Note: This little ditty was excerpted from the December 2017 Issue of My Cashflownaire Letter.
I’m a partner in a 24-unit apartment building here in Ohio. I manage this property with two of my partners. All three of us have a large portfolio of income properties. Our full time jobs, if you consider this a job, is buying and managing real estate.
Once or twice a month, we’ll spend a day working at the apartment complex. We simply group a bunch of “to dos” together and handle them during these work days.
Some items might be: meeting the city inspector, having the fire extinguishers serviced, meeting contractors for estimates and collecting coins from the laundry machines.
Every time I go to this particular property, I happen to notice that many of our tenants drive very nice cars. In the parking lot, you’ll find Caddys, BMWs, and a Mercedes Benz or two.
Here’s a picture I took recently:
Now if you look at the cars driven by the three managing partners, you’d probably notice:
- They are all over six years old. Two of the three cars are over 10 years old.
- The cars are not flashy or impressive.
Based on the ages of the cars driven by the owners of the property, you might make the assumption that they are paid for.
Instead of using our money to buy expensive cars, we used our money to buy expensive real estate.
We’ve owned this apartment building for nearly 12 years and know our tenants well. Do you think any of our tenants notice the cars we drive vs. the cars they drive?
Success really does leave clues, but
nobody seems to pay any attention.
And when most people actually see success clues, they won’t take any action or use what they see to their advantage. 🙁
If you lived in this apartment building, would you question this odd car situation? Would you notice that you were driving a more expensive car than the owners of the building?
As you might imagine, a few of these tenants who drive expensive cars have trouble paying their rent on time each month. They eventually do pay, but they incur late fees, which can become expensive.
Do they stop and think about any of this? It doesn’t seem like they consider this situation because they simply continue doing what they’re doing month after month.
So…. to help you…. avoid this same costly mistake…
I have a very important “thinking” assignment for you to complete this month.
Get a notepad and make a list of every person you know who is in the Position of F You. Think through your entire family. Think about your neighbors, your friends, your co-workers and any mentors you may have.
For anyone you identify in the Position of F You, try and answer these six questions about them:
- How did they make their money?
- What kind of home do they live in? Size, location, estimated market value, etc.
- What kind of cars do they drive?
- How do they invest their money?
- What is their approximate age?
- Do they they live according to certain principles?
Now, don’t do what everyone else will do and read this without doing this thinking exercise. Please BE different and DO this little study and see what you uncover.
I’ve done this little exercise and here’s what I’ve found:
I don’t know very many people in the Position of Fuck You. I’m guessing the total number is under eight. Every single person lives in an average size home in an average neighborhood. They’ve lived in this same home for a long time. Several decades.
They drive older economical cars: Toyota, Honda, etc. They tend to invest their money conservatively. This because they are in the Position of F You and don’t want to do anything to move them out of this position. Eighty percent are retirees over the age of 65. Only two people achieved the Position of F You at younger ages.
Three of the people I’ve identified are retired teachers. These people were friends of my mother, who was a retired teacher. My mother was also in the Position of F You when she passed away. She was a Badass.
Let’s take my Uncle as an example. I mentioned him in my Cashflownaire Plan book. He’s the one who paid his home off in his 30s and told me it was the best investment he ever made. I’ll guess at the answers to these questions for him.
- He made his money by starting a small manufacturing business. He spent his working years building this business. Today, he is retired. His oldest son runs the business. He goes in for a few hours each week just to get out of the house.
- He lives in the SAME home he did when I was a kid. I’m 47, which means he has lived in this home for at least 50 years. It’s a small 3-bedroom ranch. He lives about a mile away from me. I would estimate the value of this home at $130,000. He paid it off in his 30s – over 40 years ago. He hasn’t had a house payment for 40 years. Just think about that for a minute.
- He drives an average reliable car that gets good gas mileage.
- I don’t have a clue how he invests his money. My guess is he is very conservative. They do own a vacation home. It’s a cabin with 20-plus acres about two hours a way from where we live. He has owned it for a long time. They spend weekends there with family and grand kids boating, fishing and riding dirt bikes/ATVs. The area where this cabin home is located is not expensive. It’s actually less expensive than where he lives. When he tells stories about this place, it’s easy to see that he has extracted maximum joy from it (because he enjoys the home with family).
- My uncle is in his 70s, but has been in the Position of F You for over 40 years and he is one of the happiest guys I know.
- He definitely lives by a certain set of principles. One of his principles is to avoid debt. Another principle is Family Always Comes First. He meets his adult children every Thursday for lunch. He attends EVERY family function. His happiest days are when the grand kids spend weekends at the cabin.
The wealthiest person on my list is one of my mentors, Dan Kennedy. Over the years Dan has built a significant amount of wealth and many large income streams. He is also debt free and made his money through businesses he’s owned and his various investments.
Years ago, I had scheduled to spend my first day with him. I had pictured him living in a large country estate with a maid and private chef.
I was shocked when I pulled into his driveway. He lived in a $200,000 home. His home was around the size of my home. There was no maid. No private chef. He worked in his home office, which was located in the basement just like mine!
He did have landscapers who took care of the yard and snow removal. 🙂
And as you might imagine, Dan Kennedy lives according to certain principles. These principles have been honed and adjusted over his entire life through trial and error.
In fact, I have a large spiral-bound notebook he wrote on my desk that details the principles he lives by. Inside I found this:
“An individual needs a clear, defined personal philosophy. I have yet to study, meet and know or work with a highly successful person who is operating without a philosophy.
A philosophic system is an integrated view of existence. You have no choice about your need for such a system. Your only choice is whether you will define your philosophy by a conscience, rational, disciplined process of thought and deliberation or let your subconscious accumulate a junk heap – others’ ideas, false generalizations, slogans, wishes, doubts, fears, thrown together by chance, but integrated by your subconscious into a mongrel philosophy.
A man who is run by a randomly assembled philosophy does not know whether his programming is true or false, right or wrong, set to lead him to success or destruction. Whether it serves his goals or those of some evil, unknowable power.”
This is why WE have and live by our Cashflownaire Principles. These principles help guide us to correct decisions. These Principles also help us avoid costly mistakes!