There are hundreds of quotes to help motivate you to change what you would like to change. Unfortunately there is also the quote, “maybe next year”. Let’s pretend the second quote doesn’t exist and it is imperative that you make the change this year.
In order to accomplish that task, you have to believe that it is imperative. Look at your finances, work hours, spare time, and part time. What needs to give to make your dreams a reality?
It really irritates me when someone says to me, “if you were really successful you wouldn’t work”. Really! Because Warren Buffet, Bill Gates, Oprah Winfrey and Robert Kiyosaki are all wealthier than I am and they all still work. Success is not the product of laziness it is the product of desire.
My husband and I were very happy middle-income earners when we purchased the education. A few of our friends thought we were just going through a mid-life crisis when we purchased our first few rehab houses. As a matter of fact I had a friend who went out and bought a car that cost the same amount as my first investment home. During this time Bob and I were both working full time and our son was on a travelling soccer team. We had several hard choices to make and I want to share with you the questions we asked and decisions we made.
How many hours a week are you giving to your future? This was a tough one for us. We both worked, we both went to soccer games, Bob played golf and I did all types of crafting on weekends to donate to the church plus I love to read.
Our solution: We struggled with this and then began keeping track of our time as though we were contract employees. We kept track of all time by the quarter hour for one month. We then decided that each of us needed to carve out at least 20 hours per month for our business. We each decided on our own where we would create our time. There were definitely bumps along the way and as our business grew we needed to create more time. At times I would resent Bob having 5 uninterrupted hours to play golf, when I felt that my time was always being interrupted. Bob’s solution was for me to go with him to the golf course, take my book and sunscreen and have 5 uninterrupted hours with him. The result was we met many people who were able to spur our business forward, and Twelve years later we now play golf together on our days off.
How much of your net worth are you willing to lose in order to change your life? As a Mentor, I can tell you this is a very difficult question for many people. Bob and I had worked for 30 years to obtain what we had and I thought long and hard about what type of risk I was willing to take. Bob had the attitude of let’s go all in, we either make it or we don’t. I was not quite as ambitious. It took some very long and serious talks for me to decide I was OK losing everything as long as we had a house, not the 4 bedroom 2 bath with a pool and billiard room that we have now, but a house. As a matter of fact I decided that if we lost everything I would be OK moving into my $73K first investment house and starting again. Robert and Kim were willing to sofa surf and live in their car. Now this may sound drastic but I have to say it was very liberating. The reality was if we did nothing and retired with our small 401K’s and Social Security I would probably not even have the little rental house. Once I knew my risk tolerance it was much easier for me to work the business. I have had other investors tell me that these first two items changed their lives.
Ok the hard decisions are over, let’s work on building your business. First and foremost you must understand the numbers. This is fifth grade math and it is not the numbers that concern you it is what makes up the numbers. This is called “underwriting the deal”. The calculations you should master are Cash on Cash Return, ROI, Debt Service Ratio, and how to calculate the return on equity. It is fun and exciting to learn the techniques and work your marketing, but if you can’t recognize a deal from a dud, you will be spinning your wheels. Make it a point to learn this math from your classes and put a little extra effort into self-study. Trust me once you know how to recognize a deal you will then be able to be creative in the deal structure.
And finally, give yourself permission to be wrong. We all are, some maybe more than others, but we all make mistakes. It is what you do with the mistakes that will make or break your business. When a group of investors get together, there will always be “war stories” or “arrows in the assets” that will be discussed. We try to minimize your risk by sharing our mistakes, but that just means you will probably find some of your own to make, we all do.
My challenge to you for 2014 is by the end of January sit down with your business partner, spouse, significant other, or maybe just some self -reflection and answer the first two questions. By February you should have mastered the formulas for deal creation. For March and April, I would like you to schedule 3 business related meetings a week. At each of these meetings you should discuss your business model and work to build your power team. For each person you meet with ask for a referral of someone else that may be able to help you in your business.
If you follow the plan by May you should be working your new business, and you may even need to go back to step one and determine where you will find more time. I do not do that craft work for church anymore, but I am able to make donations to the charities I support. I am playing more golf and spending more time with my husband and very often we are working the business on the course.
This is the plan we followed and a year after starting the classes I left my employment of 17 years to do this business full time. A year later my husband left his job and at that time I started mentoring and then training for the organization that had given me the ability to create my own financial freedom.