Short-term sacrifices for long-term success
Short-term sacrifices for long-term success
For new investors, the scales can seem heavily weighted towards everything you have to give up rather than looking ahead at the long-term rewards. You do the sums and see less money for going out, holidays and hobbies and more spent on the expense of getting into the market, specialist advice and other fees. Somehow you’ve got to make every cent coming in go further, pushing your budget to its full extent to get your property purchase over the line. At this point, it can be tempting to walk away, but when you see those rewards - when you really take time to assess the paperwork and see what you stand to gain - it’s at that moment you know everything is worthwhile.
Everyone makes sacrifices when starting out, but some can be tougher than others.
My own experience as an apprentice auto-electrician earning $254 per week meant I missed out on a lot when I decided to pursue my interest in property. I car-pooled to TAFE to keep costs down and often skipped night clubbing with friends because it cost too much money. I also worked more hours than a standard 38 hour 5 days a week, so I could earn as much as possible. I sold my good car for a cheap $1500 dollar alternative, so I didn’t have to pay any loans. Selling my skydiving equipment was one of my biggest pain points - at the time it was my whole life, but I needed the money to put in a driveway to finish off my first investment property house. While now I can see it was one of the best decisions I ever made, at the time it was really hard.
• At the start, I didn’t have anyone in my corner helping me from a professional point of view. This ultimately cost me big time from two deals I backed out of when I was 21 years old. If I’d had the right expertise behind me, I’d have felt more confident to go through with the purchases of these properties and would have made just over $1m more in equity today. I later had problems with one of my investments being trashed by a tenant, which was almost enough to get me selling up and forgetting about investing. But it’s then that I learnt the value of having an experienced team behind me to help achieve my goals. My property managers took photos of the damage and submitted it to my insurance company, who paid out no questions asked, even the loss of rent. I realised that the property had gone up significantly and that this was only a small issue that I had built up in my head to be a large issue.
• These weren’t the only challenges along the way, nor were they the only sacrifices - there were many more to come. I missed out on a lot of events, from family events to my 21 st birthday, which was spent in the remote town of Junee working. I missed most Christmases, New Year’s and all the public holidays that I worked. When my friends were going on overseas holidays, buying new cars and going out, it made me question what I was doing. Should I just be living life instead of saving? But my drive to become successful and retire if I chose in my 30s was so strong that I blocked out any thoughts that would try to derail my success. I knew that if I sacrificed 10 years now that I would be rewarded with 40 to 50 years of an easier life for me and my family.
• Fast forward to when I made my first million dollars, all of a sudden a lot of my friends took notice and realised the opportunity that they had missed out on. As time passed, I could I look at that first house I built, where I now make $8,000 positive income per year from that one property. And my house that was trashed? When I took the right advice, I could see that I had my cash buffers in place for these types of scenarios. I had professionals fix the house and re-rented the house out five weeks later. Today that property has doubled in value. I never returned to skydiving because the addiction to property investing takes up most of my time these days, but I now get to spend my positive income on nice holidays each year like the Maldives, Bali and Fiji where I get to relax and recharge.
• Going through this time of sacrifice has taught me patience and how to budget well. I have learnt to live on very little so now I appreciate having the money to go on expensive holidays and out to dinner, whereas previously I would have stayed home and eaten leftovers for two or three nights. When I was younger I wanted to buy materialistic stuff because I thought it would fulfil my dreams, but as I’ve got older I’ve realised that time was more precious than materialistic items. Everything I did to get here was short-term pain for long-term gain. With my goals clearly in sight, there was nothing that would deter me from achieving them.