People will change as a result of the circumstances that surround them. We all do, and we all should, as our priorities change.
If you are the same person now that you were 10 years ago, ask yourself, why? Are you still learning and growing? Do you only care for yourself or do you have others to care for now? It’s OK that people change over the years. If they didn’t, that wouldn’t be normal. I would hope that your beliefs from when you’re 18 years old and not allowed to legally drink change when you’re a 30-year old with kids, a 50-year old starting to think about retirement, or a 75-year old thinking about the future of your grandkids when you’re gone.
Your core values, morals, and ethics should be constant. But don’t demonize a person for changing their mind on specific topics. As they are presented more information, they should be receptive to changing their thoughts based on the new information they’ve received.
Before you make a jealous statement, “they’re so lucky that ____” or “it must be easy because of ____”, truly think to yourself the amount of work that that individual put in to get to where they are. There really are not many “overnight successes.”
And for those who inherited wealth or were put in a better position to start than you? Consider yourself the lucky one. You have gone through trials and tribulations that they have not, and it has forged you into the person you are today.
There will always be someone better off than you just like there will always be others worse off than you, yet you don’t consider yourself privileged. Take a step back and look in the mirror. If you’re reading this on a computer, how “lucky” are you? If you live in the United States, how lucky are you? If you have your eyesight and can hear, how lucky are you? Do you have four limbs? How lucky are you? People tend to downplay the “luck” that played a role in how they got to where they are today, yet they emphasize it in others’ success.
“I’m a self-made person” you say. But, in reality, everyone has had help along the way. Some have had more help than others. But you’ve had more help than plenty of others as well. Remember that.
Finally, stop comparing yourself to others. It doesn’t matter where they are or where they’re going. You can’t control that. But you can influence the direction of your life by the decisions you make each and every day. Work to get 1% better every single day and you’ll be amazed by the results in 1 year, 10 years, and beyond.
“The love of possessions is a disease in them.” – Sitting Bull
We all like nice things.
After all, they’re nice!
For example, when I go to show someone houses, they typically like the more expensive home when comparing it to other, less expensive homes we’ve seen together. And why shouldn’t they? There’s usually a reason why it’s more expensive – it’s bigger, more updated, maybe has more acreage, or is in a better location. I would prefer the more expensive (nicer) home as well.
But what we need to be careful of is to not get too emotional when buying a house (or anything else, for that matter). Eventually, you will turn it into a home. But you do that by making memories there with friends and family, or you do that by putting your personal touches in/around the home. Until then, it is just a house with the potential for you to make memories. The key is to NOT fall in love with possessions (or the thought of owning them) and to not let it take control over your rational thought.
The same can be said for any material item in life. We want the fancier car, the best new gadget, or the popular toy for our kids. But material items only bring us short-term happiness. Over time, our happiness fades away as we become used to that item, but what doesn’t fade away is our lust for that dopamine kick we get when buying/receiving something new. The things we buy end up owning us, because they own our emotions.
So how do we combat this without having to live like a monk? Shouldn’t we still get nice things if we can afford them? The answer is completely up to you. Not everyone wants to live the same lifestyle, nor should everyone live the same lifestyle. But if you want some simple tips, think about these four things before your next purchase…
1. If you can’t pay cash for it, you can’t afford it. With the exception of your house, if you can’t pay for something outright, you probably should hold off on that purchase. Then, when you can afford to pay for it, you’ll either still want it but recognize how many hours you had to work to get it (giving you more awareness of the actual cost of that item) OR you won’t want it anymore. Either option is fine, we just want to be intentional about our decision-making process.
2. Try to envision what buying this item will do for you. Is there a practical/functional purpose for this item that saves you time, energy, or (eventually) money? Will it make your life easier? Will it give you more time or less stress so you can be present with your loved ones? Will you still be happy with this purchase in a year or will you have forgotten all about it? Only purchase it if the benefits outweigh the costs of getting it.
3. If you buy one item, discard one item. It’s easier to do this one purchase at a time instead of ending up with a closet full of clothes you never wear. Living a minimalist lifestyle can be freeing. That way, if you need to pick up and leave really quickly, you can. If your house burns down in a fire or is destroyed by Mother Nature, you have only lost a few items. You’ll end up valuing the few items you have even more – giving you more enjoyment over those items. (It’s like the kid who has every toy under the sun…because he has so many toys, he probably wouldn’t even realize if one went missing. Each toy is devalued due to an oversupply of toys.)
4. Having less things helps to avoid the distractions of a technology-driven society. Would you enjoy watching more sunrises or looking up at the night sky? Does sitting around a campfire having deep conversations with friends interest you? How about having very loose/light/insignificant conversations with friends? (Those matter just as much.) Well, when you have a house full of stuff, you’re less likely to go out and enjoy the beautiful surroundings. You’re less likely to engage in those conversations with friends because you’re distracted. You’re on your phone, you’re watching tv, you’re playing a video game, etc. With less around you, it forces you to pay attention to the ones you’re with and gives you a long-lasting happiness with the relationships you build.
Why I believe in using real estate to gain financial independence.
1. Passive appreciation. Historically, housing prices go up. There have only been a few exceptions to this case (such as when the housing market crashed in ‘08), but with time, the price always comes back.
2. Forced appreciation. Most people look to buy homes for themselves and want something move-in ready. But if you’re capable of renovating/rehabbing a home, you can invest money into a house and get a great return on your investment when you go to either sell it or refinance it (increasing your equity or putting more cash in your pocket).
3. Loan pay down. Where else can you buy a $100,000 property for $20,000 and have someone pay the balance for you? That’s what happens when you get a loan from the bank and the tenants pay off the loan for you. And that’s not even getting into more advanced strategies like the BRRRR method (where you buy a fixer upper, renovate it, rent it out for top dollar, refinance it – pulling out all of the money you had in the deal, and repeat the process). In theory, you could just keep recycling the same $20,000 to build your rental property portfolio.
4. Tax advantages. One of the biggest real estate tax benefits available for investors is in the form of deductions. These tax write-offs, which are generally geared towards rental properties, will include costs associated with mortgage interest, property tax, operating expenses, depreciation, and repairs.
5. Diversify your portfolio. Why keep all of your money invested in the stock market – something which you have no control over? I invest in the stock market, and I think it is important that you do too, but why keep all of your eggs in one basket? Even by investing in different sectors (energy, technology, medical, etc), different-sized funds (small cap, large cap), investing in domestic or foreign companies, etc., you still have everything in stocks. In addition being investing in index funds/mutual funds, I would want to truly diversify my total portfolio by buying properties at a great price and having them provide consistent monthly cash flow.
There’s a common phrase which says, “give the man an inch and he’ll take a mile.” When you think about it, you can probably relate to this happening to you at some point. You tried to be nice, whether it was helping someone out by literally giving them something or maybe you “let them off the hook” when they didn’t do something, and next thing you know, they’re asking/taking more than you agreed to.
Well, don’t be mad at that metaphorical man because, guess what? You are that person too! I was thinking about this in regards to my own workouts, eating habits, and other self-improvement actions. I get up really early (I’m usually up by 3:15 a.m.) so I can get my workout in, read, write this blog, and get some real estate-related work done before anyone else in the house is up and moving. Sometimes my alarm clock goes off and I just want to sleep in. What’s the harm in missing one day of working out, right? That line of thinking (giving myself an inch) can lead to a slippery slope (taking a mile). One missed workout, just like one cheat day, one binge-watching session, one of anything in which you “treat yourself” can (and often does) lead to another. It feels good. It’s easier and more convenient in the short-term. But what’s best for short-term is often in conflict with what’s best for the long-term.
Whenever you feel like you “deserve” something, be on guard. That’s the most dangerous time! Keep putting in the hard work. It will be worth it in the long-run. Otherwise the habits you need most become like the stereotypical New Years resolution…forgotten after 45 days. Don’t get caught in the cycle of working hard for a month, and just when you are starting to make progress, stopping “temporarily” to give yourself a break. You’ll find that stopping feels good and you either never fully commit like you initially were or you never get started again.
We all want to take a mile when we give ourselves an inch. The key is to resist the temptation to take that given inch in the first place.
