Breaking Down the Mentality of the Average Joe

“…I’m dealing with a series of emails from a man and his wife, whose names will not be used. But it’s an example of a debilitating problem, if you will. As you listen to these emails, and I want to be extremely sensitive to this individual, and to every one of you.

As you listen to this, don’t listen to it as if… we’ll use the fictitious name “John.” Don’t listen to this as if you’re totally different from him. Listen to it as if hidden between the lines of this particular individual’s sentences, comments; is an underlying mentality… and it’s exposed in many different areas.

Keep an open mind, and try to place yourself in John’s shoes…”


  1. Hi Steve,

    My wife and I we make around 250k per year based on W2 basis, do you think I need to continue my career for more years or just I stop working and be a real-state investor?

    What is your suggestion?


  2. What is your passion is the question to ask first. Do you love what you do? Do you have another dream job in mind? Would you love being an investor in real estate?

    Congratulations on your success as an employee and making that type of money. Well done.

    I suggest you keep your job until your passive income from your real estate meets and exceeds your bills. That is unless your job is killing you. You know what I mean. At that point you are now financially independent.

    You then ask: Do I want to stay at this job, follow a dream or go full time into real estate? Most people are surprised at their answer at this point.

    Don’t ever get the idea that when you have enough passive income you will just want to retire under a palm tree with a stout margarita. You will want to known why you are here and how you can serve others.

    Go learn the single and multifamily business models at one of our offices or somewhere else but start today. Then start building your real estate business and get free of the need for a job.

  3. Thanks Stephen for your comments, I share most of your thoughs about stay in my job as long is fun and good money is on the table.

    The only discrepancy I have is no such “palm tree” as a real state investor, why:

    1.- Once you jump, you have to stay in top of your business (real state). Of course is not going to be 8hrs per day, but you have to.

    2.- You need to qualify as a real state professional (500 working hours per year) if you want the big write off in your taxes. Now you have to stay 500 hours = aprox 3 months of a full time 8 hrs job working in real state.

    3.- You have to trigger tax depreciation yearly to reduce income taxes so you will most likely to end with a 1031 when is time to sell it, so you need to find another deal again to place your money (start again).

    My point here is:

    .- These is the never-end game, once you jump you have to stay in the game for a long time most likely for ever, will no body wants to unload all the deferred taxes.

    .- You have to spend 500 hours in your business.

    I agree this is not a 8hrs x day job. And its better stay financially independant, and take advantange of our productive years to build wealth, etc. but its not that rosy as its being describe. The morale is you have to know the pros and cons before you jump in the water, type B type of person :-)

    Thank you
    PS: I always wondering why all the majority of the gurus never retire and dissapear in a island? and probably I wont find a straight answer from them, only if I became one of them :-)

  4. I love this discussion John. I think we are helping many others if they read these. Great thinking and great questions.

    It is 750 hours not 500. Still, very easy to comply with and honor the IRS requirements.

    Think deeply: If you quit your job and have no earned income, why do you need to keep your “professional” status? You don’t.

    You still get the “big” write off inside all of your properties LLC’s.

    On the capital gains, don’t ever sell. Always trade up. Add legacy to the equation.


    Answer to PS: Guru or not, do you know anyone who retired and did not do anything with their life? The life expectancy of a male in the US after retirement is 3 years. A purpose driven life is more fulfilling and healthy it appears.

  5. Thank you for your promptly response, I think this is a good exersice for everyone who is watching the conversation.

    750 hours is like 8.5 months of a part-time (4hrs/day) job. Passive investors doesnt qualify for this, you have to be active!

    My point is not try to sell real estate investment as a bad idea. I totally agree with you about the whole concept.

    What I want to know is all the consecuences of getting in this endeveaour, like:

    1.- realstate investment is a job a very well paid job only if you do it right, a job with more freedom -agreed-

    2.- realstate investment holds more risk like any other jobs with the same pay, if I got laidoff I need to find another job, It might take 3-4 weeks-to a month to find anything that match the same pay-rate in the current economi. If your multi-family start doing bad and your occupancy start dropping or any problem related to the management or equipment malfucntion or miss-calculation of the adquisition. It will take more time (and money) to recover to the previuos state it was before, financially speaking.

    3.- real state investment is a LIFE-TIME part-time-job, you have to hold it until you die. So you have to find the way to manage them when the investor doesnt wants to deal with it directly (it can be management company, LLC, partnership, etc, but you may loose the 750hrs benefits).

    PS: You flashed one point why the gurus dont go to the island, which is the 750hrs (8.5 months as a part-time job), question what other activities can qualify for those hours, like mentoring, radio shows, related activities like realstate-websites, at certain point of your life you dont want to deal with it because you get tired, or it can be fisically imposible for an individual to deal with it, but you want the big write off

  6. I don’t want to proceed until you get past one misunderstanding. Once you understand this we will continue.

    You have brought up the 750 hours again. Go back to the “think deeply” in the last response. Once you quit your job, you don’t need the write offs. You don’t have any earned income. That deduction is no longer useful. Remember that most or all of your profit from your real estate will still be tax deferred.

    When you reach your passive goal and quit your job, you do not even have to see your property.

    There is no 750 hours required except for taking the loss against earned income. Who told you that anyway?

    I am a principle in 3300 units and I spent 2 hours in meetings last year. Every dime of profit from those deals was tax deferred.

    Am I explaining that clearly?

    If so we will knock out the other points in your last response.


  7. I Got your point about tn 750.

    “When you reach your passive goal and quit your job, you do not even have to see your property.” I guess this only apply to MF.

    Please continue


  8. Great on the understanding that you don’t have to keep up the 750 hours after you quit your job.

    This applies to both single and multifamily.

    In your previous email this understanding eliminates the number 3 point and your PS. However, it seems you are still not understanding what I mean by now wanting to lay under a palm tree and sip margaritas all day when you quit your job.

    It has nothing to do with having to do anything. I has to do with wanting to help and serve others, to matter, to contribute. Enough on that. Either you get that right now or you don’t. Just keep an open mind and it will come.

    On number 1. Yes, freedom is of utmost importance to me. On doing it right, no problem. Get with a mentor that has done what you are trying to do and imitate them. Remember, everything has been done before. Don’t try and reinvent the wheel. Simply go find someone who has the results from their life that you are trying to achieve and imitate them.

    On number 2: Everything has risk. However, you are taking more risk than me. You live the risky life not me. 90% of Americans are retiring with below poverty income. In 2006 they found the average 65 year old could not write a check for $600. You are at higher risk since the 10% that retire wealthy own businesses and real estate.

    What else has you misunderstanding or risk cost you in your life? People afraid of risk are generally afraid of living. Watch out for that. I don’t care who you are, you can do this.

    It really is time for you to get into a local club and see this stuff in action. Click the Free Workshop at the top of this page and attend one of our free workshops or another groups but get going.

    If you don’t feel comfortable coming to see us, then here is the national site for most clubs: Check out at least 2 or 3 and we would appreciate it if you came to meet us too.


  9. Donna,

    Thanks for the question. The answer is lengthly so sorry about that.

    1. No one is even eligible for the advanced programs unless they have graduated the $500 program. The 2 day, 16 hour course, contains foundational material that is required to move forward. In the past we tried to let people just go into the advanced program because “they already knew it all.” They were arrogant and wrong. We no longer allow that.

    2. Most people are not qualified from the start to do the advanced program. As a rule, we only let people with $50,000 of investable capital go into those programs.

    3. You do not need it. We have people with over 100 houses and over 2000 units of multifamily in the $500 program.

    4. We do talk about the advanced programs on the radio, in the blogs and at the live Case Studies.

    5. It is not in the $500 program literature because it is not an option for non-members.

    6. The best deals do not go to the advanced program people. That could never be controlled since most of the deals we do are right off of MLS. Anyone can see them and write offers on them.

    Poor and middle class belief: “If it sounds too good to be true, it probably is.” Millionaire belief, “If it sounds too good to be true, do more research and then act on your findings.”

    While you quoted the poor and middle class belief, you acted like a millionaire by asking more questions. Well done.

    I hope this helps. Remember, when I joined, there was no advanced program.

    Stephen Davis, VP

  10. Good Morning Steve,

    I am not yet a member but am strongly considering becoming one. As someone who has tried other “businesses” that have not worked out you can understand my precaution. It has come to my attention through blogs that you have a Preferred Investor Program (PIG) that requires an investment to LUINC of 10K with a renewal rate of 4K. I am worried that the people that can afford to join this program get the best deals, preferrential treatment ect… while the others are left out. I also find it unsettling that this is not mentioned in any of the literature handed out at the introductory workshop. One only finds out abot this AFTER they pay the fees to join. You know the old saying…..if it seems to good to be true, it probably is. I would love to hear your comments on this subject. Thank you,


  11. and I have the feeling when Del says they buy properties at 50 cents of the dollar, he referred to the PIG or 4K members. Not the base subscription.

    PS: But at usuals you get what you pay (sometimes)

  12. Thank you Dave, I appreciate the information. Lengthy is not a problem for me, the more info the better as far as I’m concerned.
    A little more research on my part and hopefully I too will become a millionaire.


  13. Poor John. Wow. Almost 20 years mentoring and I have never seen anyone that no matter what is said can come up with a negative point of view.

    Remember the mentality is like this:
    Don’t exercise, you might get injured.
    Don’t have a long term relationship, you might get hurt.
    Don’t give to charity, it might be a scam or I don’t even have enough for me.
    Don’t get a job, you might get fired.
    Don’t breath, you might inhale pollutants.

    Regular members get the 50% deals too. Stop making stuff up in your head, lying to yourself and get out there and live.

    Sorry for the sarcasm but sometimes it is the only way to get through to someone paralyzed by skepticism. Pseudo intellects hide behind skepticism as if it shows intelligence. It doesn’t.

    I think of unbridled skepticism like vomit spewed onto others. I harms you and the people it lands on. There is a great deal of difference between reasoning and questioning vs. insecurity based and skeptical rhetoric.

    Stephen Davis, VP

    PS Does everyone understand the difference between activity and productivity? Is your time writing and reading this stuff leading to some action? Or are just looking for reasons that reinforce why you are not already taking action? Are you getting the results from your life you want or not? It is a yes or no question. There is not “sort of.”

  14. Natalie Pilkinton says:

    Wow… IT is funny how these things take on a life of their own in a way… Real estate is a great tool to build wealth for yourself and family not to mention being able to leave a good legacy. What needs to be realized in all of this is you wont get anywhere fast unless you get out and educate your self on the proper way to invest in real estate.

    Go to to find good clubs in your area.

    I was a member at Lifestyles FFP ($500) level and bought great real estate. I also see the advantages of the advanced memberships. They have their places for different people. I started with no money. I made things happen for me and my family. I guess that is the kind of person I am. I am not going to sit back and look at all the ways to fail, but all the ways to win and what winning means to my family.

    I hope you guys will get out and take some classes plus read some books… Such as RICH DAD POOR DAD and Richest man in babylon. Good stuff on the reading list.

    Have a great day and I hope you find real estate in your portfolio.

    Natalie Pilkinton

  15. outch that hurts :-)

    well my intention (bringing all the points to the table) wasnt scare anyone, just simply give you more broad visibility what is this deal about. (Type B personality)

    Thank you Nathalie for stay calm and I just ordered the babylon’s book today

    have a good day.

  16. Way to go John. Again, sorry if I misunderstood the motives.

    I want you to understand that the same intelligence and hard work that got you to a level where you and your wife make the kind of money you do, will allow you to do what we are doing. In fact you will laugh at how simple it is by comparison.

    A vs. B Joke

    Scientists fill a room with toys and let a B-type young boy go in and they observe his behavior. The boy looks around and begins to complain that there is no room to play. The toys are everywhere and who was dumb enough to do this.

    The scientists then fill a room with horse crap and put an A-type boy in the room. He dives right in. Throwing crap around, jumping, celebrating and laughing.

    When the scientists ask the boy why he is so happy he says: “With all this horse crap, there has to be a pony in here somewhere.”

    I hope you enjoy that joke. Get our free listener kit. There is a free digital copy of 3 books you can read immediately including “The Richest Man in Babylon.” Top of this page on the left for the link.

    Thanks again for your great attitude and funny response. (Ouch? Sorry)


  17. Sorry if my scepticism and questions creates some disconfort during the conversation.

    I really enjoyed your joke and I know there is a real pony in this business (you and some of the luinc’s member are a living proof of that), I want to be “prepare and aware” if I found something else (Sorry type B again :-) )

  18. Fransisco says:

    I have $100k in investable capital, I have been reading a lot about real estate for a year, I attended your case studies but I have not joined yet, I know most of the theory about the business, now is time to get practical and I have a few questions.

    My goal is to create enough passive income to fully support comfortably my family ($10,000 per month, how much multifamily do I need to control to reach that: $1M, $2M?). Therefore I want to go directly into multi-family because of the greater cash flow it provides.

    Both my wife and I have full time professional jobs with good pay. My availabilities are: week ends, nights and every other Friday.

    I want to get my first apartment complex this year. Here are my options and I am seeking your advice on them:

    • Join lifestyles: I am reticent in going for the $10,000 PIG because it eats up 10% of my potential return. So: can I do multifamily deals without being PIG?
    What exactly are the benefits of the PIG membership versus other membership types?
    Now, when I join, here are my options:

    o Join a deal as a passive(not my style, I like to be the decider) investor to learn from others and be hands off a little bit
    o Join lifestyles and go for a first deal with only my wife and I, no other partners. What kind of complex can I target with 100k in capital (500k? do I need 20-25% down or can I do seller financing for that part?)

    Steve, what is your advice?


  19. Fransisco,

    Thanks for the questions:

    1. Join Lifestyles: We rebate the $10,000 back to you to use toward deals. That is one of our “claims to fame.” The PIG membership is actually free. Get into your nearest office and talk to a mentor to find out more.

    With that said, the $500 program will teach you everything you need to know to do it by yourself anyway.

    2. Join as a passive: You will make more money as a lead and reach your financial goals faster like in question 3.

    3. I like this idea best. However, consider letting passives invest in your deal and do larger deals.

    Have you been to a workshop with us or anybody else?


  20. Jerry Phillips says:


    I have been an investor in the past with some good results and some not so good results. The majority was good, but now I’m stuck with a couple of properties that is costing me a lot of money, which they shouldn’t be. It’s back to the fact that you make money when you buy property. One of my properties is in a condo complex in Austin, that has several foreclosures that have driven the prices way down.

    I have always wanted to get into the apartment complex side of this, say up 0 to 30, then up to 50 units to start with and then branch off from there to 50 and up.

    My problem is that I had used another Real Estate Investment company like Life Styles, where I paid a lot of money to teach me how to buy the multifamily unit projects, but they let me down big time. I’m not going to mention their names, but the experience that I had leaves a bad taste on Real Estate investment companies. It has given me a negative feel in this area, where before I was very positive, as a A type personality it has given me a Guards UP mentalitity now.

    What is your advice for a person like me that has been there done that, had some success on single family and a 4 plex, but is a little hestiant to get back in to the business.

    Look forward to your response.


  21. First, don’t let it get you down or out.

    Do not sell unless they don’t cash flow. I guess they don’t cash flow and that is your problem.

    Advise? Come meet me and the mentors this Thursday at our Central Texas office for a Case Study. See members discuss single and multifamily deals we have done recently and see us in action. It’s free and no big sales pitch.

    Call 1-866-945-6565 for reservations.

    In my opinion it is the only way to get past having been burned by a late night TV group.


  22. Steve,

    Could you give me an example, of someone you may know, where a person got into real estate investing and had bad/no credit and no capital and became successful. What did their first experience consist of? HOW does someone have no credit-no capital and become successful in real estate from day one?

    I’m intrigued on HOW this is possible.


    • OK, Scott, here’s my own real life start into real estate. I wouldn’t want to be held accountable for recommending this avenue, but you asked for it. First, I suffered from paralysis of analysis for about a year before buying my first property. I definitely had no money, and my credit stunk. Two weeks before my rent and car payments were due, I quit my job working in an envelope factory.

      I found a private lender who would lend money based on the deal and not on credit or finances. Next, I begged and convinced a wholesaler to give me a contract on a duplex without requiring earnest money. I bought my first property for $36,000 with no money out of pocket. It was a duplex in a relatively rough neighborhood in Atlanta, Georgia. I bought the place with a no-credit-check, hard money loan at 10pts/18% interest. Yeah, I know!

      The duplex I bought was already occupied, so I had immediate monthly income to pay my note. I was able to pull some additional cash out of the repair escrow to stay afloat. Yes, funds for repairs were rolled into the loan. While putting on a new roof and painting the house, a lady from across the street who managed a rooming house had come over to me and said she wished I could do that to her house. I said give me the name and number of your landlord. Within two weeks, I had seven rooming houses under contract, all from one distressed landlord.

      I called another wholesaler who was already well established and asked him to show me what to do with the contracts and to help me sell the houses. I, in return, would split my profits.

      After I closed my first deal, I went to Office Depot and had a field day. I bought my first desk and my first swivel chair. I bought my first computer, my first printer and my first dry erase board. I even bought my first cell phone. Yes, I did my first deal with absolutely nothing but a typewriter, and it sat on the floor.

      Note: This was about 14 years ago. I was 35-years-old. Now, please don’t discard this as ancient history. Sure, things are different today, but what I am leaving out is 100% applicable today. That is, my passion and fire in the belly at this time was relentless. I would not take no for an answer.

      I sold the seven rooming houses and sold the duplex a year later. I went onto buy and sell upwards of 50 houses over the next few years. Am I rich now? No. I’ve gone through bountiful peaks and fruitless valleys. I am now a webmaster, having recently launched REI Free Classifieds, specifically for the real estate investment community.

      Oh, and, Stephen … yes, I was an average Joe. Great and enduring thread!

  23. I came to the workshop on Thursday 4/21/11. I was really excited bout what I saw at the workshop. And really think I’m going to join in 2 weeks. Only thing I was starting a business with primerica financial services also but than heard bout lifestyle. Guest I’m wondering if I could do both.

    • Stephen Davis says:

      Yes, you can. Use one for earned income and us for passive income. Great combo.


    • Stephen Davis says:

      Yes. You can do both. Most every member and student has two sources of income, earned and passive.


  24. Steve;
    I tried to be a real estate investor several years ago and was burned badly, consequently, we had to get rid of two of the properties and one foreclosed. My question is, with some money to invest and marginal credit score(650), can I still achieve that passive income through real estate that I know is there?
    I have been following this site since I returned from Iraq and am considering joining Lifestyles to help me reach that goal.

    • Stephen Davis says:

      Yes, you can do it. It will be a little tougher than if you had perfect credit but none the less it can be done. I started with a score in the 500’s and no money.

      • Thank You Steve;

        Well, Im working on improving the credit score issue and will be at the next workshop in Dallas and look forward to starting my investment career the proper way, with people who put others before themselves and will share knowledge as all the members of Lifestyles does…….

  25. Stephen Davis says:

    Great. We look forward to having you as part of the Lifestyles family.

  26. Errol Cloud says:

    Hello Mr. Davis
    I was listening to the radio show today that you were a guest on. You mentioned that flipping homes in todays real estate is not a good way to go. Buying and holding is the only way to build real wealth, is what you said if I heard you correctly? How can a person get into real estate the right way, without a lot of money? There is a two week seminar scheduled for flipping in houston by the (flip this house guy). Flipping is still being taught as the way to buy, is this the only way

  27. Steve I loved your responses and your philosophy on getting started in real estate. The joke A&B Types was hilarious. Well done!

  28. Larry E. Torry says:

    I enjoyed the entry, “Breaking Down the Mentality of the Average Joe.” From what I have heard, “Rich Dad, Poor Dad” touches on that same “millionaire belief” mentioned in the A-B “If it sounds to good to be true” example.

    I am just getting started here, and I do thank you for the advice to expand my list of required reading. —Torry—

  29. I am really delighted to glance at this blog posts which carries tons of valuable data, thanks for providing
    these information.

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