Social media is an interesting thing. On one had it has been a game changer for most businesses and individuals looking to get a message out or create change. It allows the exchange of all types of information quickly and easily. It even allows us to keep in touch with old friends and family members in all parts of the world without having to reach out directly.
And – it has the effect of motivating me too! I follow some amazing folks on social media and seeing what they’re up to motivates me to take action. It also allows me to tap into resources and other recommended reads and products, and exposes me to industry events.
But on the other hand, it has the affect of only illustrating the best parts of the people’s life, the false hype of business and inauthentic illustrations of wealth. People love to show off photos which make us believe they are living the perfect life. Lots of pics taken on vacations down south and posts bragging about latest achievements.
I’ll be honest – there are times where it gets to the very best of us. Even those of us who are living our passion, have good family lives and are content with our paths. It makes us feel as if we don’t have enough, aren’t happy enough, aren’t successful enough – compared to that guy. It also has the affect of causing the ‘shiny object syndrome’ – making us think that something someone else is up to is the next big thing and in-turn losing focus.
I think the moral of the story is to live your best life. Yes, motivation can come from others but ultimately it is about setting your own goals and achieving them. Be your very best self.
Now speaking of all that – my intention was to talk about my business goals and focus for 2019 – which I typically break down into wealth and income. They tie very closely into one another but are definitely different.
Let me take you back to the holiday season back in December 2017 – my wife and I were having dinner and discussing our goals for 2018. At the time, we were not only super pumped that it was going to be a new year, but we just found out we were having another baby (and we didn’t even know we were having twins at the time).
But we did know that life was going to get a little more crazy and I had to figure out another way to make an income and still have a good family life.
My Real Estate Sales business in 2017 was my best year yet, helping over 35 clients acquire properties. However I had hustled hard to get those results – working close to 60 hours a week with many of those hours consuming my evenings and weekends. This had a huge toll on family life and I could not sustain this path – no matter how great the income was! I had to expand this business model and work with some great agents who serviced the geographic areas my clients were buying in to help me with showings and maintain a high level of client satisfaction. So this is exactly what we implemented in 2018.
This also meant that I had time to focus on another stream of creating immediate income.
We knew that we wanted to stick to our core real estate business model and utilize the skills and resources we already had available. Aside from our real estate sales side of the business – our primary wealth building tool was buying and holding cash flowing rental properties. We employed the BRRRR – Buy Renovate Rent Refinance Repeat strategy (I call this Flip to Yourself) which was a great way for us to create instant equity and rapidly grow our portfolio. I had already renovated over 30+ properties, however we rarely sold any of them.
We decided that we would try our hand at flipping – so fully renovating and then selling the property. This did two things – it allowed us a method to generate instant cashflow instead of just equity and it opened up our geographic range to any home within a certain radius of our personal residence as we weren’t looking to hold in long term.
This was an entirely new business and I had to acquire new skills in finding deeply discounted properties, negotiating with the seller, raising capital and finding money partners (the closing on these properties is often extremely quick and the properties are severely distressed).
The good news is my learning curve was short – I was able to create a new stream of income for ourselves with less working hours outside the home and more free time for the family on evenings and weekends.
So now we have a good sources of income – what about wealth?
In economics, wealth is the net worth of an individual (measured as assets – liabilities). Pretty straight forward right.
Now while wealth represents what a person owns, income is what he earns, and it consists of the inflow of cash. In the long run, income creates wealth if it is properly managed. A person may have a huge income, but if he doesn’t save and invest this income, he will not be able to accumulate wealth.
Most of the strategies I employ in real estate are for wealth building purposes (buy and hold good homes in good neighbourhoods). My tenants pay down my mortgage, my properties appreciate and I usually reinvest any cashflow that I receive – so in other words my money is working hard for me! And best of all, most of my wealth is not taxed the same way income is!
Think about your goals for 2019. What are you doing to build wealth and how are you supporting that with income generating activities?
So until next time, happy Ontario Real Estate Investing.
Jose Jafferji, REIA