March 13, 2015 in Investing In Real Estate
But you’re scared; really scared.
I have a secret to tell you. Everybody was scared. Leaving behind a steady paycheck even if the job makes you crazy is hard to do.
Does this Sound Like You?
You have a job and it might even be a well-paying job, but you dread getting up every day. Each week you are only waiting for one thing; Friday at 5:00 so you can head out to “enjoy the weekend; to enjoy life”.
You also have a “side hustle” real estate business that you really like doing and it brings in some much needed extra cash. But let’s face it; you are working too darned hard.
After working 5 days a week, it’s hard to have enough time and energy for your side hustle not to mention time for your friends and family. That’s usually when the thought comes creeping into your mind, and you seriously start thinking about the day you can quit your job and be a full time real estate investor.
It doesn’t help much that in the evening as you are surfing Facebook (instead of working on your marketing) you see all those big checks being posted on the site by other investors. Folks are kicked back on the beach with a tall drink in their hand showing you just how easy life is for them now that they dumped that dreaded day job.
Is it really that easy? Not on your life! Real estate is just like any other business; it takes a plan and a lot of hard work. Anyone that tells you that you can just sit back, push a button and have a successful business has had too many tall drinks.
The Telltale Signs
Telltale Sign #1: You know that you are getting serious about making a change when you sit down and do the math; not once, but every now and then. The big question is always, “How much money do I need to make to quit my job”? Here is a tip for you; it may be a lot less than you think.
Telltale sign #2: You see your side hustle business getting some traction. It’s starting to grow. People are beginning to know you because of your business. You are really beginning to think you can do this.
But what if you’re not quite getting “the love” or the validation from other folks that you want just yet? There are ways to help that process along.
Find ways to put your business in front of people.
- Volunteer for a project like Habitat for Humanity and publish an article saying you helped out on this project, or write an article for your website about this experience. (Yes you need a website for your side hustle). If you are lucky enough to have a TV crew there see if you can get in front of the camera.
- Look for ways to get free PR. HARO or “Help a Reporter Out” is a good place to start and it’s free.
- Put up a business page on Facebook (also free and easy) and begin to post little things about your company. Give a small donation to the local youth league and tell everyone about it. You don’t have to invest a lot of money to get great results.
- Volunteer to work the door and sign folks in at your local REIA. Everyone that comes in the door will get an opportunity to meet you.
There are a million ways to put yourself out there even for self-proclaimed introverts.
Getting Down to Business; Doing the Math
You notice that I didn’t say figure out “if you can quit your job”. 90% of this battle will be won in your mind when you decide to quit. To decide is to remove any other possibility and just go for it. This will involve a new way of thinking on the part of most people.
Now before any of you CPA/accountant types hunt me down and correct my math, let me say that I am just doing a “what if” scenario based on some averages. In today’s example we will say that your salary is $100,000 a year, and after taxes you clear $60,000. You contribute to your company’s 401k program, you also save some money each month and these amounts come to another $10,000. That brings your net down to $50,000.
In this example, we will say that you don’t really live an extravagant life but you do enjoy some nice extras. This is where you’re going to need to make some choices. After looking at what you spent the last 12 months, you determine that there is indeed some fat you can cut out of the budget to make your dream come true. (I never said this would be painless)
- No vacations for at least a year.
- Slash that shopping habit for new clothes to the bare minimum.
- Are you spending too much for gifts every year? Most people do.
- Did you really need to upgrade your existing 60 inch TV last Christmas? The key word here is “need”.
- Eating out 3 times a week? Gone. Treat yourself to a “deal meal” every few weeks.
- $20 at the car wash every week? Nada. Wash your own car.
- Give up your Starbucks addiction for a year and pocket that money.
- Want a new riding lawn mower? Not in the new budget. Keep pushing.
We have probably cut at least $15,000 out of your existing budget. Now look at the new number – $35,000. You don’t really need to replace a salary of $100,000.
On the plus side, a lot of your monthly personal expenses will legitimately slide over to the “business side of your tax return”. Those will be things like –
- Your cell phone which now will be used as your business phone.
- If your days are spent looking at property, maybe as much as 80% of all of your auto expenses will now be tax deductible.
- That high speed internet you use for looking up properties online? Business expense.
- The room in your home that is used as your business office? Tax deductible.
- What about the real estate seminar you want to go to? Yes that too (including the travel expenses).
- There are more things that could be added to the list, but you get the idea. These types of expenses will come out of your gross receipts in your business rather than your take home pay.
If you really want this; if you are ready to quit your day job, I challenge you to do this exercise this weekend.
It's a Tweetable
Is Your Spouse or Partner Bringing Home Some Income?
If you can answer yes to this question and they are onboard with your decision, you have just removed some pretty huge obstacles You still want to be married at the end of this journey so figure out all the details jointly right from the beginning. Having a partner or a spouse onboard can be the biggest asset of all.
The Final Hurdle; the Fear
You know, this is not just about the money. It’s about a whole bunch of other things.
Here are 3 things that are on the top of that list:
- First would be the fear of going it alone. You need a support group so go find one. I can guarantee you that one isn’t going to knock on your door. Your local REIA is a great place to start. You can also find a “Meetup” in your area where you can network with other entrepreneurs. (Google “Meetup”). These folks don’t really need to be real estate investors just other business owners.
- When faced with the realization that they don’t know everything, this keeps a lot of people from taking those next steps. You will never know everything. But the things you don’t know, someone else will know. You just need to get good at finding the answers and the people that can help you fill in the gaps.
- Fearing those unforeseen challenges that you know will inevitably crop up can stop you in your tracks. When you decide to quit your job and go full time in your business, I can guarantee you that there will be challenges. Just take them one by one as they come up. This is one time you don’t want to look down the road and try to “anticipate” all the things that could happen. After all, most of the things we worry about never come to pass.
The fact that you have made it to the bottom of this article tells me that you are ready to take the next steps toward living your dream.
So go make it happen. Decide; really decide that you intend to live the life of your dreams.
Let me know what your “next steps” are.
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