7 Bits of Real Estate Investing Advice I Would Tell My Younger Self
Have you ever heard of or perhaps spoken the words “If I knew then what I know now I would have done things differently?” I believe most of us have... I know I certainly have. I often wished I had the ability to do some things over with the wisdom I have acquired over the years.
Here are 7 bits of real estate investing advice I would love to tell my younger self...
1. Begin with the end in mind:
There is a lesson I learned from my father as a young boy. He was teaching my older sister to drive and she was weaving all over the road. He said “stop looking at the road directly in front of you. You are looking at the curb on your right side and the white center line on your left and navigating between the two. You are so busy trying to center the car between the two that you do not even realize you are weaving all over the place. Look up to where you are going and drive toward it.”
Instantly the car straightened out and she began driving straight and swiftly toward her targeted destination. I later in life had an Ah ha moment! I could apply this to my real estate investing career as well. Living for the moment was exciting, but I was weaving all over the road as my sister was when she was learning to drive. Once I had this Ah ha moment I too was able to get focused on where I was going.
2. Decide what you want out of life:
Think about things that you want for your family and how do you want to spend your aging years. Then back into it. Close your eyes and Dream Big. Establishing a road map to obtaining that lifestyle will be easy if you know where you’re heading.
As a young adult I was more focused on paying my bills, buying new cars and the latest gadgets. I was way too busy living in the now. This is a great place to be as it is imperative to enjoy life, but goal setting is also imperative and this is where I fell short.
3. Align your work with your interests:
There is a saying that, "if you enjoy what you are doing you never have to work a day in your life." As a child who was always helping my dad fix up his properties, I was fascinated by houses. When I was a teenager I would sit at open houses for the local real estate broker (simpler rules and times back then, I basically was babysitting the house), but I loved the architecture and seeing all the different floor plans.
I just simply loved viewing property and wanted to be a Realtor someday. Yet it took me 18 years before aligning myself in a career that was congruent with my passion. I invested in real estate, but did not actually work in the real estate industry.
4. Start planning early:
Work smart, not hard to get ahead. I would love to share with my younger self a favorite quote I heard when I was about 50... “Spend the next 5 years doing what most people will not do, so you can spend the rest of your life doing what most people are unable to do.”
Growing up in the Midwest I had the old fashioned Midwestern work ethic where I would work at least 12, and as much as 18 hour days. I was making a living, but not making a life. There was just so much emphasis on hard work there in the Midwest.
As I moved into bigger cities I was introduced to something entirely different, the concept of working smart instead of working hard. This is when life started changing for me. Smart work is leveraging your intellect instead of simply swapping hours for dollars.
Working smart is creating a plan of what you want out of life, plan your lifestyle and the money it will take to live that lifestyle, then develop a strategy to get it. For me it meant going from simple goals like buying a property with a $200 monthly cash flow to strategizing the big picture of creating a residual positive cash flow of at least $30,000 per month. This simple change created the same type of change my sister experienced when she stopped looking directly in front of her and started to look at where she was going. These end goals will be the driving force to propel your investments to the next level with purposeful activity.
5. Pursue your passions:
Do what excites you first and foremost. Your creative juices will flow more freely when you are coming from a spirit of passion.
I grew up and got a job working hard and doing what society wanted from me. It was not until I started my own business doing home renovations, something I was passionate about that opportunities opened up for me. I bought my first boat which was another passion, as an outdoorsman who loves the water, boating allowed me to enjoy the great outdoors. Within minutes of starting up the boat my stresses vanished away.
Living within a life of passions, I was opened to see the vast opportunities coming my way. This is the time my investments starting growing exponentially as they had purpose and passion behind them. It is said that the average person has over 130 opportunities pass by them each and every day and most go unrecognized. Great things come to you when you are Grateful for what you do and what you have.
6. Focus on Simplification and Net Worth:
Here is another lesson I wish I would have learned earlier on in life. Simplification is the most overlooked opportunity for creating wealth. Reducing your monthly obligations gives you more investment capital which can be used to generate more income. Spend at least 5 years focusing on wealth creation instead of wasting money on the latest gadgets and things.
Focus on your net worth not your working income. Wow, I truly wish I had this advice early on. This took me better than 40 years to realize. This is part of thinking big and for the long term. Today’s income is simply consumable.
As you focus on your net worth you will pause to consider whether the money you are about to lay out is buying you an asset or a liability.
7. Save, invest and duplicate:
Savings is paramount for creating money for investing. This investing money will now create more passive income. You can spend the earnings of the investments but the initial investment should always be re-invested to keep earning more passive income.
Now when you need a car, instead of dropping 20 or 30 grand on a car you can spend 20 to 30 grand for a down payment on an income producing property and use that cash flow to pay for a car. It is like getting a free house. An asset that pays for your car and grows in value every year.
My largest Ah ha moment
I trust that you too you have found yourself thinking,” if I knew then what I know now” you would have done things differently. Interestingly enough (for me anyhow) the lessons are much deeper than how to invest or what to invest in. It comes from preparing the mindset. I find it is a proper mindset that opens your doors to the opportunities.