But earning the money is only the first step. After that, it’s really important to be smart with it. So don’t stop learning, even if you achieved all the money you were after.
If you don’t want to become one of the “windfall casualties” you hear about in the news, you have to ask yourself again right now – what do you want your life to look like in 5-10 years? 20 years? After that?
When the money begins to flow, the natural temptation is to go buy all the goodies and gadgets you never could afford before. Maybe you’re not spendy, but while a lesser brand used to be just fine, you begin instead to purchase higher end items, because (perhaps) for the first time in your life, you finally can.
This is not a slam on high-end products. High-end often means the product will last longer, or perform better. But in many cases, it does not. Sometimes the marketing sells us on only the perceived (not real) value, and when money isn’t tight, we can become an easy sell.
On another note, it’s certainly reasonable to get caught up on neglected repairs, and reward yourself with some wonderful things, but most who feel the adrenaline of sudden perceived freedom can’t see clearly where to draw the line.
So unfortunately, those who get a QUICK windfall often find themselves back to broke in a very short period of time. They just can’t imagine unexpected market shifts or other setbacks that can cause similarly quick REVERSALS, unless they do the uncommon thing: jumping the tracks from a quick money mindset, to thinking slow, steady, and patiently about long-term strategies.
To do so is not common nor natural. It really takes conscious thought, and the practice of “delayed gratification”.
So, what should you do instead?
Goal #1: Build a steady and predictable passive cash flow
With the money you earn, begin building or investing in a passive income. Once the passive income exceeds your expenses, then you’re financially free. A person with a million dollars in the bank and no cash flow is NOT free.
Related: Blood Banks and Your Finances – (this is really good!)
Goal #2: Wait until the extra income can pay for it
After some of your money has been converted into passive income, and after your passive income exceeds your expenses, then let the extra passive income pay for luxuries – if you choose to have them.
Either way, avoid building a luxury lifestyle on stagnant money (money in the bank instead of cash flowing money). And since “luxury” is relative, I’m talking about whatever is “luxury” to you.
It can wait.
Also, don’t spend all of your earnings on your lifestyle. It’s okay to downsize if it means improving your cash flow. It’s okay to buy used if it means you have more to invest. Unless you make some of these hard decisions, there may be nothing left to invest in your future – and your future self will be really frustrated with you!
So if you have money in the bank – invest it.
Don’t let it just sit there, and don’t spend it on consumables. Learn how to earn a decent return on it. Convert it to cash flow.
If you run a business, or if you have discovered what Garrett Gunderson calls your “Soul Purpose” – that is often the most honorable place to put your stagnant money to good use. Plan A – Let it help you grow your own business cash flow.
Plan B – But if your business is more of a hobby, or if don’t have a business, or if you don’t know what your Soul Purpose ought to be, you can still put the money to work, so it can be growing while you figure it out. It could even fund your Soul Purpose, so that you can do what you love because you enjoy it, instead of doing it because you HAVE to make it pay.
How to make it grow? One way to build a steady, long-term cash flow is by investing in real estate. And I’m not talking about the quick buck; I’m talking about the boring side of long-term real estate investments.
But not just any long-term real estate; it has to be the right kind, in the right location. (Sadly, most areas in the country today are NOT right for the 7-10 year strategy I want to share with you.)
Would you rather have a doctor’s income of $250,000 annually and an upper-class lifestyle but no passive income, or be a contractor with a modest income and one-million in assets? What about a teacher who only makes $40K/year, but discovered how to pick up some cash flowing real estate rentals that provide her with an additional $4000/mo passive income?
There are 3 types of wealth – but only one of them provides true freedom, and it doesn’t matter how much you make. With some preparation and planning, anyone can get into the game.
Reality Check (and a true confession)
Did you know real estate played a big part in our first financial breakthrough?
We went from broke and falling behind, with ZERO real estate investing experience and no money in the bank, to nearly $300K cash tax-free in just a few years, because of real estate. And it’s true, we didn’t know how to reinvest it, or where to draw the line on our spending. We had been so broke for so long, that when the money finally showed up, (and even though we TRIED to be smart with it), we still made some foolish mistakes that we didn’t fully recognize until many years later.
So we made a lot, (and lost a lot), but most importantly, LEARNED a lot.
That’s why we’re more attracted than ever to the slow and boring long-term strategies that StrongBrook is helping us implement now. We are happy and satisfied to grow at something closer to nature’s pace. To me, it feels more reassuring to work with the laws of success towards a life-plan, instead of the quick and big (but repeatedly needed) windfall.
I think it was our setbacks and the pain that accompanied them that brought us to this place where we both have more patience in the slow growth process. I’d rather it come long and solid now, instead of quick, big, and fleeting!
So as long as we hold our vision for where we want to be in 10 or 20 years, I am happy to trust the principles will continue to steer us, and I’m actually enjoying the journey more than ever. Going more slowly allows me to take more time for myself and for my family. It just feels right.
What We’re Doing Now
My husband and I are now working with our long time friend Gary Norris and preparing to build a retirement portfolio through StrongBrook – a research / property acquisition / management team that does all the heavy lifting for us – all the real estate work that we used to do for ourselves, but which we don’t have time for anymore.
StrongBrook does all of this for its investors:
- Identifies the right cash flow and growth markets
- Shops the auctions
- Rehabs the properties
- Finds the renters
- Manages the rentals
…so that the investors don’t have to. This has become part of our long-term retirement plan, and we invite you to check it out for yourself.*
Funny Story: How (and why) we got involved
Gary Norris has been a great friend and support since we met in 2007; and as an avid Jackrabbit Factor fan, he has generously helped me spread my message on his radio show, and through live events for many years.
More recently, Gary has been bringing investors to this portfolio-building opportunity for a couple years, and so his wife recently asked me to speak at one of their date-night socials at Kris Krohn’s home. Kris is the company founder.
That was my first real introduction to what StrongBrook does, and as BURNED as we felt from failed investments of the past, I was shocked to learn something that changed my tainted perspective on the topic of real estate – something I didn’t think could happen.
I recorded the conversation and then took it home to my husband. It shifted his perspective just as powerfully as it did mine.
What I heard there (while I waited for my turn to speak) made all the difference.
* Your Next Step
If you want to know what changed my mind about real estate:
1) Click here to listen to the first 30 minutes or so I played for my husband. You can also hear the 1-hour presentation I gave the group afterward on mindset – some new stuff on the principles you probably haven’t heard before.
2) Click to request a FREE GAME PLAN from an adviser at StrongBrook Corporate Office.
(Look for the big Red Button in the upper right of the webpage)
During your telephone appointment, you’ll tell them how much of a passive monthly income you would like to create (and your target retirement date), and they will reverse-engineer a strategy that will help you build the right real estate portfolio to accomplish that goal.
If you can’t invest in real estate now, they can still show you how you can break into the game when the time is right.
It’s all about planning ahead – creating that long-term strategy to get you where you want to be. You have nothing to lose by learning more about the possibilities.
We hope you will join us. Click here to request your FREE, no-obligation Game Plan now.