The last laugh. My 2 cents about investing.

61 Replies

My day job is for a paper company. I'm a salaried manager and I've been working here for 33 years. A few years ago me and my wife started buying rental property so we could retire a few years earlier than we normally would have been able to. We aren't in this for a quick buck but look forward to a steady second income stream. We have bought one house a year for the past 3 years and we have the means and motivation to continue this practice for years to come. We live well beneath our means and save money so we can keep buying houses. Nothing remarkable here. If we can do it, anyone can.

This brings me to the point of writing this post. A few weeks ago, the company I used to work for offered a lump sum buyout of the pension I have with them. All of the managers I currently work with used to work for this company before our division was sold to another company. During a meeting we had to discuss the various options we could choose from one of the managers (that I have never got along with) made a comment in front of the group about how he wanted to hear from Alan about how to buy rent houses

(I'm not planning to use this lump sum buyout to buy property. I plan to invest it in a self directed IRA.).

I asked him what he wanted to know and he just laughed and the group disbanded. For a few minutes, I thought he was serious but I quickly realized he was just using this opportunity to make a joke about what I was doing.  My boss did the same thing about 4 years ago when I told him I was going to start buying rent houses. People say things all the time or have big plans that they never follow thru on. I hear stuff like this from some of the hourly employees. Real-estate has been a solid investment for generations and has created more millionaires than I can probably count. I never proclaimed to have a goal of millions in income in a few years so I'm not sure why they think this is a joke. My goal is to make $5,000 a month by the time I retire in 8 years. More would be better but I try to set reasonable goals for planning my retirement strategy.

Now that we have purchased a few houses, my boss has changed his attitude a little. I told him my wife now has the opportunity to retire in just a couple more years and that would have never been possible without the extra rental income we have right now. The more we buy, the sooner I can retire at the level of income I want to be at instead of retiring and trying to live off Social Security, 401K, and the pension i will get from my current job. I really don't see an end to this. We can keep investing as long as we want to and build this up as big as we choose. I encourage those around me (hourly, salary, and personal friends) to look for ways to make money outside of their regular jobs. I like doing home repair work and that works well with having rent houses. I work with an hourly employee who started selling chicken nest boxes a couple of years ago. I didn't see how he could make much doing this but at least it was something he was interested in. He has now expanded to being more of a distributor and makes well over $60k a year doing this just on the weekends. He keeps his regular job for the security and insurance.

I guess some day I will have the last laugh when my little adventure of buying rental property starts really paying off. It is already paying off in multiple ways but when my boss or other managers ask about it I just smile and say "yeah, we make a few dollars" or "it's going okay". I don't waste my time or energy on people like this. My advice to anyone who wants to invest in real-estate is to make a plan, follow thru, and ignore those negative people around you.

@Alan Pederson

Alan you will have the last laugh!

I got a lot of negativity in the early years but just keep on buying rentals. Became a millionaire @ 29 and a multi millionaire by 42. Who's laughing now... I am! Money doesn't buy happiness but it does buy freedom to do whatever you want in retirement. 

Stay the course and never give up!

I only know that this has worked out pretty good so far and I don't see any reason why it won't continue to work for me. I have heard comments asking what I would do if the market drops like it did in 2008. I just say I will be able to buy the next house cheaper.

There are always opportunities even in a down market. You might have to ride it out for a few years but if you plan for it, it won't be a surprise. I live well below my means and keep plenty of cash reserves so i'm not concerned. I work with a few people that live paycheck to paycheck and they've done this for years. That would scare me to death. Most of the managers I work with (10 total) are in their mid 50's or older and only a couple of them have a plan for retirement. They all drive nice cars and live in houses much bigger then mine. I work with hourly guys that live larger then me. I don't think they're looking at things long term. I look at things 10, 20, or 30 years down the road. It does no good to live in a big house and drive an expensive car if you can't put any money away. I lived house poor in my early 20's and won't do that again. When I retire, I want to be able to travel and see the grandkids without worrying about paying my car payment or still having a house payment. These people will be working well into their 60's or more because of the lifestyle they're living now.

Alan, your post is an absolute encouragement!  Staying the course in real estate investing will bring rewards that most will never get to experience.

@Alan Pederson Great post, I’m sure many can relate.. I’ve learned in my short REI career is best to share what we do w do with only select few at our day jobs. A LOT of people have a negative perception of landlords or REI.. Some automatically think we want to be slumlords ive heard that comment one too many times even if its just jokingly. The majority have no idea how much work it takes to build a good size portfolio while managing our time and commitments at our day jobs..

I LOVE proving people wrong and making them grovel at my feet later. Its actually one of my biggest motivators in life.

congrats to you for ignoring the distractions.

I think a lot of LL get "criticism" like that, especially when they're just starting out. I'm glad you just brushed it off.  There's a "slumlord" in the area that I work in (he's actually a genius, but people call him a slumlord because he doesn't keep up the properties that he owns...but he rents to all the tenants nobody else wants to and he makes a ton of money doing it) and I've had people/co-workers call me by his name. They're trying to be funny and I have a great sense of humor, so I just laugh and move on. It's just jealousy. 

On your last day, be sure to let this guy know that he could've been retiring as well, but he was too busy making fun of you, instead of learning from you.

great post! thanks for sharing.

When I chat with people about REI, I would say the 80/20 rule plays in to effect.

80% don't have a clue about REI. 20% have some knowledge about REI and know it's potential at some level.

of that 20%, 1/5 of them will talk and talk about REI and are revving to get started in it, but never do.

of those folks, 1/5 of them will actually take action and buy property for rental.

So overall, from that 100% of folks surveyed, 1% will take action.  Meaning, those 1% are going against the grain, social norm and meet resistance all the way up but will be far better off than the 99% over time.

When they call me slumlord at my w2 job ,I ask them if the company went under and they couldn’t find another job how many days could they go without a steady paycheck .. then I remind them I get steady paid regardless wether I work or just lay in bed . That usually shuts them up real quick

They hate you. I really believe that. They hate you because you escaped. You broke the code. It was easy, and that makes them feel even dumber. Everyone I know and worked with wanted me to rethink it and stop buying homes. In less than 5 years. I walked out of my cubicle. Left all my stuff. just stopped coming in. Gave my 6 figure job to the next beggar in line. 

I feel dumb for not doing it sooner. My wife and I discuss regularly how shockingly easy it is to make money (now that we have broken the code) 

we decided to take time out and go on a cruise then bought camper and took road trips all over. we were like, you know, we should go back home and buy some more houses. It's fun. I'm working some deals right now and I am having fun. This is not work to me. I feel very Blessed!!!

My first deal was a mobile home park. So many people could not understand why we sank our life savings and sold everything we could to buy that place.  

But dang does that thing make me money. F-o-r-e-v-e-r. 

Some people just don’t get it. 

@Alan Pederson You’ll have the last laugh when you see them at the bank withdrawing cash from your passive income stream. While they are in line depositing their unemployment check. With artificial intelligence, machine learning, and technology rapidly developing. Your boss and co-workers will be out of a job. Unless you are in tech or REI say goodbye to your W2 income. And even those who are in tech like myself know our day may come to. Keep it up, you are on the right path.
@Alan Pederson love it! People don’t pay attention or just write you off until it’s undeniable. They aren’t worth thinking about or wasting your energy on. I love that I get to be around like minded people most of the time. Nobody cares that I drive an old car or live frugally, it’s all in the pursuit of more freedom! I know another broker that works in my office that also works with investors. I saw him jumping in a brand new $70,000 car the other day while I jumped in my 2005 Mazda 6. We don’t have a big gap in gross sales, but it’s clear where the priorities are.

I love all the comments.

I hear things all the time that make me want to put these people I work with in their place. I hold my tongue because I know if I say what I really want to that it will just get me into trouble. The best revenge is to live a happy and successful life. I spent a lot of years just coming to work, doing my job, then going home to just do it again the following week. Some people are happy with making enough to pay their bills and having enough to buy food, cigarettes, and beer. That is what makes them happy. I want a little more.

I think as my portfolio continues to grow, it just makes some feel like they aren't successful and they lash out to compensate. I've tried to encourage the ones that will listen but it's easy to come up with excuses why you can't be successful. Doing nothing is easy. The bad part is that some day you might look around and wonder why you spent so many years just going thru the motions instead of trying to have something better. I've heard it all. My wife just won't save money (she spends it as fast as I make it), I have kids, I don't make enough, I have a big car payment or house payment, etc, etc... Not trying to pick on any women. I work with almost all guys and that's their side of the story. Me and my wife spent 10 years saving up money to buy the first house. We had 2 teenage daughters still at home when we started. We helped put them thru college and paid for nice weddings. It would have been easy to buy a bigger house or new cars but that didn't fit into our plan. The plan is to live below our means and save money to buy more property so we can retire with a steady passive income. It wasn't always easy and we had more then a few fights along the way. We agreed on a plan and anytime we moved away from that plan I would have to remind my wife what our goal was. I'm very conservative and my wife isn't. She doesn't spend like crazy but if I get a bonus, her first thought is where are we going to go to spend it. My first thought is, this will all go in the bank. We usually end up in the middle some where. We save most of it but spend some on home repairs or take a little vacation. We take one nice vacation every year (I never did this before I met her) and we might take a few mini vacations. I long weekend in San Antonio, Arkansas, or Broken Bow are common for us. It doesn't cost a lot and we have fun and relax for a few days.

I'm not rich or a genius and if we can do it, anyone can. I really think FEAR is what stops most people. Fear of failing, fear of the unknown, and even the fear of succeeding. If they do well, then what? The guys that tell me they aren't happy with their life are the same ones that keep doing the same thing over and over. Isn't that the definition of insanity? If you're not happy with the people you date, you have to date someone that you normally wouldn't. If you're not happy about your financial situation, you have to make better choices, find a better job, cut spending, get a roommate, etc.

I've read several book on investing and some on real-estate. I've learned lots of good information but none of them are very motivating. They give you the nuts and bolts of investing and that's great!

I want to read something that gives me that plus stories mixed in that inspire me. In my spare time I write down my thought and have logged my journey along the way. Maybe some day I will put out my own book.

friends and people at work call me a slumlord all of the time.  They also love to make fun of my little old Ford Focus that I use a pickup truck.    

I'm all good with it.  

I don't need any acceptance of the path I'm going on.  

I just tell them horror stories about gross houses I've rehabbed or how many dumpsters I needed to clear out a newly purchased rental.  I wear those stories with a smile and laugh.  I see those clean-up times as dreams and smell of money, while others can't get past them as being a nightmare.  

I now live mostly with my wife's family all around us as we are living overseas. My own family , that is, relatives on my mother's and father's side all live in the USA.

When I met my wife 3 years ago her and her mother were viewed as being at the bottom of the totem pole and also at the bottom of economic achievement and wherewithal. I quickly got my wife into real estate investing in her area and within the 3 years we have been together she now owns two SFH outright plus one development land and one commercial piece of land, and again she owns them outright whereas all of her relatives who either own businesses and/or real estate have come by their assets using financing and they will be paying for those loans for a while yet.

Everything has turned around and now my wife and mother in law are viewed as the being in the top social/economic position within their entire family. In Asia where we live where you stand within your family is considered where you stand in society in general because every body's life revolves around their family. They even have a family  law structure that supersedes the government laws here. Something akin to the tribal law system which the government chooses to cooperate with and respect in order to better maintain social and national order. Through real estate investing within 3 years my wife has increased her net worth from (zero) to over $600K USD equivalent, an unheard of amount here for most of the entire population of approximately 95 Million People. There are however an unexpected number of very wealthy and even ultra wealthy individuals as there is throughout Asia. 

I have also noticed that if you ask the average citizen here most have never thought about real estate as an investment vehicle or even as an investment category and it is mostly foreign investors that are implanting the idea of viewing real estate as an investment vehicle and as a way to create wealth and reach financial freedom. However, almost everyone is aware of the benefits of having and running your own business so they are used to thinking that the way to financial success is through working hard , with devotion and discipline. 

Me being a real estate investor in the USA I was anxious and excited to talk to anyone who would listen about using real estate investing as a way to financial success and freedom and people kind of just let what I said go in one ear and out the other but also i notice that , that is changing little by little and now everyone in my wife's family is very conscious of the potential benefits of real estate investing. I laugh to myself  because not my wife's family member can hardly talk about anything else other than real estate investment and assets. Gains throughout this country are mostly realized through appreciation as the rental market here still does not provide any kind of significant gain, but visiting tourist are slowly having an impact on that as well.

I knew it was a wise idea to purchase houses here as then one could buy a house outright for not much more than $10K , but the most we could get in rents was $30.00 USD equivalent/mo. so we decided to pass on creating rental income but lately Airbnb has contacted us on renting through them at an average rate of $100.00 per day to vacationing tourist and that does sound attractive though we have not actually signed up with them yet but we are certainly thinking of trying it. 

Plus more and more companies are establishing here and offering employment with much higher wages than most people around here are used to earning but as more and more people are able to earn higher wages then I know sooner or later the rents are going to go up significantly. This country is already experiencing a housing shortage of over 10,000,000 units and as the population grows that is only going to get worse, and more importantly right around where all of the new higher paying jobs will most likely be locating, and that just happens to be right where we are and where we are recommending to everyone we know to buy, buy houses, buy land , just buy any kind of real estate that comes available for sale. Already right where we are projects like sports arenas, hospitals,  new commercial and residential 

buildings are slated to go up soon.

If real estate investing makes sense to you then stick to your guns as time will mostly likely will prove you right as you are have probably discovered already.

Once you are full time and doing this for a few years you won't hear about the negatives from people.  Regardless, the only person I ever let fuel me and penetrate my mental barrier was my father when he told me it couldn't be done.  Outside of that I just assumed anyone that was going to be negative was just being self conscious and insecure and it had zero impact on my goals.  

@Alan Pederson It's hard for those to understand the strategy when they don't have plans. However, I learned a lesson hardway by discussing my personal investments with my boss and coworkers. I was frankly discussing my progress with my boss of over 3 years as to how many houses I have and income it generates etc. Last year our company was going through merger and were restructuring. He made a decision to lay me off so he can keep another manager who did not have means to stay a float. Irony is that the new guy was on the job for barely eight months. When he handed me my severance, he said now you can focus full time on your properties. At that time I realized how discussing too much personal stuff can be detrimental to your career. Not everyone is your friend. So my advise, keep it to yourself, don't get carried away to help everyone you encounter at work. Of course you will have last laugh over others because you are lot smarter than them.