Part II of Our Interview with a Millionaire - G
Yesterday, we introduced you to “G”, a Real Estate Broker, Investor, and Entrepreneur. After reading the interview, you’re probably not surprised that he describes himself as a “Type-A guy”.
What is not as obvious from yesterday’s post is his investment strategy: for G, peace of mind is much more valuable than bigger pieces of the pie. Part II of the interview will shed some light on how he has achieved financial freedom while minimizing his risk and stress levels.
Mark: How do you approach your real estate investing?
G: [There are] two mindsets: one is the mindset of “I’m going to establish good credit, and then I am going to leverage myself to create avenues to purchase or invest via financing.”
My philosophy has been completely the opposite of that. A lot of [my success] has just been timing and luck of the market. When I went in 12 years ago, things were really inexpensive relatively speaking, so I was able to capture a lot of appreciation in real estate, and create wealth that way and then reinvest. I have bought [property] as I can afford [it].
I don’t leverage anything. I don’t leverage my house; I don’t leverage my properties. Occasionally I’ll pull a loan, and I try to pay it off, but I’ve kind of bought as I could; if I couldn’t, I didn’t.
And so, I’ve bought…less attractive [real estate] deals that maybe had less attractive returns, but nonetheless had a high return. [T]hat’s been my philosophy that has worked.
I’ve tried to never be in a position where I was leveraged, where if the market did turn, as it has in Colorado, and in Utah, and everywhere else in the nation, I wouldn’t find myself upside down.
All the rental properties that I own, I own without having an obligation to answer to if… renters move out or whatever. So, that’s been my approach, and will probably continue to be my approach going forward.
I’m not a big stock market guy. I don’t like throwing darts and trusting somebody else that I have absolutely no idea of what capabilities they have.
Mark: I’ve talked to other people who say, “Leverage everything you possibly can.”
G: Right. Both theories theoretically could create wealth. One’s just a much more stressful way to do it, and it just hasn’t worked for me. I’m just not that type. Even though I am a Type A guy, it just is too stressful for me, it affects my mood and my personality, and it just doesn’t work.
What personal finance advice would you give me?
G: I’ve never paid interest on a credit card, I’ve never allowed myself to get beyond my means, and that has been a great source of peace for me and my family…if I can’t do it, I just don’t. It’s not worth the risk to me.
[I]t is a high-debt society, and it’s everybody keeping up with everybody, and it becomes kind of a competitive deal out there, especially with younger couples. But I would… tell [you] to stockpile cash as much as [you] can possibly save, and then to eliminate debt.
Contrast G’s philosophy and peace of mind with what is going on right now with our economy. America is fighting off a recession, and is doing it in the face of a virtual meltdown in the housing and mortgage market. If you have turned on the news or picked up a newspaper in the last 12-18 months, you have surely seen headlines similar to these:
“The housing market is crashing”
“Foreclosures are at a three-year high”
“Sub-Prime woes drag down Dow Jones”
And chances are that you, or someone you know, is hurting financially because of the economy. Good people are losing their homes to foreclosure; others are declaring bankruptcy because they have run up credit card debts of $25,000… $50,000… even $100,000. And who is the biggest debtor of all? That’s right, the US Government, with debt now in the TRILLIONS.
It is probably not realistic for most of us to pay cash for our homes; a mortgage may be the only way that you can afford a house. But there are practical ways that you can apply these principles in your life? A good place to start is by reading (or re-reading) our post on budgeting.
Subscribe to the Butler Project's RSS Feed and get fresh content as soon as it's posted.Related Posts:
3 Powerful Reasons to Earn an Extra $16.67 per Day
Funding Your Life: part 1
Why Everyone Should Experience a Sales Job
You Control the Money or The Money Controls You
No comments yet.