Download Show | “A friendly reminder: only when you have the right map does hard work, dedication, and commitment matter… only then. Because if you’ve done anything for five years straight… 40, 50, 60 hours a week, and it has not gotten you in the financial position you want to be in; in my opinion you should have accumulated enough passive income that it meets and exceeds your bills. If you have not achieved that after working 40, 50, 60 hours a week after 5 years straight… it’s time to do something different.
We’re teaching people how to build the golden goose.
The Definition of a Lie
If you look at “lie” in the dictionary, it’s any attempt to deceive. Smoke and mirrors… half truths… any attempts to deceive are a lie. But out there are so many attempts to deceive. One of the most fun analogies is that of the bowling pin… for what’s going on in america right now.
Americans are Like Bowling Pins
Here’s the way that I see it: Americans are like the bowling pin… and the government, the SEC, the corporations… they’re like the bowling ball. What happens is: we stand up and we’ve got our stocks and we’ve got our bonds, and our mutual funds… and we’re feelin’ pretty good. Then the economy starts to waver; in other words: you hear somebody picking up the bowling ball at the other end of the lane… and you get a little nervous, but you don’t know anything else to do… so you just kind of stand there.
Then all of a sudden, you hear a big thud… ‘man something’s headed toward me… oh, we’ll be fine… don’t worry about… stay the course’ and then BOOM that bowling ball hits and knocks those pins for a loop. It’s a strike! What would the strike be called?: the crash of the stock market.
The bowling pins are knocked over. Some of those bowling pins are going: ‘man this stinks! I don’t want to get hit by that bowling ball again; I want outta here!’
No Choice
But you know what? The poor bowling pin doesn’t really have a choice… because they don’t know anything else. All they know that the machine is going to pick them up and put them back in place… and then they just wait.
How about this: the average American gets knocked down. Their stock broker is telling them to stay the course. Their wrong thinking that sounds logical is: ‘man if I never sell, I never actually lose the money’ …how many of you have thought that? Everybody has.
They wait, and sure enough… there’s a few changes in government, there’s a few changes in the corporations. Pretty soon, all those pins are standing back up. Then we have a couple of good years… 90% of the pins are standing back up. We have 2 or 3 good years in a row… and all the pins are standing back up.. and they’re waiting for what? The bowling ball to come down and smash them again.
Are you going to keep doing the same thing and expect different results?
Is that what you’re doing? And be honest with yourself because remember: this can be painful.. but it is of the utmost importance that you answer this honestly and truthfully: are you going to do the same thing in the next 5 to 7 years that you did in the last 5 to 7 years? Are you just going to work a job… are you just going to be dependent on a job, a corporation, or your self employment? Are you going to be dependent on the stock market, mutual funds, 401k, speculations that people lie to you and tell you are investments?
I suggest that if you are comfortable with that, then be happy getting slaughtered every 7 or 8 years. Now, some people are saying: ‘Steve, that’s a really sarcastic, mean thing to say’; …not at all… not at all because it’s the facts. The stock market has crashed 13 times… every 7 or so years. It’s not if it’s going to crash again, it’s when.
Here’s what I consider harsh: for you to sit with your family and honestly look across the dinner table and say ‘I’m doing everything I can to build wealth for ourself and financial security for our family…. knowing what you know.
You Can’t Un-hear it
I love that joke from Futurama: ‘You’ve heard it… you can’t unhear it.’ You know now: the stock market crashes every 7 or so years. It’s not if it’s going to crash again, it’s when. Are you going to be the bowling pin? Are you going to put your family just standing right up in front of that bowling ball again? …or are you going to do something different?
Hopefully, if you care… you’re thinking ‘man I gotta do something different’. If you’re humble, you’re thinking ‘Steve, I don’t know what to do different’ …
Here’s The New Map
Here’s the show… Here’s the reading list… You have no excuse, for the next 5 to 7 years, to do something different. People, the map is there for you. Ben Franklin left it for you, in his autobiography. Andrew Carnegie, Ford, Edison… left their maps for you in ‘Think and Grow Rich’ by Napoleon Hill. George Classen gave you the whole entire formula in a book you can read in an hour and a half, in ‘The Richest Man in Babylon’.
So you can not tell yourself or your family that you do not know how to get out of that lane, that you don’t know how to got out from in front of that bowling ball… Unless you just don’t care enough to read few books and attend a few workshops.
Where Will You Be in 5 Years?
Remember: Who you are 5 years from now will be a direct result of the books you’ve read and the people you’ve met. One way to meet people is to give me a call. As I say all this and you’re frustrated with it, and you’re going ‘good lord that’s exactly what I am… I’m that bowling pin just sitting there, getting knocked down, sitting back up… don’t get hit for awhile, so I feel pretty good… so I don’t bother reading or making any changes’.
But sure enough, every 7 or so years… SHA BAAM! Here comes that bowling ball again.
Government Won’t Do It For You
We keep expecting the government to change, we keep expecting corporations to change, but meanwhile we’re doing nothing. Get up, go to work… hand your money to the stock market… That’s nothing. Sorry, because we know the business models left for us by Ben Franklin, Carnegie, Classen, Warren Buffet, Peter Lynch… none of them have that business model.
9 out of 10 people are retiring at or below poverty income levels. 9 out of 10!
We know that model doesn’t work. How do you get that golden goose built? We use real estate. We use single family homes, groups of single family homes, small apartments, large apartment complexes… and what we do is we build passive income streams.
The real estate is the golden goose. The cashflow is the egg.
They Teach You To Die Before You Run Out Of Money
But here’s the other lie that came out the other day, but let’s get it out in detail. They tell you that your goal is to save up enough money so when you retire… I still can’t believe this… that when you retire, you die before you run out of money!
Man talk about a spin! When you retire, you hope you die before you run out of money. Do you see that spin? …and it’s bogus. Who wants to live that way? I hope you don’t.
Cash… flow.
Focus on The Goose
Build the goose. Nurture the goose, love the goose, pet the goose, hug the goose, take the goose to the doctor. Best product, best price… keep your properties in perfect shape, keep them leased, keep good management systems in place, understand how they work, that they are a tool to help and serve other people.
Best product, best price… put the best tenants in… all the things that go into running a business properly… and never, ever touch the goose. Never touch the principle. We talked about Stephen Covey’s comment, have you ever started hacking away at the goose? …your savings? your investments? …to live a little higher on the hog?
Doesn’t work, does it? You eventually kill the goose.
The truth is, i think you need to keep it in a more realistic concept: that if you hack away at the goose, it’s dead… and take it that seriously. Once you get an apartment complex, a single family home, a group of single family houses… don’t ever touch that equity.
Appreciation, equity buildup… don’t ever touch any of it, except to go buy a bigger income stream.
Rates of Return in the Hundreds of Percent
Let’s talk about the five ways every dollar you put into real estate earns you money. The first thing I need to do is address this issue. By the time I’m done with this, you’re going to see rates of return in the hundreds of percent.
Woa… how many alarms just went off?
Every middle class person with a middle class belief just said, ‘it sounds too good to be true… and if it sounds too good to be true… it must be too good to be true. Nobody makes those rates of return.’
Become A Venture Capitalist
Let’s review. Let’s go back to Hertz. Let’s go back to a bunch of venture capitalists pulling together several billion dollars. They go in and they buy Hertz from Ford. They market it, package it, and sell it to the speculators… the people at the bottom… the guys who buy, guess what: stocks, bonds, mutual funds.
The guys who put that deal together made a 300% return. What did you guys at the bottom make? …7%
But I thought 300%, that sounds too good to be true? Well, now that we know that it’s not too good to be true, that people are out there making 300% rates of return, then the next lie comes in… that those are big shots. Man you got to be in the right position.
Those guys were lead investors, and they were venture capitalists. Meaning they thought up the deal, put the deal together, and then the venture capitalists put up the money to get it done.
‘I’m no lead investor and I’m no venture capitalist’ …wrong again. Do you realize that the moment you go out and buy yourself one little single family rental property, you are now a lead investor and venture capitalist? That’s why you, your family is going to start making rates of return in the hundreds of percent.”
Listen to the radio show for the more
Caller Questions
Benjamin in Pasedena: “Using a hard money lender, how long does it take to close on your first deal?” “What happens if someone cooks your goose?”
Rose in Sugarland: -bought a 1915 home with her brother with the intention of fixing it up and renting it. A year later, the contractor is still not finished.
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