Real Estate Investing Wealth: the first step
The first step to real estate wealth starts with your mindset.
So how do you know if you’ve got the mindset of a wealthy person or if you’re traveling the path of the poverty-stricken? Let’s see if your brain is in the right place with a simple test…
Even though you may know nothing about real estate investing, I walk up to you and say “I’ve got a real estate deal that needs $20,000. What do you say?”
What would be your response?
Poor mindset response: “I don’t have that kind of money, Jarom.”
99% of the American population would come up with some version of that statement–”sorry, I don’t have the money so I can’t do it.” That is why 99% of the people in this country are not wealthy and never will be.
Do you think Donald Trump ever says “I don’t have the money”? Does Warren Buffet every say “I don’t have the money”? Did Henry Ford, Charles Schwab, or John D Rockerfeller ever say “I don’t have the money”?
No! And it’s not because they have the money either.
They’re wealthy because even if they were dirt poor, they wouldn’t respond “I don’t have the money.”
So how would they respond? If you’ve read Think and Grow Rich (pick up your free copy on our recommended reading list if you haven’t), this is how you would respond:
Wealthy mindset response:
“What would this deal make me?”
People in a wealthy mindset don’t ask how much it costs, they ask how much it will make them.
This is important–let me put it another way.
Wealthy people (or those who are on their way to being wealthy) don’t look at opportunities based on price. They look at the benefits and then decide if the price is worth it.
You see, the wealthy know that if the deal is right then they can find the money. It doesn’t have to be their money.
If you asked me “What would the deal make me?” and I replied “$30,000 in six months” do you think that, if you didn’t have the $20,000, you could find someone who did and offer them $27,000 in six months to borrow their $20,000? And you’d make $3,000 in the middle for doing a little money-finding leg work.
The whole reason I’m asking you for $20,000 in the first place is because the deal will make me $40,000 and I’m willing to give up $30,000 of that so I don’t have to use my own money.
If I use my own money, the number of deals I can do is limited to how much money I have. If I tap into other people’s money, I can do as many of those deals as I can handle.
Donald Trump and Warren Buffet know this, so when a new investment crosses their desk that makes sense to them, they don’t look at their bank account to see if they have the money. They grab the deal and then find the money to make it happen.
After all, if your first response is “I don’t have the money” how would you ever know if the deal was a good one? You wouldn’t.
The whole point of this exercise is that big opportunities are going to cross your path. If you’re in the mindset of poverty and scarcity then you’re going to miss them. But if you prepare yourself by learning how the wealthy think and work, you’ll be in the mindset of abundance and wealth.
Then you’ll recognize opportunity when it knocks, and you’ll be ready to take action.