Most of us are born into regular lives and grow up around ordinary people. From childhood, we are taught by our teachers, parents, and friends to be safe, trade our time for money, and avoid risk searching for comfort. We are taught not to lose and to avoid discomfort at any cost. Yet, it is these same behaviors that we have to unlearn to become highly successful and to live an extraordinary life. We need the character traits most to impact the world profoundly. We will rarely learn from the people around us. We need to reprogram and train ourselves to be exceptional.
For over fifteen years, I’ve had the opportunity to work as a manager, real estate investor, builder, and landlord of apartments, houses, short-term rentals, and parking lots. Over the years, I’ve had hundreds of tenants and thousands of applicants whom I’ve had to evaluate to decide if they would qualify to rent a unit. As part of the application process, people have to share their financial and personal lives to rent a unit. After someone is approved, you develop a working relationship in which they update you on their finances and life situations as things come up. For better or worse, this has helped me understand the financial behaviors of hundreds of people, giving me a unique opportunity to see how they earn money, spend it, and how their actions affect their lifestyles.
My analysis must be thorough, and I have to consider how this relationship will work out over time. I have to examine their finances, lifestyles and try to predict whether they’d be able to continue making their rent payments over the long term. If you’re wrong, you could be pushed into bankruptcy, pointless legal battles, and be exposed to enormous amounts of stress. It’s a very lucrative business, but you have to learn fast and work hard, or you’ll fail quickly.
The opportunity to study and understand people’s finances to this degree allows me to learn from their behavior, to develop financial skills that I was never taught in business school or that I never read about in books.
In Los Angeles, California, a typical scenario would be many millennials (people born in the early 1980s to the early 2000s) sharing a house and forming family units to survive. Most of these folks work two to three jobs and struggle to make ends meet because of the high cost of living and the outsourcing of high-paying jobs to other countries. This generation is faced with intense competition from all over the world as it is becoming a global workforce, and robots are starting to displace humans.
When I talk to my tenants, I rarely hear them speak of travel arrangements, investment plans, or even upcoming financial moves. Our school system’s lack of financial education has left people defenseless, facing a planet full of hungry and talented people. I see talented people of all ages, who ten years later is still working to survive. They live in uncertainty as they are one unexpected incident, such as being laid off or getting sick, away from losing everything. This generation is adapting to live on much less than previous generations. Millennials tend to appreciate experiences more than material goods, which is excellent.
However, I ask what if some of these folks had a blueprint showing them how to make it in these times. The outcome would be increased prosperity for all of us. We are fortunate enough to have a system in the USA like no other, with mechanisms for success built into it. We have many successful and wealthy people in the USA, and yes, part of it is due to hard work and talent, but most of their success is due to the business environment that has been developed here over time. For this reason, immigrants who come to the USA are four times more likely to succeed than citizens because they recognize the gold mine of a system we have here, and they learn to navigate it to success.
I was born in Los Angeles into a poor family, grew up in a neighborhood that was number one in gun-related deaths in the country for two years straight, saw gang fights at school, saw people get shot at house parties, and went to school in my youth with less than average academic offerings.
But none of that mattered because I grew up in the USA. So I started from the bottom and failed my way to success by working tenaciously, learning from my mistakes, and being a prodigious student. This book is a master plan on how ordinary people can train themselves to become extraordinary and be able to live the life they’ve always wanted to live. By following this plan, you will learn how others have trained themselves to be exceptional, building wealth along the way. It includes forty-three secrets that can be utilized to help create wealth faster.
Making money is like working out; it takes discipline. The more consistent you are with going to the gym, the bigger your muscles and the smaller your waistline. Prospectively, the more time you invest in learning about building wealth, the bigger your net worth and the larger your bank accounts.
Getting rich is a process of making consistently good decisions over a prolonged period; it’s not one big decision or a home run. Even home run hitters have to train to be able to get that baseball over the fence. If you try to rush, you’re more likely to make mistakes by taking shortcuts. You have to be methodical and follow a consistent plan of action.
Think about Warren Buffett, the most significant investor of all time, who preaches patience. He says in all his books that being patient allows you to think things through and make well-thought-out strategic decisions. We often hear stories about day trading or short-selling stocks and ending up in ruin when the market takes an unexpected turn. Both of these strategies can work for the person who has the experience and follows their plan, but it’s an act of desperation for most. It happened to me.
I once took a second loan on my house to buy a fantastic deal for a triplex property. As I was waiting for the purchase to go through, I got the idea that I should invest the money in the meantime and make some extra income off the large sum of money I had waiting in my accounts. So I transferred the money into my investment account and bought stock on margin to increase my earning potential. A margin is when the brokerage lends you double the amount you have in your account so you can invest it.
Well, I rushed through the sale on the website and pushed ‘Buy’ without checking off the limit order box that I was supposed to do, which means you’ll buy the stock at a specific price, in this case, it was $20, and only allow sales at/or below the cost you choose. The purchase amount was so large that, when I pushed to buy, it caused the price to spike to $70, which was my purchase price per share, and then it immediately dropped back down to the regular price of $20. Immediately, within one second, I saw the error I had made and tried to fix it, but it was too late, as computers are much faster than we are.
Because I rushed and did not check that box, I lost $175,000 in seven seconds! I had to cancel the property purchase, which would have made me several million; instead, I spent the next ten years saving everything I could to pay off that second loan on my house. That was a monthly reminder of how I screwed up and changed my fortunes forever.
The general assumption, and the idea propagated by social media, that millionaires live lavish lifestyles couldn’t be further from the truth. The truth about most of my millionaire, or even billionaire friends, is that they live humble lifestyles and have built their money up slowly over time, working jobs as a school teacher, a food safety inspector, or even as a janitor. Most millionaires are first-generation wealthy.
Living a brandish lifestyle has many setbacks, including making you a target for lawsuits, the pressure of having to keep up, squandering your life’s savings, and people asking you for loans. Many of my high-income earners are not wealthy because they fail to accumulate wealth and sometimes live lavish lifestyles beyond what they can afford. Often, they live to the limits of where their income and maxed-out credit cards will allow them.
One of my doctor friends, John, asked me how I could afford to travel because he was tired and wanted to take a break. He couldn’t figure out how to have enough money to afford the time off. John shared with me his financial situation in hopes that I might be able to give him some sage advice. He told me he made about three hundred thousand dollars a year but that his expenses were around four to four hundred and fifty thousand dollars.
John had over one million dollars in consumer debt and could only afford to take an occasional three-day weekend vacation to Las Vegas or Palm Springs. If he were to take more time off, he would lose his patients to other doctors, meaning a significant loss in income. When I asked why he owed so much, he explained that he was the only source of income as his wife didn’t work. Every year, his wife Patricia would lease both of them a new luxury car.
He and his wife lived in a five-bedroom house even though they only used one bedroom. They ate at the best restaurants, owned three boats, and his wife would spend a lot of time shopping for expensive clothes for both of them. By John and his wife wasting their time trying to look wealthy, they’ve ended up being insufficient.
Consequently, he has no savings, worked seven days a week, was stressed, and wasn’t living the life he wanted to be living. He was not happy and felt like he was living an empty life because he had no time to enjoy anything. All he could see was debt building up more and more. He wasn’t sure if he would ever be able to afford to retire.
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