Chapter 1
Welcome to the New Millennium, Where Instant Gratification Takes Too Long
Do you know what the best job in the world is? No, it's not playing center field for the New York Yankees. The best job in the world is managing your own big, fat bank account. Great hours, no pressure, and you can't get fired. How can you get such a job, you ask? The answer is to learn how to build wealth and by receiving a steady stream of what is called passive, residual, or unearned income. As the comedian Chris Rock once said, "Shaq is rich. The man who signs his check is wealthy."
Earned income is typically generated from your job or business. You have to work very hard to receive earned income. Unearned income, also known as passive or residual income, is the opposite. You will continue to receive unearned income, even if you don't work anymore. I generally refer to this type of income as "screw you" money. "Screw you" money is usually generated from owning a large asset base. By owning income-producing real estate, you can build a large asset base that will generate this type of income for your entire lifetime, as well as your children's lifetime. Many of our investors have received back their original investment and continue to receive cash distributions on a monthly basis.
It's been said that more money is made in real estate than in any other industry. Real estate is a great business to be in. It's prestigious, rewarding, and recession-proof. You can make money in both good or bad times. I wish I had a dollar for each time I heard a business owner complain about the rent they were paying. It's usually followed by the comment, "I should have bought the building."
How to Not Become Successful
As previously mentioned, there are few, if any, higher education institutions that offer a formal real estate education. What is available, however, is a marketplace polluted with worthless motivation preacher-teachers whose focus is on peddling their misleading books, tapes, and seminars.
Does the following sound familiar?
Our course is so easy that you can read it quickly and immediately make money and see instant results. Simply follow my step-by-step, time-tested, proven methods, programs, and strategies, spending only a few minutes a day, and you'll be on your way to becoming a millionaire and achieving financial independence. No more 9 to 5! Spend more time with your family and live the American dream!
Bullshit!
I mean if you want to talk ridiculous, let's talk ridiculous. What about "Brain surgery made easy! Learn in your spare time!" Can you imagine a college professor telling his students that his course was so easy that anybody can learn the material in two weeks?
What's happened to us? We've become incredibly impatient. Try turning on a three-year-old computer. Remember how fast it was when you first bought it? Now you'll be mumbling to yourself, "Damn it's slow," or "Come on already!" while you wait impatiently for it to finish processing. Imagine how slow a 10-year-old computer would seem if you used it today!
Nowadays, we want success right away with the least effort possible.
Et tu, Harvard?
I recently read a book written by a team of experts about how to become financially independent. These experts included attorneys, CPAs, and graduates from the Harvard Business School, as well as other professionals with decades of financial experience. As I was skimming through the pages, I could not believe what I was reading.
"Cut out the soda at lunch and save about $300 per year, besides water is free."
"Brew your own coffee and save another $300 per year."
"Cancel your magazine subscriptions. Your library card is free."
As I was reading this crap, I was laughing so hard that I probably missed the part that advised the reader to use both sides of the toilet paper to save another $300 per year. What about getting rid of your air-conditioning unit or turning off the pilot lights on the stove to save electricity? If these so-called experts really wanted to give us some good advice, they should have warned the reader not to waste their money buying their silly book (save another $35).
Let's assume you listened to the tapes and read the fancy manuals. Now you're dreaming about the millions you're going to make. Do you really have the audacity to believe that because you finished a two-week indoctrination course that you're ready to go and grab the fortune you believe is yours? Isn't that what they promised you? Sorry, but it doesn't work that way.
If you buy into this ridiculous philosophy, you're displaying a total disrespect for the process of learning real and worthwhile knowledge. Worst of all, you're fooling yourself. Sophisticated and advanced concepts and knowledge take years to master: no pain no gain!
Is your goal in life to become an average Joe? Do you want to get into a business that does not separate you from the rest of the pack? Not me! I want skills that are unattainable by the average Joe. Do you really want to conduct business armed with just buzzwords and other phrases and jargon used in the industry?
Learn Street Knowledge
Street knowledge is the kind the successful pros use. The so-called tricks of the trade. Street knowledge is more than common sense, and it can only be learned from personal experience. Develop your street smarts by learning to think outside the box. Be a sponge and absorb knowledge from as many sources as you can. Street knowledge is about what really goes on in the real world, and is just as important as textbook knowledge. You need both to succeed. When I watch the people going to work for corporate America, I see a group of white-collar robots who all look, think, and act the same.
The lessons of the street are a specialized curriculum of their own. Only a few insiders with many years of exposure and experience learn under this school's tutelage. The graduate's education has been learned through many painful and expensive real-life experiences. In order to become successful, you have to be beaten up and spend time in the trenches. This is how you learn what really goes on.
Here is an example of what I refer to as street knowledge:
Have you ever watched a trial on TV? I love the part when one of the lawyers goes on a tirade against the person testifying. Then the other lawyer stands up and yells, "I object!"
The judge yells, "Sustained!" then instructs the jury to "Please disregard those comments." Does the jury forget about the comments they heard? No chance! The damage is done.
Learn to Be a Student of the Game
Often in professional sports, a coach is credited with preparing their team for any situation that may occur. These are the teams that are always successful; the ones that win the championships and are fundamentally sound. Meanwhile, you'll hear the losing team say, "They knew exactly what we were going to do before we did it," or "Nothing worked," or "They were totally prepared for everything we tried." Learn to be a student of the game. Master the core fundamentals systematically, one step at a time.
When you are working for someone else, you are learning at their expense, not yours. The employer is paying for your downtime, your continuing education, and most importantly, any mistakes you make. You may get fired, but the employer stands to lose a lot more. They could lose a large account or business contact, have to give concessions to the client for your errors, or have to defend against a lawsuit. When you're in your own business, you are learning at your own expense, or if you have investors, at their expense as well. If anything goes wrong, it's you and the investors who have to foot the bill.
The World's Largest Book: The Book of Excuses
Assuming you're normal (if such a thing exists), you will have experienced the fear of change or the unknown. Everybody is afraid. It's human nature. Will not having answers to the following fears (or are they excuses) motivate you or completely discourage you?
"I wouldn't know what to do if."
Nobody rents the units, something breaks, the building catches on fire, the tenants don't pay their rent, someone dies in an apartment, a bank won't give me a mortgage, my expenses go up and rents don't.
"I don't want..."
The headaches, tenants calling me at home or at work, to get sued, to lose my money.
"What if..."
Real estate taxes go up, the real estate market goes down, I can't sell the property, interest rates go up?
All of the above concerns can be reclassified into one large category: fear of the unknown. Successful real estate professionals know exactly what to do in all of these instances, without even breaking a sweat. This is where you need to be!
Motivation
In order to be successful in any business, you have to be motivated. Period.end of sentence. It's a given. Motivation is one of the most important building blocks in a healthy learning environment.
However, motivation comes to a complete halt once an element of fear enters the picture. Even the smallest subliminal fear can cause damage to your learning process. If the fear isn't readily apparent, then you must make it surface...
