5 Things I Want to Tell My Younger/older Self about Real Estate Investing
Have you noticed that within many conversations you hear the expression; “If I knew then what I know now.” Even the infamous Cher wrote a song about it “If I could turn back time” It reminds me of myself as a kid, I always heard my dad talk about real estate investing, he too was always saying, “If I knew then what I know now, I would have done things much differently.
Whenever I heard this expression I always become a very tentative listener as I knew the next piece of information was probably a great education moment that I could learn now and grow up to be all the wiser.”
So what is it I know now that will guide me as I continue to age? “I know my philosophical side is showing” but in the spirit continuous growth and goal setting we always want to look forward with purpose.
So this got me thinking...If I could turn back time, knowing what I know now about all the different attributes of real estate investing and all the dos and don’ts, how much easier and more productive and profitable I could be now. On that same train of thought what inspirations do I now have that will guide me forward as I age? As the ole saying goes, “the best way to predict the future is to create it”
So what would I do differently?
5 things I would tell my younger self about real estate investing
1. Young Larry, align your work with your interest
I do not recall ever hearing this as a child, Perhaps I did and simply tuned it out, but I would love to tell young Larry to find your strengths and weaknesses. Perhaps complete one of the interest assessment test and create an understanding of yourself. 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 in open houses for the local real estate broker (simpler rules and times then as I basically was babysitting the house). I loved the architecture and seeing all the different floor plans. I just loved viewing property and thought maybe someday I should be a Real estate broker.
Yet it took me 18 years of working in the workforce before aligning myself in a career that was congruent with my passion. I invested in real estate but did not work in the real estate industry. I now know that if you love what you do you will never have to work another day in your life. At least it will not feel like work.
· Older Larry: Continue your passions, Give back; You have had much success and many failures, share your knowledge, as Pioneers in the area of investing share what is most effective. You have learned that the best lessons in life are those tasks you failed at. Failing forward is the truest path forward. “Yesterday’s failures create to tomorrows successes.
2. Young Larry, begin with the end in mind; think long-term
What are things you want for your family, and how do you want to spend your later years? Then lean back, close your eyes and dream big. Establishing a road map to obtain that lifestyle will be easy if you know where you’re heading.
What career you choose and how you invest in your future will have purpose and meaning. For me as a young adult, it was more about paying my bills and being able to have new cars and the latest gadgets. Living for the moment was exciting, but that excitement fades as years go by and future lifestyles start to take center stage. Keep the future In mind!
· Older Larry: You have lived a great life, once you started thinking long term, making adjustments along the way to create a better life, a better life is exactly what you got. Now you want to serve others as your way of live a life of gratitude for these great life’s experiences.
3. Young Larry, start planning early
“Work smart, not hard, to get ahead”. Wow, I wish I had heard this as a child. “Spend the next five years doing what most people will not do, so you can spend the rest of your life doing what most people cannot do.” Growing up in the Midwest, the old-fashioned Midwestern work ethic had me toiling 12-, 14- and even 18-hour days. I was making a living but not making a life. In the rural Midwest, there is so much emphasis on hard work. As I moved into bigger cities I was introduced to 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 (yes, a written plan) of what you want from life, planning your lifestyle and the money it will take to live that lifestyle, then developing 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. These end goals will be the driving force to propel your investments to the next level with purposeful activity.
· Older Larry: never stop planning tomorrow; your success has always come from looking forward. You can now take more time for yourself and your family. You paid your dues now take time to enjoy life. Remember what got you here. Self-improvement has been at the core of your being keep, living this and sharing your experiences with your tribe.
4. Young Larry, pursue your passions
“Do what excites you and trust that the rewards will follow, 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 stress vanished. Living a life of passion and purpose is when my investments starting growing exponentially. It is said that the average person has more than 130 opportunities pass by him or her each and every day and most go unrecognized. So live with passion, and the world will open up for you. Always keep an open mind and never shut out possibilities.
· Older Larry: Remember your life long passions, boating, travel, enjoying the great outdoors, investing and serving others “We live a life to thrive not merely survive” never let go of this even in your older years, live this and share it, travel the world and inspire others to do the same.
5. Young Larry, focus on simplification and net worth
“Simplification is the most overlooked opportunity for creating wealth.” This is a term I never really heard or at least took time to embrace until I got older. I would want to instill in my younger self the concept of simplifications. Reducing your monthly obligations gives you more investment capital, which can be used to generate more income. Spend at least five years focusing on wealth creation instead of wasting money on the latest gadgets and things. Focus on your net worth, not your working income.
I truly wish I had gotten this advice early on. This took me better than 40 years to realize. This is part of thinking big and for the long term. This point was driven home to me by an Australian client, who shared with me that “Americans are taught from birth to spend and go into debt, while Australians are taught from birth to save and invest.” This is a conversation I will remember forever as it makes such great sense.
Today’s income is simply consumable. When you focus on your net worth, you will think twice about whether the money you are about to lay out is buying you an asset or a liability. Savings is paramount to create 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.
· Older Larry: Well by now your life should be very simply and your net worth should be phenomenal. Repeat and duplicate and show others how to do the same.
My biggest “ah-ha” moment
I trust you too 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 the proper mindset that opens the doors to the opportunities.
My admission: I just learned a lot about myself. I set out to write this post on real estate investing to inspire people both new and seasoned in the investment world. My single biggest Ahha was the stories I wanted to tell my older self on each of these same 5 topics that I told my younger self, all had very similar responses. Give back, share help and inspire others. At the end of the day (or final years of your life anyway) you know you made it when serving others becomes your primary focus.