Changing Careers – Keep the Money
Think about this for a moment! When I buy an Income property for $40,000 less than its true market value using my investment knowledge, how much tax do you suppose I’ll have to pay on the $40,000 I’ve just earned using my buying skills? No matter how you do the math, the answer is zip-like in none! Now think about the same $40,000 that you earned last year at the factory in wages. Assume you’re a family of four. I’d bet that when we add up the state, federal and social security taxes withheld from your earnings you’ll be lucky to take home $28,000 for ~ whole year’s worth of work.
You’re talking about giving up or losing $1,000 every month. I’ll earn the same $40,000, but the difference is I’ll end up keeping it all and it didn’t take me a year to earn it.
The difference is I’ll end up keeping it all
Remember we’re only talking about one small deal here. This stuff gets real exciting when you start thinking about several deals going on at the same time.
If you follow my reasoning, you’ll understand that the quickest way to become a successful investor is not so much dependent on how much money you have, but rather skillfully using all the dollars you earn to advance yourself. The idea is to quickly build up your money-making assets and substitute your tax battered wages with cash flow earnings from your Investment houses. Living off tax sheltered rents allows you to legally beat the tax man and keep all your earnings to build your own wealth
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Changing careers like I did is not for everyone, nor should it be. Folks have different goals and dreams. For those who wish a change in their every-day life or have decided what they do now to earn a living might be temporary or shaky, allow me to give you a few insights into the world of a full-time real estate investor. I’m qualified because I am one and I’ve made some serious money doing it.
I decided to buy older houses and small apartments that needed fixing up. My reasoning was: I can do much of the work myself. Plus, I can buy them for much less cash down because there are fewer serious buyers for unsightly distress-type properties. I also thought that once fixed and cleaned up with a new paint job, older rental houses would command about the same rents as equivalent-sized newer houses. The same thing is true with the older rundown apartments, although I’ve always favored houses because tenants rent houses quicker than apartments.
Once I decided where I wanted my plan to take me and are choosing inexpensive fix-up houses as the vehicle to get me there, I considered how much risk would be involved. Shopping centers are high risk properties. Land speculation is more like gamblin” Bare land can go for years without any income or payback. Special use buildings like airport hangers, bowling alleys, auto factories and resorts can sink an investor quickly if the tenant moves out. You limit yourself to a very specialized group of tenants when you own “special use” properties. It’s dangerous for beginners who normally don’t have holding power (extra cash reserves).
That’s exactly what new investors need non-existent risk.
I knew from the beginning I could not stand many vacancies. Too much risk of any sort was not what I wanted or needed.
It’s very important to stay within your means financially and to acquire the type of properties you can personally handle yourself. If you do that, you can almost write off the risk factor. Inexpensive rental houses and small apartment buildings will always have long waiting lists of qualified tenants if you keep the properties looking attractive and in good repair.
The single most dangerous roadblock facing every career-changer is procrastination. There is no doubt that many folks with the bet intentions and even a good workable plan will procrastinate forever. Look around you. How many people change careers versus how many simply talk about it? Don’t let the odds hold you back. Remember, financial success is not about having good luck. It’s about having a good workable plan and you’re working that plan.
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