This week I’ve been digging through some old newsletters I wrote when I owned my real estate brokerage. Each month, I published an extensive newsletter highlighting investments I was making, lessons I had learned, and insights from books I read. I’ve actually been kicking around the idea of starting a similar newsletter now. I came across a newsletter I published in September of 2008 about Andrew Carnegie. My all time favorite biography is on the life of Carnegie. I’ve written about him several times. I think the reason why his life was so educational for me is because he was the first wealthy person I studied who designed an awesome lifestyle. Here’s the article I wrote 8 years ago:
I’m writing this month’s newsletter from a rented a lakefront home in North Carolina. I’m staying in this home for three weeks. I have rented a boat and two jet skis, too! My goal is to test Andrew Carnegie’s work plan for three weeks. We have family and friends scheduled to stay with us. I’m hoping that this trip becomes an annual outing for our family.
I do plan to work for a few hours each morning. I have reserved the remainder of each day for fun. I probably will learn a lot on this little vacation because I’ve never owned a boat, nor am I a jet ski champion. To be completely honest, I’m a little nervous about slamming the boat into a dock. Do I need insurance? I am taking fishing poles that I inherited from my grandfather. Hopefully, I’ll spend some time fishing, learn to boat and relax into lake living. Oh, and we are bringing our dog, too. I hope she gets her sea legs.
Several years ago, I was visiting my wife’s family for the Fourth of July. A close friend of my father-in-law said we could watch fireworks with him. We followed along and ended up at a beautiful home in a town called Sewickley Heights. This is a small, wealthy community on the north side of Pittsburgh, Pa. This home was located next to the Country Club where the fireworks were going to be displayed.
As we set up our chairs and blankets for the fireworks, I asked the friend about the house. I asked, “Whose house is this?” I was hoping he knew the family!! He said that he does some work for the family and that they were away for the summer. As we watched the fireworks, the lesson swirled in my head. Beautiful home, wealthy area – away for the summer. Huh? How do you get wealthy if
you’re away for the summer not working?
The next time this same lesson was delivered to me was when I read Andrew Carnegie’s biography. I learned that Andrew would rent a large home each summer. He would
rent the home for the entire summer. One of the large homes he rented was a castle called “Skibo” in Scotland.
He would take his entire family to spend the summer at the rented home. The homes he rented were always large enough to entertain. Friends and business associates were always invited to stay, too. Andrew would work each morning for three hours. He would then have lunch with everyone and spend the afternoons in activity. He golfed, drove horses and more. Then everyone would have dinner and they would talk, party and have fun in the evenings. Andrew always had staff at these summer homes to handle all of the chores of daily life, including cleaning and meal preparation.
This sounded fantastic to me. We don’t have staff for our trip, but we might go out to eat a few times! Andrew ended up buying Skibo castle for his family. I learned many valuable lessons from what I just shared with you. Here they are:
1. Andrew put family, friends and fun as a major priority in his life. His time was allocated more to fun than it was to work. He was still able to become one of the richest men in the world while allocating the majority of his time to fun. This was amazing to me. I incorrectly assumed that you must work long hours to become wealthy. Andrew proved that this was a myth. Long hours do not equal large incomes or significant wealth. In fact, you don’t have to sacrifice your life to build wealth. You have to spend your time on the right activities in order to generate a large income. This is easier said than done. Most of us constantly work on urgent, unimportant activities and rarely work on non-urgent, important activities. This was extremely important, but not urgent.
We ALL feel like we have to do more in order to have more. YOU don’t have to do more. YOU HAVE TO DO THE RIGHT ACTIVITIES. For example, increasing your hours at work from 40 hours to 60 hours will not make you wealthy. Cutting your hours down to 20 hours and than investing 20 hours into your own business or your real estate investing will. See the difference?
2. Each year, Andrew rented the summer home. Above, I mentioned that he ultimately purchased Skibo castle. This purchase didn’t happen until late in Andrew’s life. He rented different mansions prior to Skibo. Then he rented Skibo for a few years before he bought it. Andrew could obviously have afforded to purchase a summer home. He didn’t. He chose to rent. I don’t know exactly why he chose to rent, but I have two guesses. One guess is that he wanted flexibility. By renting, he could freely choose other locations in future years. Another guess is that he thought it was a bad investment. By renting, he passed all of the maintenance costs of the large homes on to the owners. He didn’t have any headaches or maintenance problems to deal with during his summer stay.
For some reason, we all now want to own second homes. I’m guilty of this myself. Why? Renting is sometimes better than buying, and I believe this to be one of the ways you
can live a millionaire’s lifestyle without having a million dollars. If you like the place you’re renting, simply rent it again next year. If not, go somewhere else. In fact, your housing needs will probably change over time. You’ll either need more space or less. By renting, you can find the perfect space for your needs. Yes, I know renting a fully furnished home is expensive.
It’s more expensive than owning for the time you’re staying at the property. However, throughout the year, it’s significantly less expensive than owning. The home we are renting is valued at $1,300,000. The repairs and maintenance on this home, including the floating dock, would have to be $30,000 to $40,000 a year. I’m saving a substantial amount of money by renting.
3. Andrew engineered life to be exactly what he wanted it to be. He created his own environment and sucked as much out of life as he could. He brought others along for the ride. He was extremely generous to friends and family. He was a fun guy and people thoroughly enjoyed being around him. Andrew lived life well. My wife’s family goes on the same vacation year after year. This year, we were able to get them to stay with us on the lake. At first, they were hesitant and wanted to know more before committing. Now, they seem to be really excited. The memories from this trip should be priceless. This wouldn’t have happened if I didn’t take the initiative to put it all together. I’m engineering my life. I’m not waiting for anyone or anything. You shouldn’t either.
4. In the 3 hours a day that Andrew worked, he accomplished more than the average person would accomplish in a week. Was Andrew Carnegie in his office managing his business each day? No. Hell, he was in another country for months at a time without phone, fax and e-mail. He hired others to run the business and carry out his plan. He directed his staff and managed his businesses by letter sent through the mail. Stop and think about this for a little bit because many real estate investors would read this and say, “Well, I can’t do this with my properties. I have to be here to manage them and handle problems.” Andrew ran large steel manufacturing plants with hundreds of employees. Wouldn’t he need to be on site every day to handle all of the problems and issues? I guess not.
Now, don’t get me wrong. I’m not at all suggesting that I’m Andrew Carnegie. However, I’m trying to learn from him. His biography really inspired me. I started to think about how I could do the same thing in my life. If he could spend the majority of his summers with family and friends in a rented mansion, I could too. So can you. What I began to realize is that you don’t need millions of dollars to live like a millionaire. I don’t need to own the lake front home to experience lakefront living. I don’t need to own the boat to enjoy the lake and catch big fish. I don’t need to own the jet skis to have fun jumping waves with my friends. I can easily rent the home, boat and jet skis and have the exact same experiences in my life. In other words, I can live just like Andrew Carnegie. So can you!
You can take this lesson as far as you want in your life. For example, I could hire a personal chef to come to our rented home once each week. We could have the personal chef prepare four or five meals, in advance. From my research, a good personal chef costs around $30 per hour. I can easily find one on Craigslist.com. Imagine spending the day on the lake and coming home to a fantastic meal prepared by your own personal chef? Talk about living like Carnegie!
I would have to think that most people who read Andrew Carnegie’s biography were amazed at how he lived his life. Most readers probably didn’t even ask themselves if they could do something similar in their own lives. The thought didn’t even cross their mind. Sadly, they missed the boat. (Joke..) Others probably read the biography and had the flickering of thought “Wouldn’t it be great to live like Andrew?” Then reality hit them and they quickly dismissed the idea, thinking “There is no way I could rent a home for the entire summer.” Maybe, you might be thinking the same thing yourself. A small percentage of people read Andrew’s biography and had an entirely different response. Their response was…
“How Can I Live Like Andrew Carnegie Lived?”
Do you notice the change in your thinking when you ask yourself this question? To be completely honest, the real fun is in the answers you come up with. As you answer the question, you’re actually designing your own life – a life lived well. In fact, figuring out your own answer is a puzzle. There are several different puzzle pieces you have to solve.
Here was my puzzle …
How can I afford to rent a lakefront home, boat and jet skis for three weeks in peak season?
I could obviously pay for all of this on a credit card. This doesn’t work for me. It goes against my financial goals. Therefore, this wasn’t an option for me. I could write a check from my emergency fund. I wasn’t very comfortable with this idea, either. I’m pretty conservative. I wanted to be able afford this trip without having to redirect money from my financial goals. I decided to create the money for the trip by creating a little side business and using the income generated to cover the cost of my entire trip.
Now, I do realize that renting a lakefront home might not be exciting to you. I also realize that you might not want to live in a mansion for the summer like Carnegie did. This really isn’t the point. The point is to engineer a life well-lived. This is what Andrew did. This is what we should do, too. What would you love to do in your life? Where would you love to go? What do you want to learn? Don’t dismiss your dreams as impossible. I can promise you that they are possible. You have to start asking yourself challenging questions, like the one I asked myself above!
Looking back to what I wrote in 2008, I can easily see how powerful the lessons I learned from Carnegie have been in my life. We still vacation each summer on the same lake and have dozens of incredible memories. We’ve enjoyed many weeks with friends and family. Since 2008 I’ve completely changed how I think about money, work and fulfillment. I’m no longer worried about building an empire and continue to try and model Carnegie’s lifestyle. All of this from of ONE book. My investment into his biography ranks at the top of the list for the best investment’s I’ve made in my life!