“Mom, I’m upset!”
“Are we still there?”
Boredom was my number one enemy as a child. It’s 50 years later, and I still hate to be bored.
That same attitude led me to embrace the adventurous life of an entrepreneur after four short (but somewhat dull) years from the Ford Motor Company.
Five years after selling my company to a public company, at the age of 33, I have carried the same attitude in my investment career. I call it entrepreneurial investment.
And it can be deadly, in more ways than I knew.
Who could have guessed that I would speak of the joy of embracing monotony?
Paul Samuelson was the first American economist to win the Nobel Peace Prize. He speaks of the joy of boring investments. He once said, “Investing should be like seeing the paint dry or the grass growing. If you want excitement, grab $ 800 and go to Las Vegas.
“If investing is entertaining, if you’re having fun, you’re probably not making any money. Good investing should be frustrating,” said investor George Soros.
Making money while sleeping
Do you make money while sleeping? Warren Buffett did. He said, “If you don’t learn to make money while sleeping, you have to work until you die.”
What does he mean? Omaha’s Oracle is instructing us on the importance of creating cash flow from our assets, and not betting on speculative price increases on equities or cryptocurrencies that can fluctuate daily – or prices that are under the Wall Street mood, CEO scandals, or wars in the Middle East.
This is one of the reasons why Buffett wants the stock market to close on its acquired equity for a decade. He wants companies to focus on real value creation, not stock price inflation.
It’s about making money from money, which puts you in the bottom right quadrant of Robert Kiyosaki’s cash flow quadrant. This is the quadrilateral where the lowest tax (often zero) is paid.
Have you noticed how the rich enjoy low income (even desire)? This has seemed strange to me over the years. But it is understandable when you realize that they have already made millions of them.
Preserving their goals. And they create predictable cash flow to fund their lifestyle and leave an inheritance. And their risk-adjusted incomes are often higher.
They do not seek the highest return. Instead, they look for predictable yields that protect them from negative risks.
Roughly speaking, the resources that generate this kind of predictable return can make you gasp. They don’t do TV shows about them. Books on these subjects rarely make a list of bestsellers. Cryptocurrency and day trading are more fun.
Jeff Bezos once asked Warren Buffett, “Why doesn’t everyone just imitate your strategy? It is not so difficult to understand. “No one wants to get rich slowly,” Buffett quipped.
“Remove your hand from my wealth!”
My friend and colleague BPR Kevin McGuire has plans to retire in his home country of Canada. His well-trained planning advisor manages Kevin’s portfolio with dedication. Like most managers, he prefers individual stocks. But Kevin knows this is not his safest and most profitable plan.
He studied the benefits of boring ETFs (Exchange Traded Funds). These benefits come in the form of both predictability and performance. And they were hands off; They need virtually no supervision. Joan.
Kevin had a hard time transferring his advisor to his fund ETF. It was an ongoing fight until Kevin finally got off his feet. He instructed his adviser to open up his assets. Set it and forget it.
You see, Kevin learned the pain of betting on individual stocks a few years ago, his employer watching his options hour after hour. He’s lost sleep over it and a part of his life, and it could probably make a good change for him, as we’ll see below.
Kevin also noticed that his most annoying real estate investments performed best. It’s not the shiny object that attracted new investors; It was long-term retention that produced stable returns.
And there has never been a better time to hold on to the long-term debt growth in real estate in the midst of an inflationary cycle than to mention in my post about wealth growth.
How are you Where do you find annoying real estate investing?
The answer is quite conceivable. But not always helpful.
It’s up to you. Do you have access? What makes you excited – oops, you mean?
Are you knowledgeable about that? Do you have more money to invest, or more time? Who are your advisors, and where do they invest? Where have you done the most appropriate work?
Kevin only invests in equities and real estate that do not require daily measurements. He does not care what the experts predict. There is no stock left in his iPhone stock ticker app. And his previous habit of testing it is a distant memory.
Here are some tips from my real estate experience.
- Single- or multi-family homes (operated by third parties) with long-term tenants.
- Own tenants who do their own maintenance.
- Passive investments or flipper direct loans with a trusted solid money lender.
- Passive investing with a proven syndicate.
- Passive investment in a diversified private real estate fund.
And a dozen more options that fit your budget, lifestyle, and goals.
As you can see I like passive investing. I have written about this many times. I believe it with all my heart. If you’re looking for opportunities to be low-pressure, set-it-and-forget, efficiently managed real estate assets বির bored-I think passive investing is a great option.
It is estimated that it takes about 10,000 hours of practice to become an expert. We can all be experts in just a few areas. If you are already an expert in a particular real estate niche and want to go deeper there, you may find a lot of joy and life and peace, even monotony in being on that track. You have more power!
But if you haven’t, this could be a wild ride recipe. A ride that is neither funded nor profitable to look at.
It is very good to be an entrepreneur. Knock yourself out. But when it comes to investing, I recommend comparing it to seeing dry paint.
Let it be annoying
We are discussing the financial benefits of boring investments. But there are also emotional and spiritual costs to exciting investments. So, let’s look at the concept of real wealth in this regard.
Real wealth = wealth that generates income. I have often discussed my claim that your ability to create a cash flow to support your lifestyle and influence the world well is the essence of wealth.
Extraordinary cars and toys can be signs of wealth, but not the essence of it. And they can create real wealth (assets that generate income) for someone else: your banker.
I would also assume that the real wealth is also freedom.
- Released from the time of trading in exchange for dollars.
- Get rid of worries about the value of your options, your crypto account, or the next gamestop.
- Freed from toilets, tenants and garbage.
- Freedom to use your time and money to make a difference in the world.
- Release from pain in every financial decision.
Sailing in monotony
You have already met my friend and colleague BP investor Kevin McGuire. Kevin, well, rather annoying.
And she’s proud of it! Just like me.
I was talking to Kevin last night, and he told me about his sailing club. Kevin’s club members are allowed to choose how to pay their dues. They can pay a monthly subscription fee or pay a usage fee when they travel.
Kevin was close to Seattle, and he was around the boat world for a while. He knows that most boat enthusiasts live in less water than they dream. He argued that every use-based model would save him money.
But Kevin isn’t just annoying. He is rich.
Not just financially. He has got a rich mentality.
So Kevin chose the subscription model. But that’s probably not what you would expect.
Kevin chose the subscription model because he wanted freedom. Freedom to weigh every decision to maintain financial balance. Freed from worrying about rising costs when his friend came to town and he wanted to show him Puget Sound from the deck of his rented slop.
For Kevin, the real asset is the freedom to make everyday decisions. Decisions like buying or selling a volatile equity or bitcoin position. Freedom to decide whether the tenant will be evicted (his property manager is quite capable). Release from the stress of exciting investments.
Hidden costs of exciting investments
Exciting investments can usually be called by a more accurate name: guess.
Investments are made when your principal is usually safe and you get a chance to make a return. Guessing when your principal is not safe at all and you get a chance to come back.
Guessing is usually more exciting. Investments are usually more profitable. And low pressure. And more freedom-generating.
The richest investment in the world. And they invest in the most boring assets. The assets that make up the predictable cash flow. And freedom.
Because real wealth releases with financial risk, financial anxiety, stress and other freedom fighters.
Real wealth generates more time. More resources. More freedom. A good life.
I told you how Kevin learned about the annoying ETFs and the beauty of investing in annoying real estate. His training ground has been spending endless hours looking at the price of his stock options
Kevin told me that he had lost countless productive hours in this pursuit. As a result, his job and his success in life were likely to suffer. And thus, his wealth is probably reduced in the process. He lost sleep over it, and his productivity was further damaged.
I have noticed that those who are disciplined in stock tickers and other “exciting” investments are not always fully present in a group of friends. Their minds seem elsewhere. They are not free.
Kevin didn’t pay much more into his options for all his worries. But perhaps its net worth in terms of time, money, relationships, health and productivity has been damaged.
Years have passed. Kevin has adjusted his investment to support his lifestyle. ETFs have replaced individual stocks, and he rarely checks the balance. He is not the primary manager of most of his real estate investments, and he is completely inactive among others. He trusted the experts to deal with the details and he collected the checks.
Kevin owns the assets that earn. Kevin has real assets.
As a result of many smart steps and a new vision of wealth and freedom, Kevin moved away from a lucrative technology salary, choosing not to climb the stairs on Amazon. He had a nice job and a good life there.
But he wanted a great life. He wanted freedom. And passive investments in ETFs and real estate have made it a reality.
So, Kevin Pal. She enjoys friendship and sunset. He decides how to spend his time. And he makes a difference in life like me. And hopefully yours now.
He believes that the purpose of wealth is to support a great way of life. Life of peace. He told me, “The way one builds and maintains their wealth should support the same way of life, and not deviate from that way of life in this way.”
I learned a lot from Kevin, and I hope you have too. The freedom he has financially and otherwise is interesting. I believe this is what we all want.
Who is ready to be bored now?