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Game Time: Temporary Income vs. Permanent Income

I often wish I could go back in time ... back to high school.

Why?  Why go back to the land of gossip, pimples and exams?

Because it would be SO COOL to have someone, at that young age, explain to me the difference between creating temporary income versus permanent income.

In high school, all the guidance I received was around temporary income.

Stuff like this wasn't much help to me...

"What career are you interested in?"

"Your aptitude tests suggest you should apply for the Engineering program at University."

"You are good at math."

Great, thanks.

Can you imagine if someone said:

"Hey Tom, without money working for you-you will always have to work for money.  Like, forever."

Holy shit.

That would have been cool.

I have no clue if it would have meant anything to me at the time.

But it would have been cool.

Instead, I didn't get this advice and never really had that type of thought until I was in my twenties.

I'm not blaming.

Just saying.

At dinner parties, I've spent countless hours listening to people tell me about the politics at their job and how they are navigating them.

They're hoping to report to a certain VP or Director and not another one.

Or they're positioning themselves, strategically, in the best light inside their company.

There's often a lot of effort that goes into this.

Sometimes months of stressful scheming ... hoping their program, division, department goes according to their plan.

It's a lot of stress.

So when these same people tell me they don't want to deal with real estate properties because it's too much stress I shutter.

"Will I have to go down to the property if there's a problem?" they ask.

"Will I have to deal with tenants and return their phone calls?"

Once Nick mentioned to me that he figured that each phone call on one of his properties was worth $2,000 one year.

When he accounted for all the cash flow, the equity and the appreciation he was able to achieve on just one property these few phone calls he received were worth $2,000 each.

Now that's some accurate thinking on Nick's part ... a la Napoleon Hill.

Granted some University and College degrees to lead to building income streams.

Often, dentists, lawyers and accountants end up starting their own practices.

Engineers can start their own firm ... my brother-in-law pulled that off.

But often, even in these situations, as you enter your 30's and 40's you begin to realize that when you stop working the money stops.

I'll never forget the day I realized that the industrial unit that our father was renting out for his drywall company was worth more after 20 years than his company.

I always remember thinking that was kinda strange.

Why didn't we just buy the building?

Those thoughts never left.

Today we run Rock Star Real Estate and sometimes I wonder what will have more value in twenty years ... the business we're building or the properties we're buying.

The properties produce cash flow today and they'll produce even more cash flow down the road.

The income they spit off is permanent.

It will always be there - barring major changes in the area.

They'll just spit off income every year.

It's permanent.

Heck, we can pass them on to family members.

They may produce income for our family ... forever.

It bothers me sometimes when I lose sight of this. When I get caught up in the day-to-day nonsense of our lives and business and forget that I should be picking up more permanent income.

Pisses me off actually.

Freaks me right out.

It's so easy to get comfortable in your job or with your current income that you don't push yourself.

You end up listening to all those people who say to take it easy, to slow down, to smell the roses.

I'm pretty sure I can smell the roses and push myself to accomplish more.

So ... ask yourself this:

How much time are you spending on building your permanent income?

Any?

A little?

Have you gotten comfortable with your job and forgot about going out into the cold to look for good income properties?

Remember, your comfy situation today will piss you off at some point in the future.

And then you'll regret not taking action today - while you're happy.

Keep focusing on the permanent income component of your life.

It has the power to set you free.

"Without money working for you-you will always work for money."  

Until next time ...

Your Life! Your Terms!

 

 

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