Systems
I have a few things that were floating around in my mind. One of them is systems. As we’re getting into the New Year’s resolutions and being investors, I’m reading some articles about how people can’t buy because of this and that and they already have five or six houses. Plus I’m going through setting up systems and making sure that I’m taking care of my business in the back office and everything that needs to happen.
We as sales people are excited. We are people that see our future much brighter and in a different light. We blow and blow and blow and we buy and buy and buy and then all of a sudden we are like, wait a minute, it could have been easier if I could push a button and get a report like through QuickBooks or something.
Talking about systems, but then also Jeff Smith sent an article to me “Saving and Sacrificing without Purpose: Why Do I Want to be Rich?” And it’s an article on a blog, which I think is written with good intent. It’s by Frugal Confessions and it’s on Houstonchron.com.
And it kind of goes along with an article on the web site that was written by Brian Lee called “How 15 Houses Can Retire You Faster Than a Million Dollars in a 401(k).” So they’re kind of parallel articles with different perspectives and views.
And it’s pretty interesting how one is like when you’re going down the road and you’re walking down this path and you’re trying to figure out what you’re going to do with your life, which way you’re going to go, and you really have two choices—and you can work both, straddle the path—but it’s a different mindset.
It’s almost like the negative mindset and the positive mindset, but it’s not. But both are very responsible or trying to be very responsible and taking care of themselves and doing what’s right and not expecting somebody else to take care of them with handouts and things like that.
Purpose
I’m going to start with the Frugal Confessions, the blog article. It says, “With my money habits—soon to be out of debt except mortgage, very frugal, saving consistently each month, increasing my income—I am headed on the road to becoming wealthy. I am sacrificing a lot in my present life in order to continue building this cash and asset reserve, such as limiting my spending money each month to cover groceries, gas, and a little bit of fun, buying used for almost everything (furniture, cars, books), carpooling, etc. But why do I want to be rich?
“Becoming rich—admittedly still a life goal of mine—is some shapeless, amoeba-like idea acting like a puppeteer to all of my financial decisions, but with no real purpose. In other words, I am sacrificing a lot right now, for no particular reason.
“When I came to this realization, I began asking myself questions. What is my definition of ‘rich’? Why do I want to become rich? What do I think my life and lifestyle will be like if I become rich?
“After thinking on these questions for quite a while, here’s what I came up with. Being rich to me is still hitting that $1 million mark, but I admit $300,000 looks good, $500,000 looks good (heck right now $100,000 looks good!). I’m 27 and I’m sacrificing a lot. Understanding what motivates you is an important step to any goal you have.
“In this case analyzing my own motivation has brought me more purpose to the seemingly repetitive decision and sacrifice that I make each day and to the money I put in my accounts each month. It is why I automatically deposit money into my IRA retirement account, why I diligently pay off my credit cards.”
Control
And it goes on. And she’s got the right idea, and I think everybody should be responsible with their money—be out of debt, take care of themselves—but what I see here is she’s putting her money in a 401(k) or an IRA. You don’t have control of your IRA. Your IRA is not your money. You cannot go and get it out tomorrow and spend it however you want. There’s a lot of misconceptions with that.
So it’s great, she’s taking that load, but she’s also sacrificing so much on the front end. And what does rich mean? How does it feel, and what does it mean? Is it a million dollars and you live off your nest egg and hope you die before your nest egg goes?
Then you go and you read Brian Lee’s article How 15 Houses Can Retire You Faster Than a Million in a 401(k). Let’s not go to Brian Lee’s article though because I have better than that. I have two guests in the studio with me. I have Denise and Mark Lackey. They are members of Lifestyles. I remember when they came in and they brought their son Marcus who’s 18. They are leading by example, teaching him a lot.
NATALIE: Thanks for being here, guys.
DENISE: Thanks for having us.
MARK: Thanks for having us.
NATALIE: They didn’t plan on being on the radio. They didn’t know. They walked in to meet with one of the Realtors to write some more offers or buy something, and I just assumed they wanted to do the radio.
DENISE: Yes, she did.
NATALIE: I asked. And at Lifestyles we like to share our stories. So tell us a little bit about yourself.
DENISE: Well, you know, I was sitting here listening to you with the way that you opened and what you were covering and stuff, and what was rolling through my head was so many things that’s happened in our life.
And one of the things right off the top was I have an uncle that passed away two and a half years ago and he had done that. He had sacrificed, and he had tried to build up a nest egg to retire. And I remember him telling my dad he thought he was going to outlive it. He thought he was going to outlive his retirement fund. He thought, “What if the money runs out first?”
And as a kid that’s the way we’ve all been taught—what you just read and what we’re seeing. And what’s funny is that we know a lot of people that have bought houses in the past and been real estate investors. We didn’t know anything about it, but we always knew they had money. Truly. And whether they did it quote unquote the right way or the wrong way, the fact that they were creating passive income is the bottom line there.
So I was just listening to that, and I know that Mark and I, we’ve been married 25 years. And 25 of those 25 years he’s been saying, “We need to buy some rent houses. We need to buy some rent houses.” And I flat could not even think about it. I couldn’t ‘cause we’re so busy.
And I think that’s what happens—you get in that loop of there’s so much to do, the kids are this age, and we’re going through it and trying to raise them the right way and raise them and teach them self control and saving and things like that, being responsible for their money and things. But we were not looking at passive income. But we are now, thankfully.
NATALIE: It’s a different life, isn’t it?
DENISE: Absolutely.
