If $|x|>1$, let $y=\frac{1}{x}$. Then, $|y|<1$, and your series is
$y+y^2+y^3+...$
This is a geometric series, for which the limit is known to be $\frac{y}{1-y}$, if $|y|<1$, and it diverges otherwise. Now, why is that?
Factorize $(1-y^{n+1})=(1-y)(1+y+y^2+...+y^n) \Rightarrow (1+y+y^2+...+y^n)=\frac{1-y^{n+1}}{1-y}$.
If $|y|<1$, then $y^{n+1} \to 0$, and the sum is $(1+y+y^2+...+y^n)=\frac{1}{1-y}$. Subtracting $1$ on both sides gives the result. If $y=-1$, then the sum constantly oscilates between $+1$ and $-1$ (assuming these are real numbers), and if $y<-1$ it oscilates even more, so the series can't converge. If $y\geq 1$, then the series diverges because you're adding increasingly bigger numbers.
Now, your method is half right. It does give the sum of the series, provided there is one. The problem is that you are assuming there is such a number right of the bat, which could be incorrect: try plugging $a=+\infty$ to see that you method arrives at an indeterminate expression $\infty - \infty$
EDIT: Oh, and I forgot, but $\frac{y}{1-y} = \frac{\frac{1}{x}}{1-\frac{1}{x}}=\frac{1}{x-1}$, which is the sought result.