My many years of coaching people have brought me into contact with with 1000’s of “successful” people. And naturally, with my lengthy real estate investing background, many of those people have been “successful” real estate investors. I also happen to spend a lot of time with “successful” people in the digital marketing arena.
Why the quotation marks?
“Successful”
Well, nowadays I’m careful to throw that word around—not because these people aren’t successful, but because the way we measure success is up for interpretation, and can be very different sometimes.
“Success” is defined in the eyes of the beholder.
A great many real estate investors are considered successful simply because they do deals.
Some are considered to be successful because they do real estate investing full time—basically it is their job.
Some are considered successful because they have very high incomes as a result of their actions.
While all 3 of these examples are distinctly different, any of them will be considered very successful in the eyes of someone.
A factory worker can successfully pull off a deal purchasing a rental property, and be considered successful for having purchased a property. We don’t even know if the property is profitable for the new investor, but we consider it a success.
Some people actually quit their jobs and flip properties for a living. Many people look up to these investors and consider them to be successful.
Even the high income earners in this arena, while enjoying the success of their operation, really just have a different job and they are their own boss. If they don’t work, they don’t make money, but they were successful in becoming their own boss.
Still some perfect the business and earn substantial incomes with real estate investing ,and their high incomes leave many in awe of their “success”.
Of the many thousands of “successful” people I’ve encountered over the years, there’s something that seems to be very elusive.
It is extremely rare that I come across a truly wealthy real estate investor.
We’ve repeatedly heard over the years that more wealth is earned through real estate than any other vehicle. Yet these people engaged in real estate for a living don’t ever seem to amass much wealth.
High Income ≠ Wealth
Truth be told, I’ve seen many people with a high income, but I’ve seen very few people with substantial wealth.
Investors who’ve been in the business a number of years seem to always be looking for someone to lend them money for their next deal. They talk about their extreme incomes, but never seem to be able to fund their own deals. It doesn’t add up.
Let me say it again: Making a lot of money does not make someone wealthy.
I’ve come across many people that earn over $200,000 per year that are broke, and can’t fund a $20,000 purchase or emergency situation without borrowing the money.
I’ve been teaching my close students for years to develop a wealth plan.
Most people understand a business plan and have some kind of plan they’ve executed and that can earn them a substantial income from their business. But few people, it turns out, have given any thoughts to developing a wealth plan, resulting in their high income being spent on things (and wealth is never achieved).
Having said that, rarely do I come across someone that doesn’t want wealth.
In fact, they believe in their mind that they already have a wealth plan of some sort, but it’s just not been executed or realized yet.
Understand this: Your wealth plan should be developed and implemented immediately—not “someday” when you have a lot of wealth to invest.
Why? Because becoming wealthy is a learned discipline before it’s a reality. And your greatest friend in being successful with this is time—time is the greatest factor in becoming wealthy, so get started now, not later.
The Specifics Matter
I believe you need to be very specific about what you are going to do to amass wealth.
This plan needs to be well thought out just like a business plan, and for the most part, your business and your wealth plan should not be one in the same. The only exception I can think of is if you are building a business that can )and will) be sold at some point in the future.
I’ve seen many people throughout the years say that they were investing more into their businesses (which is a good thing) but they were never really amassing anything of value.
Your wealth plan should be:
- well thought out,
- easy to execute, and
- not take much of your time.
There are many ways to build wealth, and one of the most common is to invest into the stock market. This is a passive form of investing that—with a good financial planner—will require little to none of your time. You can start small and start now.
Some may choose rental properties.
My plan is simple: I don’t chase after all different kinds of deals and properties, instead I invest in what I know, single family homes. My goal has been to purchase one great quality rental property per year with cash. I’m focused on accumulating enough cash each year to add one nice rental property to my portfolio.
I also invest into the stock market. Historically I’m against the market, and frankly, it scares me. BUT—it’s 100% passive, and I’m in it for the long haul. I do not micromanage it, I simply add to it each and every month, and let the market do the work for me.
Other wealth-building options: You can invest into businesses (that other people run) or lend money.
Look, how you approach it is your call.
But the more specific you can be about what types of investments, and how much you want for a return, the better off you will be with building wealth.
I frequently help my coaching students to develop their wealth plan. We tackle it pretty comprehensively, taking into consideration their goals, talents, ability to put money aside, etc. —definitely not a one size fits all kind of thing.
With a little bit of thought and some discipline, most people can begin to see substantial wealth being built up in as little as 3 years. At around 5 years they begin to see drastic results.
And with those results comes a sense of security and peace.
They have something real…
Not just a big paycheck that comes in fairly consistently, but a machine that’s working for them and gaining wealth along the way.
This machine begins to create tremendous freedom. After all, isn’t that what we desire?
I’m curious how this hits you. Have you ever considered crafting your own wealth plan like this? Questions and comments are welcome.