My first mentor in real estate investing was a dear colleague, a second generation real estate investor who nudged me to start building my real estate portfolio around 2012, which in hindsight was the perfect time to get started. But it wasn’t until a few years later that I eventually took the plunge. And I didn’t necessarily set accelerated goals for myself till more recently. Pondering over what really holds us back, it is clear we have to fight both internal and external influences to get started. I’d like to take a closer look at these factors today hoping that the insight will help you take the leap.
How we hold ourselves back can be broadly categorized into our understanding (or lack thereof) of how money works for us (the concept of Assets and Liabilities) and our own limiting beliefs (the things we tell ourselves that stop us in our tracks).
Reading “Rich Dad Poor Dad” was eyeopening for me, because it introduced the concept of Assets and Liabilities to me in a whole new light – an Asset being anything that puts money in your pocket and a liability being anything that takes money out including your personal home and that fancy car that you just leased. It got me thinking about how I needed to accelerate asset building if I ever wanted to have options other than staying in the rat race till retirement age. Because as long as I wasn’t generating enough in monthly passive income to replace my income from my job wholly or in part, I was essentially stuck.
The book also clearly puts you into one of four categories, and I realized that I was boxing myself into an E or at most an S, while the smart thing to do would be to be a B or an I. As Warren Buffet’s famous quote goes: “If you don’t find a way to make money while you sleep, you will work until you die.” Sounds kinda morbid, but it just hit me how true this was. Not to mention the numerous tax incentives and deductions that the tax code offers Business owners and Real estate investors for stimulating the economy, that in turn play a huge role in accelerating their personal growth.
But truly, even armed with this knowledge, we still have to fight our limiting beliefs – the little voice in our head that tells us how maybe we don’t have it in us to see this through, or maybe we need to know more, have more reserves, or that it’s too risky, what if we fail? Most often the only thing standing between us and success is our self-doubt. You could have no rentals, looking to take the leap – or a few single family homes, looking to venture into Multifamily homes – or be a long time investor in Multifamily homes considering taking the leap to small apartment complexes – sometimes we just freeze in Analysis Paralysis. That’s when it’s great to have a mentor or a community of like minded people who have similar goals, support us and in a way hold us accountable. This is why I also feel that a strong “WHY” and Goal setting are so important to taking the first baby steps. We covered the Why in a previous post and I want to briefly touch on goal setting as a means to get you out of a rut – telling yourself that you want to own x number of doors or properties in y years or I want to have x in passive income by year y and more importantly surrounding yourself with supportive people who will hold you accountable to that goal is a great way to get started and boost your self. Do not underestimate the power of the company you keep – in propelling you forward and in holding you back, so choose wisely.
But everything said and done, you still have to be able to defend yourself against all the external influences that say it can’t be done…. like the well meaning friends who think it’s the wrong time to be investing in real estate (gently remind them that if you invest in cash flowing properties and do your due diligence you will be able to weather storms), or the relatives who share horror stories of a friend who had to go unclog a toilet in one of his rentals on a weekend (that is what property managers and handymen are for) … or the spouse who just isn’t ready to take the plunge (because trust me, when they say NEVER- it just means they are not yet ready and you still have more persuading to do, hopefully with solid numbers backing up your proposal). When you are ready, please don’t let someone else’s limiting beliefs become your own.
Because when you don’t hold yourself back and don’t let others hold you back – when you finally do take the plunge, you will see that your first property will set you free. Once you see the numerous benefits of investing in real estate firsthand, you will kick yourself for not having started earlier…