As we get closer and closer to our end goal of being 100% financially free, we are being asked more and more, “what is the key to your success?”
As you might expect over the course of 11-12 years of investing, there have been lots of great things. Such as:
- Running it as a Business Not a Hobby
- Being bought in together and as a team
- Selling near the top and buying near the bottom
- Getting great mentors like Tony Alvarez and Bruce Norris
- Staying focused on repeating a successful model and not getting distracted by the latest or next great thing
- Turning to Private Investors and paying double digit interest so they earned their fair share
While each item in the list above is important (and there are lots of other factors I could have listed but didn’t) I still haven’t highlighted our #1 key to success.
Simple put, our key to success as we march towards true financial independence is …
I say that word and people roll their eyes and say yeah – yeah I get it.
But truth be told, most people have no idea what we have sacrificed over the past 12 years now. In order to appreciate and put some context around our sacrifices I will list just a few examples.
How to Invest in Real Estate While Working a Full-Time Job
Many investors think that they need to quit their job to get started in real estate. Not true! Many investors successfully build large portfolios over the years while enjoying the stability of their full-time job. If that’s something you are interested in, then this investor’s story of how he built a real estate business while keeping his 9-5 might be helpful.
The first one I call “Thanks Honey”. Flashback to 2008 and 2009 with me for a second. We were actively buying great REO properties for under 50K that consistently rented for $1,000 or more. We were prepared for the market as we had capital, investors and a hard money lender to back us up as we kept buying.
But then something happened that could have delayed our date of financial independence by years if not a decade. What was it?
As our investment market crashed in value, the area where we live also had a decent price drop. We were seeing nice single family homes in great area’s available for sale at discounted prices. Now keep in mind we live in the Silicon Valley where prices are never really down for long so we had a choice.
We could stop buying great REO’s that produce cash flow, sell a couple of cash flow assets and then step into nice single family home with a yard. Would it surprise you to hear we live in the same condo we bought 15 years ago? It should also be noted that we have long wished to have a single family home with a yard as we have two small dogs.
So after thinking long and hard and seeing some great single family homes we decided to double down and cash flow real estate and forgo the single family home with a yard that we have long dreamed about.
I call this “Thank you Honey” because it was really Olivia’s sacrifice more than mine. She could have easily said we are buying “that” house and that would have been the end of it. We would have signed up for a much bigger house payment, higher taxes and lost out on our chance to secure financial independence. This one sacrifice alone is the single biggest reason we are so close to true financial independence. How many of you would have made the same choice?
I can write a lot more about financial or doodad sacrifices like not having a new car for 10+ years, or not buying this or that expensive item as we have had many an opportunity to derail or slow our march to financial independence.
The last sacrifice I would like to highlight is the sacrifice of time or I should say down time.
The reality is we work crazy hours for our day job and we invest in a market that is 6+ hours round trip from home. So while some folks chose to relax or enjoy hobbies on the weekends we have chosen to continually research and investigate the next deal which means lots of trips to Fresno.
Again, I have to thank Olivia because by now I am sure we have driven to Fresno north of 200 times and she is just as excited the next time as she was the first time. The ability to work this hard for this long is great sacrifice because it would have been easy to say “enough is enough” long ago.
So I ask you this question:
Are you and your significant other willing to sacrifice for 10+ years for true financial independence?
If so, great! Get going.
If not, you might want to think of a Plan B, because working at this type of investments at anything less than fully committed together will lead to stress and lost money – not financial independence in most cases.