Real Estate Investing Basics

Successful Investing while Holding a Full Time Job – Key #6: Delayed Gratification

Expertise:
72 Articles Written
delayed gratification for real estate investors

As we wrap up our 6 part series on successful real estate investing while working full time I want to first review the previous keys to successful real estate investing while working full time.

Want more articles like this?

Create an account today to get BiggerPocket's best blog articles delivered to your inbox

Sign up for free

Our initial key required securing full support from your significant other. We followed up this key with the idea of investing time in during the required homework to learn your market as key #2.  With this base information on your market we asked you to establish a buying criteria to run your business as key #3.  After gathering base metrics and information on your market we asked you to review your business and understand what is “Core” to your business and what is “Context” with the key #4 being outsourcing non core activities.   Key #5 revolved around leveraging time, dollars and equity to insure maximum return on constrained or managed resources.

The sixth and final key to successful real estate investing is all about not stopping the momentum you work so hard to build.

The sixth key can go by lots of names like:

“Delayed Gratification”

“Don’t Buy Toys”
Put simply I think of it as:

“Don’t Spend Real Estate Cash or Equity on anything but more Real Estate”.

If you are running your business based on these six keys you will likely have some positive success and start to see the trickle of positive cash flow or equity gains depending on your chosen model.

If you are three or five years into a ten year plan and you decide you need a new car or an expensive trip based on your Real Estate success you are wasting precious assets and making a big mistake.

A mentor of mine Rich Weese (Author of Janitor to Millionaire – Great Book!!!)  likes to talk about a penny doubling every day for 30 Days.  Do the math it is pretty impressive (.01, .02, .04, .08 etc – It gets to over 10M by Day 30 – Crazy and so Cool).

If you spend money during year five of a ten year plan it would be like stopping the doubling at day 20 and starting over (not a good idea).  I would say stopping at day 20 and going back to zero is a huge mistake so don’t do it.

If you do the first 5 keys correctly but screw up key #6 you will at best be stuck in neutral as you continue to stop the compounding of your assets. Watching your assets compound can be a lot of fun!!!

If you need to spend some money on toys or extras then only use your W2 income from your full time job.  In our model you work full time so use those funds to support the extras.  But don’t go overboard as you want to maximize dollars invested in Real Estate.

Delayed gratification isn’t fun and it won’t allow you to keep up with the “Jones Next Door or Down the Street“.

But what do you want: another toy or better quality life for your family as you execute your plan.

Generational wealth can be accumulated by slow and steady progress towards your long term goals.

With that we will close our 6 part series on what it takes to be a successful real estate investor while working full time.

Quick Wrap up

Key #1 Get Significant Other Buy In
Key #2 Do your Homework
Key #3 Set Buying Criteria
Key #4 Focus on Core and Outsource Context
Key #5 Leveraging Time, Dollars and Equity
Key #6 Delayed Gratification

Good Investing

Photo: Jay Tamboli

    Sharon Vornholt
    Replied about 7 years ago
    Great series Michael.
    Mike Z
    Replied about 7 years ago
    Sharon Thanks it was a lot of fun Good Investing
    Tod R
    Replied about 7 years ago
    The compounding effect, and its impact on the delayed gratification concept, is a deceptive law. You may not consider it to be that big of a deal to take a little of the “house money” out of the pot and spend it. But as you say, it’s impact on your long term goals is dramatic. My wife and I will always discuss the impact on the future value of our savings of any potential major expenditure before making the purchase decision. Thanks for the series Michael, great reads! Tod
    Mike Z
    Replied about 7 years ago
    Tod Thank you it was a lot of fun. Good Investing
    Tod R
    Replied about 7 years ago
    The compounding effect, and its impact on the delayed gratification concept, is a deceptive law. You may not consider it to be that big of a deal to take a little of the “house money” out of the pot and spend it. But as you say, it’s impact on your long term goals is dramatic. My wife and I will always discuss the impact on the future value of our savings of any potential major expenditure before making the purchase decision. Thanks for the series Michael, great reads! Tod
    Tom
    Replied about 7 years ago
    Great way to wrap up the series. I like how you used the doubling effect and the results if you buy a toy along the way.
    Mike Z
    Replied about 7 years ago
    Tom Lots of people think they can take a little of the table and it is no big deal. Big mistake Good Investing
    Jeff Brown
    Replied about 7 years ago
    Your advice in this last of your excellent series will ‘rescue’ many plans from underperforming, or failing altogether. Dad strongly emphasized the same thing as I entered the business. The result was that I didn’t buy MY dream toy (car) ’til I was over 50. Owned it for five years. Was totally worth it, as the car was awesome on wheels. Was also well worth waiting ’til it wouldn’t sabotage my plan. Superb series, Michael.
    Mike Z
    Replied about 7 years ago
    Jeff Nice work – By the way I want to come down to San Diego soon and talk shop with you if you are up for it Good Investing
    Arthur
    Replied about 7 years ago
    Thanks again for the well thought out content and advice. BTW – was that car your daughter going away gift to college? lol!!
    Mike Z
    Replied about 7 years ago
    Arthur You are very welcome it was a lot of fun. As for the car that was just a years worth of tuition payments …. Kids are expensive!!! Good Investing
    Arthur
    Replied about 7 years ago
    Thanks again for the well thought out content and advice. BTW – was that car your daughter going away gift to college? lol!!
    Jeff Brown
    Replied about 7 years ago
    Any time, Mike. Gimme a heads up and we’ll make it happen.
    Ben Clardy
    Replied about 7 years ago
    Great series of articles. Very informative and content rich. Thanks for the read!
    Ben Clardy
    Replied about 7 years ago
    Great series of articles. Very informative and content rich. Thanks for the read!
    Ben Clardy
    Replied about 7 years ago
    Great series of articles. Very informative and content rich. Thanks for the read! Reply Report comment
    John Winston
    Replied about 7 years ago
    -Mike I am enjoying your posts and learning more about real estate investing from good people. This post reminds me of what my Dad always tells me. “Do the things today that most people won’t, and tomorrow you can do and have the things that most people can’t.” Thanks for giving back. -John