A good friend of mine is a second generation American whose father never learned english very well, never had a white-collar job, and never made more than $15 dollars an hour. He worked in a factory and as a lawn maintenance man until his body was no longer able to handle the demands of the job. He did not acquire a college education, yet raised several financially successful children as a first generation American. This man now owns several houses completely paid off and make enough from the rental income to cover all his living expenses. One if his children is a self-made multi-millionaire, another is one the way.
How did he do it? Did he win the lottery? Buy stock in apple like Forrest Gump? Strike it rich mining for gold on a beach with one of those tv commercial metal detectors?
Nope. He did it the intelligent way. He saved money, lived below his means, and used the extra money to buy rental property.
You see, real estate is not a get rich quick scheme. The few who get lucky enough to get rich quickly usually lose their capital just as fast. No, real estate is a waiting man’s game. It is leveraging not only your asset to increase returns, but time. Real estate can be understood by everyone from the least educated person to the M.I.T business school graduate. At it’s core, it is using other people’s money to buy a property and then other people’s money to pay for it. It is a numbers game, and numbers do not care about your race, age, religion, background, or skill set. THIS is why my friend’s father was able to accumulate what he did without any of the advantages of the “wealthy” or “privileged”. He did everything right, and he was rewarded for it in the end.
Now let me ask you, if he can do it, what excuse do any of us have? I was born in this country. I speak the language. I received a great education and I have a network of people to support me in both business endeavours and personal ones. If my friend’s father was able to accomplish what he did with so much working against him, do I have any excuse not to do better?
This is the attitude we all need to have. Most of us are capable of accomplishing so much more than we believe or understand. Real estate is so amazing to me because it allows anyone, from the richest man to the poorest of the poor to achieve his goals if he is patient, wise, persistent, and frugal. These are all qualities any of us can possess should we choose to.
My college years were pretty typical of most Americans. I worked in restaurants waiting tables and drove to campus for class. I stayed at home and lived with my parents to save money, and I attended the least expensive colleges in my area. I majored in psychology and minored in criminal justice. By saving money living at home, staying late to pick up extra tables, and working 4-5 nights a week in addition to my schooling, I was able to pay for my car in cash and save $90,000 by the time I graduated. This is including the fact I was forced to take 8 months off work to recover from reconstructive ankle surgery.
Think this is unrealistic? Think again. I didn’t do anything anybody else can’t do. While $90,000 may seem like a lot as one lump sum, spread out over 4 years its less than $25,000 a year. Don’t look now, but I bet if you add up what the average college kid pays for entertainment, alcohol, coffee, clothes, vacations, and eating out, it will come much closer to that $25,000 than you think. This is where the power of saving is, it’s in time. Small amounts of money saved consistently over time can really add up. With this $90,000 I was able to buy my first two rental properties. These properties have now almost doubled in value and provide me over $1,000 a month in rental income. Take that $1,000 a month and multiply it over 20 years. That’s $240,000. Nearly a quarter million dollars over 20 years that I didn’t even have to work to earn. Now imagine a few more houses doing the same thing. Now include the fact the mortgages will be nearly paid off, and the rent will have no doubt increased over that time so my $240,000 will in reality be much, much higher. The rent isn’t dependent on my education, race, job, or experience. See what I’m getting at?
Anyone, whether blue collar, white collar, or no collar, can build wealth through real estate.
If you’re interested in accomplishing what my friend’s father did, take some steps today to start learning more about real estate. Read more articles on this blog, check out some online resources like www.biggerpockets.com, look up good books on managing properties, buying properties below market value, etc. Educate yourself and feel that fire grow inside. Believe that this will work for anyone, and start acting on that belief. If the lawn care man can do it, so can you. Here are a few things to think about to get you started.
Where can you make cuts in your spending to save extra money every month? Have you budgeted your money every month to know where it’s going? Most people are amazed when they realize how much they are spending on non-essential things.
Who can you talk to that is doing something you want to be doing? Mentors are an invaluable tool to have in your corner anytime you’re starting something new. Real estate investing is no different. If you want to find a good mentor (or succeed in anything new for that matter), find a way to add value to their lives or what they are doing. Many people are more than happy to share what they’ve learned if they don’t feel they are being taken advantage of. Bring value to their life/business and enjoy the wisdom you receive in return.
What books can you read on the topic you’re interested in? With the advent of the internet and the abundance of books reviews available, you should never read a bad book again. See what other people have gained value from and read the same.
What can you cut out of your life that is preventing you or will prevent you from succeeding? This is an often overlooked question but it’s still crucial. A huge reason we don’t succeed at something isn’t always that we didn’t try hard enough, it’s that factors in our life sabotaged our plans and negated our efforts. It makes no sense to start something up if you don’t have the ability to see it through, and there is no gain in putting in hard work if bad habits will keep you from succeeding. Take a good hard look at your life and evaluate what needs to go. If you’re unsure, ask people who know you well and will give you honest feedback regarding what changes you need to make to succeed. Half the fun of success is the process itself and the growth and changes you’ll see in yourself. Don’t take this for granted!
There you have it. Plenty of information to get you started on building your empire from humble beginnings. The most epic journey still begins with one step, and continuing to take those forward steps is what will bring the change in your life you want. Real estate and the wealth it brings doesn’t care where you came from, where you are, or how you got there. So neither should you!