{"id":76710,"date":"2020-02-27T10:00:03","date_gmt":"2020-02-27T17:00:03","guid":{"rendered":"https:\/\/www.biggerpockets.com\/renewsblog\/?p=76710"},"modified":"2021-03-16T11:52:19","modified_gmt":"2021-03-16T17:52:19","slug":"2016-01-31-cpa-taught-millionaire","status":"publish","type":"post","link":"https:\/\/www.biggerpockets.com\/blog\/2016-01-31-cpa-taught-millionaire","title":{"rendered":"What Being a CPA Has Taught Me About Becoming a Millionaire"},"content":{"rendered":"

Usually my articles<\/a> are all about taxes and how real estate investors and business owners should approach various scenarios and apply sets of tax regulations. I always try to share my knowledge to help you improve your bottom line.<\/p>\n

What I\u2019ve come to realize through speaking with and advising hundreds of real estate investors and having a front row seat to their financial lives and mindsets is that I\u2019ve learned quite a lot about wealth over the past few years.<\/p>\n

I\u2019ve learned about creative and unique means to generate wealth. I\u2019ve learned about market niches that are rarely brought up in the BiggerPockets Forums<\/a> that turn out to be quite lucrative. I\u2019ve learned about ways to mitigate exposure to various financial and market risks.<\/p>\n

However, one of the most beneficial things that I\u2019ve learned\u2014and the topic of this post\u2014is how millionaires build their wealth<\/a>.<\/p>\n

I\u2019m not talking about the mega-millionaires. While I\u2019m sure everyone would love to be in the \u201cmega-millionaire\u201d category, frankly it\u2019s unattainable for most. I\u2019m talking about the Millionaire Next Door<\/a> <\/em>type of millionaires. This type of millionaire is, as I\u2019ve found, relatively easy to become.<\/p>\n

Full disclosure: I\u2019m not a millionaire\u2014not even close. However, I have been lucky enough to interact with and advise many homegrown millionaires. Hopefully, you\u2019ll still be able to take away something of value from this.<\/p>\n

So what does the everyday millionaire do differently than the rest of us? They develop key habits, defer their gratification, and treat their \u201cpassive\u201d income like the most important business they\u2019ve ever run.<\/p>\n

\"woman<\/p>\n

The No. 1 Non-Money Habit of Millionaires<\/h2>\n

The number one\u00a0non-money habit that will make you a millionaire is waking up earlier than the rest of the world.<\/p>\n

I know it\u2019s hyped up and over-sold. I always rolled my eyes when I heard about this habit, too. I\u2019m not a morning person, and the thought of waking up before the sun was dreadful.<\/p>\n

But that was before I got into the business of advising successful real estate investors and business owners. That was also before I established this habit for myself.<\/p>\n

Waking up early has plenty of benefits; however, the two that stand out the most when I\u2019m conversing with clients are that it gives you time to work on projects you never have time for and it jumpstarts your productivity.<\/p>\n

Related:<\/strong> Building Wealth: What Key Practices Separate Millionaires From the Middle Class?<\/a><\/em><\/p>\n

The difference between people living mediocre lives and people living successful lives is that the successful people create time to work on the projects that the mediocre people dream about. Don\u2019t have time to review three real estate deals a day? Wake up early!<\/p>\n

The projects don\u2019t have to be real estate-related; in fact, they don\u2019t even have to be business-related. Maybe you dream about starting a podcast or writing a book about tea and food pairings. Maybe you just want to paint more often or get in shape.<\/p>\n

When interviewing my clients, other investors, and business owners, I’ve realized the most successful ones have some sort of cool project they’re working on. As I noticed the trend, I began inquiring not only about the projects but also about how they have time.<\/p>\n

The answer almost all of these successful people provided was that they wake up early. It\u2019s that simple.<\/p>\n

And think about it\u2014when you wake up early to work on the project you\u2019re always putting off, do you think you\u2019ll be excited to wake up? Not only will you be motivated to get out of bed, but your entire day will essentially see a jumpstart in productivity. You will create this sort of productivity momentum, which will result in you performing better throughout the day at your job, business, real estate, or whatever it is you\u2019re working on!<\/p>\n

I don\u2019t have scientific data. I don\u2019t know the neurology behind it. But I do know that almost all of the successful investors and clients I\u2019ve collaborated with wake up early to work on their various projects.<\/p>\n

I was skeptical at first, but I tried it. I read Miracle Morning<\/a><\/em> for some motivation, and I\u2019ve now created a habit of waking up early. My productivity has exploded, and I\u2019ve seen the benefits spill over into other areas of my life\u2014like business, investing, relationships, and overall health and happiness.<\/p>\n

Best of all, waking up at 5:00 a.m. isn\u2019t bad at all after a week or so. I\u2019m used to it and have a routine that motivates me to jump out of bed every morning.<\/p>\n

If you get nothing else out of this post, I highly recommend trying this for 30 days. The benefits will exceed your expectations.<\/p>\n

\"investor-habit-morning\"<\/p>\n

Deferring Gratification and Value-Add Spending<\/h2>\n

All, let me repeat, ALL of the successful people I\u2019ve spoken with understand the art of gratification deferral.<\/p>\n

The thought process goes like this: \u201cThat purchase will make me happy, but is it necessary today? Do I really need that product or service? Will it help me reach my goals?\u201d<\/p>\n

Oftentimes, the answer is a simple no.<\/p>\n

So they put off buying the new shoes, fancy dinners, and concert tickets. They buy used vehicles rather than new and expensive cars. They focus on saving and investing\u2014growing their dollar and paying their future selves. This allows them to get out of the rat race and snowball their investments into financial freedom territory.<\/p>\n

Buy the Tesla once your net worth reaches $1,000,000. Your future millionaire self will thank the present you for waiting.<\/p>\n

Another key trend semi-related to this topic is that successful investors and business owners focus on value-add spending and savings.<\/p>\n

For instance, one of the investors I know built up an enormous amount of wealth by simply owner-occupying multi-family properties<\/a> and slowly rehabbing all of the units. He would buy a fourplex, live in one unit for a year, rehab it, then move to the next unit and rinse and repeat. While he was flipping<\/a> the unit, the other three would be rented out, covering his mortgage and then some.<\/p>\n

He used this strategy for two fourplexes, and it took him about eight years to complete. He was able to 1031 exchange<\/a> those properties into a much larger apartment complex, which is valued at over $1,000,000.<\/p>\n

Related:<\/strong> 5 Habits of the Wealthy That Helped Them Get Rich<\/a><\/em><\/p>\n

One of my clients spends tens of thousands of dollars each year on seminars and trainings. However, she has a high net worth and has determined she can do this without it negatively impacting her financial position. Her business is centered on building a network of people, and she\u2019s quantified the value of every $1,000 she spends at these seminars and found that she will eventually earn revenue about twice the size of the cost to attend.<\/p>\n

But it wasn\u2019t always this way. Had she spent thousands of dollars going to a seminar while her business was trying to get on its feet, she may not have succeeded at all. In the early days, her money was better spent creating content, advertising, building a local network, and implementing business systems.<\/p>\n

She understood that while the seminars may be valuable, there were better things to spend her money on at the time to grow to a level where it was financially feasible to attend these larger events.<\/p>\n

\"several<\/p>\n

Treating Real Estate Investing Like a Business<\/h2>\n

One of the more eye-opening conversations I\u2019ve ever had was with a gentleman who invests in apartment buildings. I was showing him a property I thought was a good deal, and before he even looked at the deal, he asked me how the local economy was.<\/p>\n

The investors that see large-scale success analyze real estate<\/a> in a completely different way than the rest of us. The successful investors start by analyzing economic conditions of various cities, towns, etc. When they find one they like, they narrow down their search and identify the best locations and neighborhoods in the area.<\/p>\n

They don\u2019t start with Realtor.com. They also don\u2019t necessarily start by contacting a real estate agent.<\/p>\n

They want to understand the macro and microeconomic conditions that may affect their investment performance to determine if it\u2019s even worth their time to continue looking in the target area. Then they worry about building relationships and getting boots on the ground.<\/p>\n

And when you think about it, that simple reversal of the typical methodology many of us employ makes complete sense. Why invest in the best neighborhood in a city that has declining economic conditions? It\u2019s backward\u00a0logic.<\/p>\n

On top of that, before they even attempt to identify a property, they learn all they can about the competition in the area. If they want to invest in apartment buildings, they will find out exactly what the other apartment buildings in the area have to offer. If they find a value gap, they exploit it.<\/p>\n

For instance, the gentleman I briefly mentioned above told me that his apartment building has washer and dryer hookups, and no other apartment building near him has washer\/dryer hookups. Something that simple can give you a huge competitive advantage over all the other investors in your area.<\/p>\n

That\u2019s how businesses are run. There\u2019s a constant jockeying of positioning to have the best value-add offerings. The investors who understand and can identify competitive advantages will win every time.<\/p>\n

\"issue-1099s\"<\/p>\n

The Wrap-Up<\/h2>\n

Being a CPA has allowed me to peer into the financial lives of many successful real estate investors. Though I\u2019m not a millionaire myself, I\u2019ve identified habits, mindsets, and logic that I believe can make anyone a millionaire if they are all applied.<\/p>\n

I find wealth a fascinating topic, and I hope you are able to take something away from this article. Until next time!<\/p>\n

\"\"<\/a><\/p>\n

Which of these lessons strikes a chord with you?\u00a0What would you add?<\/em><\/p>\n

Leave your comments below!<\/strong><\/p>\n","protected":false},"excerpt":{"rendered":"

Being a CPA has allowed me to peer into the financial lives of many successful real estate investors. Though I\u2019m not a millionaire myself, I\u2019ve identified habits, mindsets, and logic that I believe can make anyone a millionaire if they are all applied.<\/p>\n","protected":false},"author":9994,"featured_media":118236,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"footnotes":""},"categories":[4241],"tags":[],"class_list":["post-76710","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-real-estate-business-management"],"acf":[],"comment_count":0,"_links":{"self":[{"href":"https:\/\/www.biggerpockets.com\/blog\/wp-json\/wp\/v2\/posts\/76710","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.biggerpockets.com\/blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.biggerpockets.com\/blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.biggerpockets.com\/blog\/wp-json\/wp\/v2\/users\/9994"}],"replies":[{"embeddable":true,"href":"https:\/\/www.biggerpockets.com\/blog\/wp-json\/wp\/v2\/comments?post=76710"}],"version-history":[{"count":0,"href":"https:\/\/www.biggerpockets.com\/blog\/wp-json\/wp\/v2\/posts\/76710\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.biggerpockets.com\/blog\/wp-json\/wp\/v2\/media\/118236"}],"wp:attachment":[{"href":"https:\/\/www.biggerpockets.com\/blog\/wp-json\/wp\/v2\/media?parent=76710"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.biggerpockets.com\/blog\/wp-json\/wp\/v2\/categories?post=76710"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.biggerpockets.com\/blog\/wp-json\/wp\/v2\/tags?post=76710"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}