though, the decision to quit has paid off."

Here are seven key things Paine has learned from dropping out of college to start a hedge fund:

1. It's not like what you see on TV.

"Television often portrays entrepreneurs as rich, carefree, and wild," Paine says. "This is not an accurate description. Reality is much harder to swallow."

For most entrepreneurs, struggle is constant, he explains. "They live on couches and eat Ramen noodles every day before they get successful. Sure, for those who persevere and are smart enough, success does come, but there is no instant formula for it, and the hard work simply cannot be discounted."

2. It's not all about money.

Of course making millions is a nice reward, but if you start a business with the sole purpose of making money, your chances of success will be limited, he says.

3. You have to be ready to fight.

"Every day will be a new challenge … a new obstacle," says Paine. "You have to do whatever it takes to overcome it."

Courtesy of James Paine

Paine surfing in Playa Colorado, Nicaragua.

When you are in the middle of a struggling business, it's hard to take time for personal development and your health. "Accept this truth and you will be well on your way," he suggests. "This is one of the best things you can do to help overcome obstacles. It's the ultimate cheat."

5. Plan on plans not working.

"Yes, business plans are helpful," he says, "but I don't know a single entrepreneur who has written a business plan and had it turn out exactly as they expected." Whenever you make a plan, plan for it to change.

6. Learn everything.

"I read over 50 books per year just to maintain an edge," he says. "If I read for ten hours and learn one new thing that can make me more money, it is always worth the time."

Pain recommends speaking with and learning from as many people as you possibly can. "Committing yourself to learning is the best way to guarantee success," he adds. "As my mentor taught me, focus on 'ABL' - Always Be Learning. Commit yourself to this and success will soon follow."

7. Relationships are everything.

Focus on building long-term and mutually beneficial relationships, he advises. "While you may not need that person today, you would be very surprised how often or how badly you may need them a few years later. Making yourself the person who can connect two people makes you highly valuable."

Of course, these aren't the only things Paine has learned; "this list could go on and on for pages," he says. "These are simply the top seven things that I wish I had known before I started on this journey."