Once upon a time there was a typical kid who lived with his six sisters in a lower-middle class part of Denver, Colorado. It was during his first year of college that he discovered that the fathers of two of his classmates each had built a respectable net worth by investing in real estate. From that point on, the young fellow knew that he wanted to make a living by turning ones into twos.
As you undoubtedly guessed, I am that kid.
I got my real estate license ten years later and would have liked to make dynamic investments at that time, but I had no resources to invest, so I joined the sales department of a small property management company. I sold enough homes to make a respectable living, but more importantly I found out that I indeed had a knack for the business and especially with rental properties. I worked for several different companies over the next 22 years before I eventually retired at age 49.
After I retired, I developed and taught a continuing education course for Realtors and wrote my first book called Instant Experience for Real Estate Agents, which was designed to assist beginners.
I was also invited to speak to several real estate offices about the things I’d learned. Since, my investment portfolio had grown to nearly 300 rental units, consistently mostly of apartments, my constant emphasis was, “Be your own best client.” The point was that Realtors should constantly be on the look out for good investments because those investments could send them consistent income whenever sales commissions slowed down.
The Question and Answer session always led to an inevitable string of questions such as, “Where do we get the down payment to invest?” and, “I need all the money I get now just to get by.” Interestingly, most of those people drove fancy cars, or lived in fine homes, or found opportunities to dine at luxurious restaurants or go on extravagant vacations. It seemed odd to me that they had money for those things but little or none to invest. Stranger still, they could still have most of those things if they knew some of the other ways they lost money without even knowing it.
As a consequence of their mistakes, they never developed an alternate income, so they lived under the constant pressure of having to produce at high levels to maintain their lifestyles. Sooner or later the predictable slow months rolled around or they were struck by a family emergency, and their stress levels became even worse.
Then, one day I decided to figure out how much money these people lost in their lifetimes by throwing money away. I crunched the numbers and was genuinely shocked to discover that each individual lost nearly a half-million dollars in buying power. A typical married couple, in essence, throws away nearly a million bucks in buying power through their working years. That’s simply too much to ignore.
Once I realized that most of the people who were asking those questions had the same horrible financial practices as many of my low-income tenants, I knew that they all could use some extra money, and I knew just where they could get a big chunk or it: It was already swirling in and out of their purses. They simply needed a few pointers about insurance, banking, buying cars, compound interest, passive income, credit reports to get to it. Since I already knew nearly all of that information, I wrote my second book, “Stop Flushing Your Money Down the Drain”.