MAKING vs MAINTANING Wealth

When making money (aka running your core business) you take a lot of risk with a little money in hopes for a great return.

Maintaining money (aka investing) you should be taking as little risk with a lot of money with the intent of a consistent and modest return.

Let’s talk about a life experience of mine that I learned the HARD way in the hopes that you can learn from my mistake and save yourself the brain damage & decreased balance in your bank account.

In 2020 we were all starting to go crazy. Everyone copes differently. 

For me, not a whole lot changed to be honest. My wife was baffled. Mainly due to the fact that I just kept the same routine up that I always had before Covid… I went to work every day, viewed properties, and kept pushing to grow as usual. 

Generally speaking I just wanted to focus on what was in front of me as opposed to listening to all the hype and chaos (and believe me there was plenty of chaos to consume!) 

It is also very important to recognize that I was in an industry that actually BENEFITED from the pandemic with home prices ballooning as opposed to those that were in the service industry for example. So I was fortunate it did not impact my day to day like it did millions of others.

However, in 2021, I started to take my eye off of my core competency in real estate when the crypto craze was at its peak.

So much so that I found myself opening up multiple accounts and buying these wallet sd cards and subscribing and consuming endless hours of YouTuber videos that would tell me how to read charts and when I should buy and sell this thing that, to be honest, I still could not to this day fully explain to anyone!

In other words, my focus had shifted from what I KNEW with certainty could make me money and decided I wanted to follow the crowd and not be left behind (FOMO) to these 25-year-olds on Youtube that were taking pictures of their accounts that now had increased 500%. 

I really struggled with feeling like I was working day in and day out to perfect my craft in real estate to make a pretty good living for myself while these other people were cutting line and becoming insanely wealthy in under a year (or so I thought).

THANKFULLY it goes against my nature to just quit my day job that I had been doing for a dozen years and put all of my money in something I knew nothing about…and so I put about 25k when all was said and done into various cryptos and long story short I lost about 10% of my money when I finally sold everything off a few months ago…

So while I did not lose a ton of money FINANCIALLY, much more importantly, I lost out on tens of thousands of dollars in opportunity cost because when I should have been spending my time and energy on my core business, I was distracted by the allure of the get rich quick scheme that turned out to be just another snake oil being peddled by people wrapped in a new package called Crypto.

Fast forward to today when I was driving into work, I listened to a quick podcast from Alex Hormozi, and sure enough, he too had a bad crypto experience (he lost 500k but fortunately for him that is the equivalent to me losing $2,500). 

He learned the same lesson…he wishes he would not have allowed his friends to talk him into investing outside of his competency and he did it due to FOMO.

As most of you who know me by now know…I try to learn from my failures and share with others in the hopes that you can avoid falling for the same mistake that I did.

When you INVEST your hard earned money, you should be taking LESS risk by placing those funds in things that have a very long track record of success with building and maintaining wealth over time.

Real estate is not the ONLY way to make great returns on your investment. But it does have a proven track record over time of exceeding inflation each decade and providing slow and steady returns when managed properly.

The ROI on a real estate investment when stacked up against the stock market or your 401k for example is staggering…And I can say with 100% certainty that if you stack up an investment in a mutual fund vs an investment with a turnkey rental property, the benefits you realize as a real estate investor DWARF the stock market.

You might ask how can I say that with that much certainty?

1. CASH FLOW
2. LEVERAGE
3. APPRECIATION
4. MASSIVE TAX BENEFITS

A mutual fund or investment in the stock market only has one or possibly two of the four benefits that I just outlined above. (Appreciation & Cash flow in the form of dividends if they are offered).

You cannot use leverage with the stock market like you can with real estate (buying a $100,000 asset for only $20,000)

And you do not receive the tax benefits that you would with real estate in the form of depreciation or accelerated depreciation, not to mention the mortgage interest deduction and other benefits that we will not get into in detail on this weeks email.

If you want to see just how much money real estate can make you utilizing these 4 pillars I explained above, check out this video. 

The video is about 20 minutes long and it dives into the weeds but if you have the time, I HIGHLY recommend that you watch this video to learn about all of the ways real estate investing will blow your 401k return out of the water.

Good news is if you have a 401k that you feel is not working hard enough for you, we can talk to you about rolling that over into a SELF DIRECTED IRA account to enjoy the same tax benefits that you had with a 401k but allows you full control to invest in assets like real estate within a tax deferred account.

It takes money to make money. 

Just like wealth creation is a skill set, so too is wealth preservation.

When you work to preserve your wealth, you have to keep in mind that inflation is at a minimum eroding your bank account every year by 3% or more. 

And remember, “If you don’t find a way to make money while you sleep, you will work until you die.”

So cultivating the skill set of making and maintaining wealth is imperative if you do not want to be working until you die just to survive.

Turnkey real estate investing can be a solid strategy for maintaining wealth. 

If you would like to learn more about some of our upcoming opportunities, feel free to schedule a call here: