You don’t have to know it all to get started, you just need to know what the next step is. If you wait until you have all of the information or until you know exactly how things will play out, you will be waiting forever. There is risk and uncertainty in everything we do in life. There is even risk and not taking action.
Determine where you are currently and where you think you want to be in the future. Once you have an end result in mind, then reverse engineer the next steps to get there. You don’t have to have everything planned out to a “T” to get started. Have a general guideline or a framework on how do you think it should look and what you need to do to get started. I guarantee that how do you think it looks and how it will eventually end up working is going to be at least a little different. But if you don’t do anything, if you wait for all the answers to come to you, if you wait for certainty, you’re going to miss your opportunity.
The popular thing to say is to stop comparing yourself to others. I agree with that to a degree. It should not be your primary focus. You need to measure your performance by asking yourself if you did the best you could. After all, if I compared my three-point shooting to Steph Curry’s, I would feel pretty bad about myself. But if I put in the dedicated practice everyday to get better, that’s all I could ask for.
But at a certain point, if you really want to become better, you have to measure your performance against others. Competition brings out the best in you. Otherwise it’s too easy to get complacent. It’s almost like when you’re working out. Your body can go a lot further than you let it, if only you allowed yourself to really open up/push yourself. But if you’re only working out by yourself, it’s easy to take your foot off the gas pedal. Plus, if you’re never around people who are better than you at something, how will you know what is possible? If they can do something, so can you. You just have to work for it.
So, yes…you shouldn’t primarily be focusing on comparing yourself or your situation to others. BUT that doesn’t mean you shouldn’t look around to find motivation to better yourself. If you’re the best at “X” then you need to find others who can push you to new limits.
“The best decisions are the ones that eliminate many future decisions.”
Making choices can be draining. What you you want to eat, to wear, to do? When do you want to work out, to mow the lawn, to go to the park?
Where do you want to…
How do you want to…
The list is seemingly never-ending!
Instead of experiencing decision fatigue, make certain decisions once and let that be the end of it. Then you don’t have to waste time and energy deciding something everyday. I like doing this by having “rules” that I follow. It’s easier to say, I’m the kind of person who does ____ or who doesn’t do ____.”
Here are some examples:
• I work out everyday. Even when I don’t feel like it, I at least have to get on the bike for 30 minutes.
• I read and write something everyday.
• I brush my teeth every morning after breakfast and every night before bed. After I brush my teeth at night, I do not eat anything or drink anything other than water.
• I wear a seatbelt every time I’m in the car.
• I do not eat fast food.
• I do not “pay” for something on a credit card if I can’t afford it in cash (with the exception of a house).
• I do not participate in gossip. (This is the most challenging one.)
• When choosing what movie to watch on a streaming service, I only get five minutes to pick, (otherwise I’ll be scrolling forever).
These are just a few examples of rules I live by. Once you’ve established your own set of rules, you’ve made that decision once and you never have to make it again. Let it become ingrained in you. Follow the rules that you set and don’t break them. It will make everyday a little more effortless as you don’t have to make a decision on whether or not you should do something that you frequently encounter.
“To read without reflecting is like eating without digesting.” – Edmund Burke
I used to do exactly this. In my conquest for self-improvement, I tried to consume as much information as quickly as possible. Podcasts and audiobooks on 1.5x speed, trying to read as many physical books as I could within a given time period, watching YouTube videos relevant to my field of study, etc.
But what I unintentionally missed was that, if I didn’t slow down and contemplate on what I just read, I didn’t dig deep enough to truly understand the whole idea. I understood basic concepts and surface level ideas, but couldn’t clearly articulate them. If you want to master something, you have to know it inside and out. And if you’re only going for volume/high quantity, you’re missing out on the true knowledge (quality). Dig deeper to understand more. Question what you read, don’t take it at face value. Play devil’s advocate. What would someone who supports that idea say? What would someone who disagrees with that idea say? What evidence is there to verify this idea and was that evidence cherry-picked or is it an accurate reflection of the truth?
The point here is to not rush to check another book off of your reading list. Slow down. If you’re reading to learn, then do it right the first time. Take your time, read, reflect, question, answer, discuss, and continue reading.
There are four sectors of the Cashflow Quadrant – E (employee), S (self-employed), B (business-owner), I (investor)
The Cashflow Quadrant describes four ways of making money – as an employee, a self-employed individual, a business-owner, or an investor. You are not limited to earning income in only one category at a time.
The most common way to make money (and what most people are trained for in school) is to be an employee. As an employee, you’re working for a company or organization and trading your time for money. You generally have the most “security” but the least amount of freedom as an employee (think W-2). You work the hours your employers set, follow their rules/handbook, and as a result, get paid a set wage (usually based on an hourly rate, but sometimes as a salary). Examples of this are everywhere – the cashier at the store you go to, the secretary at your office, a warehouse stocker, a janitor, teacher, office administrator, etc.
The second way to make money is as a self-employed individual (think 1099). Here, you don’t have a “boss,” but instead you are your own boss. It sounds great, but essentially you own your job here. You still trade time for money, but now you trade off some of the safety/stability of working for someone else and having a guaranteed paycheck for having to earn new business everyday. If you don’t sell something, you don’t get paid. Examples of this include lawyers, real estate agents, the owner of a landscaping company where the owner is doing a fair amount of revenue-generating/business-sustaining work, etc.
After that, you can move to the right side of the quadrant and start leveraging other people’s time or money to make you money.
In the business owner quadrant, you move yourself out of operations. You are no longer physically doing much of the work. Instead, you have employees doing the work on your behalf. You have scaled to the point where not everything hinges on you. If you decide to leave for a few weeks (or months), the business will still make money because of the people you have working for you, and the systems/processes you have in place. Think of Jeff Bezos, Steve Jobs, and Bill Gates as examples of this, but it can be on a much smaller scale too. Do you think any of them are out selling their products on an individual level, making the product, or packaging the product? Can they leave for vacation (or pass away) and have the company still survive (or thrive)? They leverage other people’s time so they can accomplish more.
Lastly, we have the investor quadrant. Anybody can be in the investor quadrant as long as they are investing in an asset that produces returns positive returns. The ultimate goal in the investor quadrant though should be to have your investments produce enough passive income to cover all of your expenses. once you get to that point, you won’t have to work another day in your life. You can choose to work, trillion time for money or being a business owner and working on your business, but you do not have to work. There are many ways to invest in assets, whether that is through index funds, mutual funds, cryptocurrency, and my personal favorite – real estate. Here, you leverage either your own money or, preferably, other people’s money to work and earn more money. The idea is that your money is working for you even when you’re sleeping.
Where I’ve been
As I write this, I’m now 31 years old. I’ve been working in some capacity for over half of my life now. I started working part-time jobs in high school on an alpaca farm, at a pizza shop, and landscaping. I took the first quarter off from work in college, but other than that I worked a minimum of 25 hours per week throughout the school year (and 40+ hours per week in the summer) at an office, as a personal trainer, and landscaping. After graduating, I began working 55-60 hour weeks at a food packaging plant, as a personal trainer and CrossFit coach, a gym manager, and a salesperson/project manager. I understand what it means to be an employee – trading time for money. I decided that this wasn’t the best path for me, even though I see how it makes sense to many people. The problem I had with it was two-fold. First, no matter how productive I was, my income was always capped. I could help the company make record profits, but it didn’t necessarily translate to an equal payday for me. But don’t hear what I’m not saying – I didn’t necessarily need to be paid in equal proportions to what I earned for the company. The business owners were the ones who took the risk to build the business and who spent the time, money, and energy in developing systems for me to succeed. It’s just that I knew my income and my family’s future would be capped if I stayed there. The second limiting factor for me as an employee is that I love learning and trying to implement new ideas. But as an employee, I had to stick to the rules and keep following what was working. I felt my innovative side was being stifled and I wanted to make my own rules. This led to my career change last year…
Where I am
As of June 2020, I became a licensed Realtor in the state of Ohio. The primary locations I focus on are Medina, Cuyahoga, Summit, Lorain, and Wayne counties. I generally work with people looking for a primary residence, and it ranges from first-time homebuyers, people looking to upsize, or people looking to downsize. That being said, my wife and I invest in rental properties and we work with other investors ranging from single family rentals/house flips, small multi-family, or commercial properties (such as apartments).
I’m now on a great team (The Casey Team) and working with an amazing brokerage (Russell Real Estate Services).
But even though I’m on a team, it’s still a 1099 (self-employed) profession. If I don’t sell houses, I don’t make money. I can cold call, door knock, show houses, and write offers, but if I don’t perform and close deals, I don’t get paid. It’s a 100% commission career and it can be stressful at times. But here, the harder I work, the more money I should make. My income isn’t capped.
As I mentioned, my wife and I do invest in real estate, but we also invest in the stock market with our IRA plans and her 403b. We also have the kids set up with UTMAs (Uniform Transfers to Minors Act) so they will be off to a good start once they become of age. We do not touch any of the cashflow from the rentals, dividends, or increases in equity that we receive from these investments and rather re-invest them so they can grow larger for us. This is similar to the example used for “make thy gold multiply” told in The Richest Man in Babylon.
Where I’m going (my plans)
My goal is to be able to retire by age 50. I don’t ever see a time when I want to stop working – I enjoy work, learning, and improving myself everyday. But I don’t want to have to work. If my family and I want to go on a long vacation, I want to be able to pick up and go.
With that being the end goal, I need to change a couple of things. First, I need my investments to produce a greater return. My goal is to do that through buying one new rental property every other year for the next 5 years, then hopefully increase to one per year (or more) for the following 15 years. We would hire a property manager so we are not handling the day-to-day items and it becomes a much more passive system.
I also want to move from the S (self-employed) quadrant to the B (business-owner) quadrant. While I don’t have any plans to open a brokerage, mortgage company, or title company, I would like to eventually be a partner on the current team I’m on and to get more Realtors on our team. Then we can have them out making deals while we help provide the support for them (with leads, office administrators, inside sales agents, stagers, photographers, etc). This will take time to build, and we will have to write up processes (and tweak them as we go). But this would eventually free me from the trading time for money conundrum that so many of us face.
If you have any tips or suggestions, feel free to leave them in the comments or to message me directly.
