On today’s show we’re talking about the flexibility of being a real estate investor.
When I had a job and was short of money, I needed to wait until the next paycheck. If I really wanted to increase my income, I had to wait until I got a raise, or perhaps a promotion. I could take initiative as an employee and my employer would be appreciative of the extra effort. Somewhere down the road, I might get a raise or a promotion. Someone else was in control of that process. There was no direct connection between my effort, the creation of value, and the financial compensation for that extra effort.
After all, that’s the difference between being an employee and an entrepreneur.
Then about 10 years ago I made the switch from being an employee to a full-time real estate investor and developer. Let’s be clear, my income took a hit. I had saved a bunch of money hoping that my business would take off before my savings ran out.
Somewhere along the way, I came to the realization that each of the projects by themselves could generate some income. Some projects ran into delays and the income I was expecting from those projects didn’t materialize. At those moments it was tempting to go back and get a job with a steady 6 figure income.
But somewhere along the way, I realized that I could truly generate income at will. It could be the result of taking on a new project. If I needed an extra $5,000 I could host a workshop that would deliver something of value to people in my network. It could be a class on underwriting rental apartment projects. Perhaps I could say yes to the numerous offers of consulting engagements. Maybe I could flip another house, or wholesale a contract. I could generate income at will.
So here we are in the year 2020. Tens of millions of people are out of a job. But the vast majority of them are waiting on the sidelines, waiting for someone to hire them, waiting for someone to discover their hidden talents. That process involves sending out resumes to hundreds of places, hoping that your resume gets on a short list and maybe you’re invited for an interview.
I’ve been that hiring manager many times. When I post a job these days, I will usually get 50 applicants within a day or so. Of those, maybe four or five are a good fit and worth calling in for an interview. There have been times when I had to review 600 resumes in a single resume review session. When there are that many to review, you really don’t have more than about 5 seconds to spend with each one.
I feel bad for all those folks who took the time to send out their resume. We can’t practically response to all of them. For those who are looking to generate income, there’s an awful lot of waiting involved.
Let’s contrast that with the world of entrepreneurship. In my world, income involves solving problems. If that sounds abstract, let me make it clear.
You might be walking down the street and notice that a house has tall grass. You could walk up to the house, ring the doorbell and tell the homeowner that you couldn’t help but notice their grass hadn’t been cut in a while. Would you like me to take care of that for you? I would solve that problem for only $30. Some might say no, but I believe you wouldn’t need to visit too many houses before you had $30 in your pocket.
Maybe this example is a little too trivial. After all, you’re not going to go and start mowing people’s lawns.
Maybe your expertise is in project management. You might walk up to a real estate investor who is overwhelmed with flip properties and offer to solve the project management problem for them.
You see the secret to generating income at will is based on the power of using your senses and your curiosity to notice problems that need to be solved.