“This article will make you hundreds of thousands of dollars, so read this.”
- Signed by your Future Self.
First off - let’s just eliminate that this is a bias-piece. It’s not. I will most certainly speak about how real estate investing is marvellous and how much it’s done for me, personally. Though, just because I am also a real estate broker, it doesn’t change my opinion (or the fact) that wealth building through real estate simply rocks. I am so enamoured and obsessed with real estate investing, that I’ve turned it into my job. Again, no bias here - I work in real estate BECAUSE I love the investing angle of real estate. Working in real estate has not given me rose-coloured lenses from which to view investments through.
Now that I’ve gotten that off my chest, let’s get into a rad discussion on investing, shall we? :) I’d like to share a lot of what I talk about these days, with ladies and gentlemen just like you. I have taken meeting request after meeting request - and happily, I should let you know - from wonderful people that are simply dissatisfied with their past investment choices. We all kinda thought we’d be “there” by now, and yet many of us are still living paycheque to paycheque. Am I right? It’s because we’re living that way that we feel that we’re not in control. If someone - HEAVEN FORBID!! - decides to take away our paycheque (Google: downsizing/outsourcing/business realignment/focus on core business/etc. for some examples of how that could happen), where would that leave you? I’ll help you with that answer -> you’re probably approaching panic mode when you realize you can’t pay your own mortgage or daycare fees, let alone keeping up with the Joneses.
So we invest. With each paycheque, we’re prudent and knowledgeable and intentional and savvy, we put aside some of our earnings for a rainy day. We invest. We meet with a financial advisor (or not) and we set aside some money. We really, really believe that in 10 years, or 20 years, or by retirement - we’re going to be swimming in a sea of our own money. It’ll be glorious.
10 years later, you look at your balances in these investment accounts and think: well, I’m still young. I was told that the market goes up and goes down. It’s normal. It’s fine. We didn’t make a lot of money these 10 years, but we gained some knowledge. We’re wiser. We’re better. At year 20, you’ll probably not be too far off the pace from the first 10 years - if history is any indicator. You’re certainly in better shape. You lived through some ups and downs, again. It’s still ok. Though you realize now that you aren’t really going to be set up for the next 20 years if you stopped earning and stopped contributing. Uh-oh. You’ve been putting money into this investment account for a while. You’ve been feeding IT. IT has not been feeding you. When you’re finally at the point where you need money from a source outside of your job, this will get you that big lump sum of money. Though when you sell your investment, it’s now gone. It won’t make you any more money.
In this world, if we don’t continue to feed the investment, the investment doesn’t work. We’ll spend most of our adult life - our earning years - continuing to pour money into these investments, with the expectation that one day we can stop, and that one day those investments will take care of us the way that we took care of them. But when we stop putting money into those investments, we usually have to take money out of those same investments. And they’ll devalue from that point on, forever. Until all the money is gone. We’ll just have to hope that this happens after we die, of course.
You see, I feel like this is not what an investment should look like. And so do many of my real estate investor peers.
I want to shift gears and talk about a smarter kind of investment. One that is nothing like the horror movie I described above. I have no idea why this is a secret, but real estate is the greatest investment type. Deep down, I think we all kind of know this, though we never talk about it. I’m so confused that more people aren’t engaged in this world. Commercial after commercial talks about financial planners and financial instruments. And yet, the big bucks are absolutely in real estate investing for regular folks like us. And, no, they are not out of our reach.
Want to learn why real estate investing rocks? Then, let’s proceed to part 2 of this article.