Are you running after shiny objects? We are all sensitive to them. Their greed is like a siren song for investors to increase cash flow and build wealth.
I’ve spent years as a certified glossy object chaser. You can call it entrepreneurial investment. As a serial entrepreneur, I loved starting companies. I got a charge of strategy and planning and dreaming. As long as we were at the entrepreneurial level, I got a thrill and it just felt like work.
As a two-time finalist for Entrepreneur of the Year in Michigan, I was sure I wanted to be on the entrepreneurial path for life কিন্তু but I also wanted to be an investor. When I sold my company to a public firm at 33, I moved from entrepreneur to entrepreneurial investor.
I expected to get the same thrill from the investment I got as an entrepreneur. That was a big mistake. Now I know that great investments should be boring.
Paul Samuelson, the first American economist to win the Nobel Prize, said: If you want excitement, grab $ 800 and go to Las Vegas.
I thought I was a full-time investor. But I was really a full-time speculator. I probably went to Las Vegas too. And this life has affected my health, my relationships and my ability to enjoy life. It wasn’t as promising as it used to be.
A reformed speculator
After suffering from many speculative losses over the years (although there were some gains), I realized the flaws in my path. I understand the difference between investing and estimating. And I chose the “tedious path” of investing. I stopped trying to swing for the fence and started swinging for singles and doubles. And this is the most successful era of my life, both as an entrepreneur And As an investor.
This reform also included the reform of focus. I read classics now One thing By Gary Keller and Jay Papasan. I realized that to say yes to what I really wanted was to say no to a thousand or more confusions.
For me this “one thing” is to create a carefully verified portfolio of recession-resistant commercial real estate assets. My goal is to create security, cash flow and appreciation, including meaningful tax savings. And invite as many people as possible who want to come on the ride.
Another thing for me, which is really part of one thing, is to create meaningful educational content to help others in their real estate investment journey.
As part of this effort, I learned about many powerful investment strategies. This includes strategies that I used to chase in my heartbeat when I was younger, such as David’s strategy (keep reading more about this).
And I can meet strong investors and operators. Operators who use their entrepreneurial skills create new systems and strategies for creating cash flow and assets and have a lot of fun along the way.
Get David in
I recently attended The Real Estate Guys Investors Summit on the sand of Belize. I was surrounded by brightness for eight days, and it really felt like an investor paradise. Honorary faculty members included Robert Kiyosaki, Ken McElroy, Tom Wheelright and G. Edward Griffin.
But the 200+ real estate investors in the room were just as attractive. The conference was charged with ideas and strategies that would turn the head of a real estate investor.
I met a curious man named David. Like me, David had an engineering background and he worked at a major Detroit automaker. He took the strategy of leaving the job by combining a unique portfolio of hill cabins operated at Airbnb and VRBO. In 2017 he achieved his goal of quitting his lucrative job in almost three years.
Because of his strategy, he removed it in just 10 months.
I needed to know more. David and I talked for hours. I took notes. I did my own calculations. And I excitedly told him what a great strategy this could be for a 1031 exchange ticking time clock.
David’s projects were particularly interesting because he used debt. The availability of 90% loans on extremely valuable assets has given David the opportunity to keep about 100 100,000 in a মিল 1 million mega-equipped mountain cabin. It was in an area of compressed supply due to an unusual natural disaster a few years ago, so there was a high demand for such cabins.
David reports a net cash flow of ০ 600,000 or more (up to $ 6,000,000!) Per year, which is a 60% + cash-on-cash return. In addition, he created a system to make this investment semi-passive using virtual assistants. To put it bluntly, the location was within a few hours of my home, and my family was often there on vacation.
I got involved. And for me as a future owner, the promise of his semi-passive activity sealed the deal. I can, of course, invest one hour (or two, top) per week to earn% 0% ROI in cash flow, not to mention more than 10% annual asset valuation, adding another significant cash on-cash return when I refinance or sell. . .
This will probably be the highest ROI resource in my portfolio. A place where my family loved to vacation. Without virtually any effort. And it will provide considerable diversification to my portfolio of commercial real estate assets.
Then why didn’t I say?
Something was bothering me. I was too late to make a convenient decision. I mentioned the others to David, who helped them find and acquire similar cabins. I’m happy for them (and still a little jealous). But I did not move forward. I did not say.
I took the necessary time to consider all the effects. My decision depends on several important factors.
- Heaps of confusion. Any small distraction is still a confusion. And while I was 99% confident about the effectiveness and profitability of this investment, I knew in my heart that getting a loan, closing it, choosing a few replacement furniture, and hundreds of other “simple” things would add up. But I am already on a successful investment track. My firm is doing exactly what we did, and I love it. At the moment, I need to focus more on what is working and trimming everything else.
- Violation of the “one thing” principle. Authors Keller and Papasan teach that laser focus is the key – every hour, day, month and year. This is the matter that will gobble up energy and brain space. See point no. D.
- Blind in a holiday home. I’m all for the holidays, and for the holiday home. My vision was shattered by the fact that these cabins were preferred by my family. I almost broke that rule. By focusing on my “one thing”, I can create enough growing cash flow to stay in any vacation cabin or any area in that area. I don’t need to have my own to enjoy it.
- Happy investing. In a 2018 study entitled “Happiness, Income Satisfaction and Turning Points in the World”, Andrew Zeb, Louis Tei, Ed Diener and Shigehiro Ishi Shi, using a sample of 1.7 million people worldwide, found that there are 60,000 income satisfaction points worldwide for experiencing happiness. And উত্তর 65,000 in North America. At this level of income, above, the sample people did not experience much happiness. This is clever because I am trying to create a lot more resources in the world to fight human trafficking and rescue its victims. But the potential of this investment can easily work against this goal to distract me from my main focus and add to my weekly workload – without providing any more happiness. So maybe it will only hinder my happiness.
- To create a meaningful legacy. I want my legacy to include investment in powerful causes such as the end of human slavery. But my legacy includes time to invest for my wife, my children, friendships and the local community. I am already struggling with this and the 34 years of marriage have failed a lot. I think this Great Investment can be the enemy The best In my life.
- It sounds like entrepreneurial investment or speculation. It’s exciting! But I am committed to making the tedious investment. And this investment also depends on things that I know very little about. Am I really an expert in mountain vacation cabins? What do I want to be?
Why did I get you through this process?
I am in my third decade as a real estate investor and have had almost 30 years as an entrepreneur. I gave in a few cycles and I made a lot of mistakes. I am old enough to be the father of many readers. I’ve had a lot of success starting from making the most mistakes. I am in the harvest and inheritance phase of my investment life and my goal is to help others in their process.
I wanted to peek inside my brain at how I took this decision process. It doesn’t apply to everyone, and that doesn’t mean it’s necessarily right for you, but I thought I’d bring back the screens on why I really got into a big deal.
Take an investment deep dive
Want more in-depth analysis like Dave? A successful investment requires accurate, easy-to-understand information about your assets and the markets in which you invest.
My two deal soapbox
I also want to get up in my soapbox for a while. While the following may not apply to you, I guess it will apply to many.
I know myself well at this stage of my career. I know what I know … and I know there are a lot of “simple” things that I don’t know well. This means that I can identify deals that I do not understand well. Deal that would be a misleading one.
I have come to the conclusion that I only want to invest in two types of contracts.
- Deals on which I am 100% I combine a team, knowledge, expert appropriate work, systems and much more. These contracts consume most of my time, attention, resources, systems and team.
- Deal where I am 100% passive. I understand resources and, most importantly, operators, and I know this operator is not doing it emotionally. 1, above, on my behalf. And I know that this operator is avoiding the same kind of confusion that I am ruthlessly avoiding.
For example, if I invest with a mobile home park or self-storage operator, I want to know if they are not actively buying mountain cabins. Or they are so successful that none of them are managing all this kind of confusion for them.
Remember that I must spend a good deal of time working hard to make this option. Therefore, in a sense, it is inactive only after the initial due diligence effort.
Anything other than these two options is probably a confusing glossy object or a risky guess for me. And I’m making enough money that I don’t have to.
My family can’t wait to take our next mountain cabin vacation. But it won’t work Us Cabin. We will spend the holidays and invest in happiness without owning that cabin.
And I can’t wait to pay my next monthly payment as an investor in my own funds. It will not have a 60% annual ROI, but it will be predictable, stable and robust. We’ll also be happy to know that we’re helping hundreds of other investors follow my two rules – so they can actively make money, add value and focus on enjoying their lives and families.