Effective use of your time is the key to being able to hold down a job to earn a living while still working toward the day that you achieve your personal financial freedom. Think of it this way. Each Monday you’re given a deposit in your time bank of 160 hours. How you use this deposit can make the difference between succeeding and failing financially. Let’s take it one day at a time to see where we ca squeeze out working hours:
We’ll start by assuming that you’ve got about 12 hours from 6:30 until 6:30 tied up with commuting to work and returning home. Depending upon ‘kid activities’ you may lose even more hours, but let’s assume for the moment that you share parenting duties with someone else who can take over the kids in the evenings. That leaves about 3 hours per night for productive effort if you expect to share family meals or get any sleep at all.
You can see why most Americans never become wealthy. They’re spending too much time working to ever make any money. A full-time entrepreneur who has managed to generate enough income to replace a salary has a tremendous advantage over someone who must spend 12 hours working at a dead-end job that might be otherwise devoted to making serious money simply because he or she needs to earn a living. As a full-time entrepreneur, you would be able to multiply the time you spent getting rich by 5; from 3 hours a day to 15.
Unless you’re tickled to death with the work you do and are willing to sacrifice your financial future for it, one of your first objectives should be to be able to quit your job and to become a full-time entrepreneur. That’s going to take a lot of work as well as real leap of faith when it comes to the family. Few spouses who aren’t directly involved are going to understand your quitting a perfectly good job to go off on an entrepreneurial tangent. The solution is to get the entire family involved. Here’s what I did to start.
First of all, we created a hard-nosed family budget. We wanted to find out as closely as possible the amount of after-tax dollars we absolutely needed to support the lifestyle we wanted to maintain. Bear in mind that his dollar figure took into account all the fun, games, gifts and parties that we’d already decided to sacrifice.
We even decided to give up one car, all club memberships, vacations, catalogue shopping, movies and dining out. And we mutually agreed to stick to the budget for a minimum of one year in order to be able to get free from my factory job. During that time, every dime of earnings we could save was going into the bank. If, after one year, we had enough saved up to meet our budget we agreed that I could quit working for others and work only for myself with my wife’s and kids’ help. Here’s an example:
Suppose that a typical family of four needed $50,000 a year in gross income to support their lifestyle. Of that, about $10,000 might go to State and Federal taxes, leaving $40,000. Of that, another $15,000 might be spent annually for house payments and related maintenance and living expenses, leaving $25,000. Of that, payments on credit card debt and consumer purchases might consume another $10,000, leaving $15,000. Food, medical, clothing, insurance, recreation, gifts and charity might consume all but $2,000 which would go into savings.
After a lot of wrangling and in-fighting, the family finds that $15,000 can be saved out of the budget by paying off consumer debt and curtailing all but the most essential purchases, reducing gifts and recreation, and being a little smarter about reducing their income taxes. They construct a $35,000 budget into which all essential expenditures are entered and monitored each week so they can see where they’re going out of bounds before it costs too much.
Now, they go to work, using those extra 3 hours a day. The kids pass the word at school that ‘dad is looking for a house to buy and will pay $5.00 for the address of any vacancy someone might see’. Mom combs the ‘house for sale’ and ‘house for rent’ ads as well as the ‘Rent to Own’ columns in all the local papers to find leads that she can call on to arrange appointments for that evening. At the end of the day, Dad picks up these leads and goes out to try to buy one of the houses that the family has turned tip.
The family continues to do this during the week, and on weekends steps up the pace to contact as many owners as possible. Family recreation boils down to the folks cruising neighborhoods looking for possibilities. The last stop of the day for Dad is at the newspaper where the ‘State Edition’ is just being printed for the following day so it can be placed on trucks to be sent to outlying towns to arrive the next morning.
Few people realized that in many towns, the Saturday paper can be picked up on Friday night. It will have all of Saturday’s ads. Dad can get a head start on the competition by calling the ‘For Sale By Owner’ ads before he goes to bed on Friday. If the deal sounds really good, he can stay up late to write up a deal. I’ve actually called on a seller after midnight and had to round up a Notary Public at 3:00 A.M. in order to close on a house when the owner was leaving the area. Nobody seemed to mind at all.
Let’s fast forward to one year later. The family, by working together to hold down expenses and to generate additional income by buying and selling houses and mobile homes has managed to put $30,000 into the bank by the end of the year, once the interest on the deposit has been added in.
This isn’t quite as much as they’d planned to make, but it’s enough for them to continue to struggle for a short while longer. Once they’ve got the full $35,000 in cash savings, Dad can quit his job and do what he’s been doing full time to generate more money. Sound fanciful? It shouldn’t. That’s pretty well what happened to me.
I know that what has happened to me is ancient history. Times are different now. That’s just a feeble excuse for not trying. Let me tell you about a young fellow with a brand new wife who moved from New York’s South Bronx to my area. He’d been a ‘fixer’ there, and had been able to put a little money aside, but he pretty well used that up enjoying married life and floundering around trying to find an opportunity. Then he started buying 70 year old houses which he fixed up and resold. His first year doing this, he netted $90,000 before taxes. He’ll do better the second year. You can too.
A younger single guy took my basic Options course a couple of years ago. He has specialized in just two things: buying and selling Option contracts on houses to build his equity; and sandwich leasing houses for cash flow to support himself. In the first year, he flipped 21 Options. So far, he’s flipped 67 of them, and also has sandwich leased 30 houses. His average profit per ‘flip’ has been $4,000. His cash flow profit per sandwich lease is averaging about $80 per house. If you add all this up real quickly, over two years, he’s made about $268,000 from flipping his Options while generating net sandwich lease income which has averaged 1,200 per month. Of course, he’s still learning.
If you'll make the sacrifices and do what others won't for a few years, you'll be able to live the rest of your life like others can't… you'll have security, cash flow without a job, and financial independence so you can do what you want, when you want, and where you want.
Are the sacrifices today worth it? Only you can decide.
If the answer is yes…Education is essential! You need to learn the RISK FREE way to buy houses and generate cash flow.
Learn how you can get out of the rat race and be your own boss! Jack Miller's Buying Houses from A to Z seminar Manual is full of creative ideas to help you set realistic goals and FAST TRACK your success as an entrepreneur. SEE DETAILS HERE
