Should I Invest In Stocks, Crypto Currencies Or Real Estate? How I Made My Initial Choice 9 Years Ago.

The Toughest Decision Of My Life

When you start out investing, you really have 3 main buckets to choose from. I went through the options available to me at the time and I immediately threw Bonds out the window because the yields weren't high enough. I didn't know anything about Crypto back in 2012, but I was looking at #stocks and Real Estate as my only options.

In this post I want to go through the process which I used to make this decision, which ended up shaping the early years of my investing career and has allowed me to begin diversifying my wealth into the other major asset classes including some small holdings in #silver, although I regard this as my lowest valued asset currently. Before we dive into the process I used I think it's important to pick back up with the questions I was asked in that fateful car ride with Bruno.

“So, What Did You Do Before Real Estate?”

I kind of preluded this when I was talking about my lack of college, but that wasn’t where things picked up for me. I started in retail, then went into retail management, then into physical labor, then finance as a billing representative for a computer company near Boston. After getting married to the girl of my dreams, I worked for Johnson & Johnson for a short time. I realized that whenever I would jump from one company to another, I’d gotten a pay raise.

I’d be doing less work, but because I had a different title, I could update my resume and I’d be able to get paid more, so I started doing that. I said, okay, this company’s willing to pay me this at this title, so here I’m a billing representative, but now at Johnson & Johnson I’m an excel specialist.

Boom, that jumped me up. Then I slid over to Coca-Cola as a planning analyst, looking at spreadsheets to see what needed to be done and then putting information into a computer so the machines would do it, and that got me another raise. Soon after that, Johnson & Johnson called me back and wanted to give me an administrative assistant position for the vice president of sales, so I went back to Johnson & Johnson, and I got another raise to just book their flights, pay their credit cards, and other little stuff like that.

How Did I Save Money For Investing?

That was my career, taking all different but similar jobs and getting bumps in pay each time. Finally, I realized again that I really, really, really, really hated doing that. I hated doing the tedious things. Some people love doing that stuff. Not me. I hated it so much that I hate doing it for myself, and yet I was doing it for a living. That’s what triggered me to get out. I was making $70,000 a year and my expenses were well under that. I probably spent $30,000 a year, maybe. I lived off about two thousand dollars a month between my first #mortgage and utilities.

My trusty truck was long paid off at this time and was still running like a dream for the most part. So I had this exorbitant amount of money that was going into savings every year. I just didn’t need it. I was always a $40,000 per year person. Then I suddenly started making all this money and I started buying real estate because that made sense to me at the time. I said, “I’m going to replace my #funds with real estate.”

“When was the moment you knew there was more?”

I remember it was a super-hot day, like extremely hot. Sweat was pouring down my face and I had taken off my shirt, which was only about 30% fabric while the other 70% was soaked from my body and begging me to go back inside to my air conditioning, as I mowed the lawn in the backyard of my first ever single-family home. I’d bought the home when I was twenty-two years old with my girlfriend.

It was in that home that we’d spent months sleeping in the kitchen as we renovated the place to be the perfect dwelling for our little family, just me and her with our two dogs and cat. It was in that home that I’d proposed to her, and it was in that very backyard that I’d married her, vowing our lives to one another’s happiness and devoting everything I did to making her every dream come true.

I was cutting the grass and I remember having the distinct thought, “Yeah, I’m the lord of the land.” It was a reference to something my grandfather used to say. You remember, the grandfather who came over from the Azores and bought a multifamily house? That one. “I’m the lord of the land”, he used to say it and remind me the tenants paid him rent. In that moment it hit me, I have all this land – it’s all mine and nobody’s paying me rent.

House Rich, Cashflow Poor

I’m working and I’m paying a mortgage of $1,400 a month. I’ve got to pay the water bill. I’ve got to pay the electric bill. I’ve got to pay for overhead. I’ve got to maintain the lawn, and the lawn mower, plants, trees and the fences. I’m doing all this work, but all I have is a house. Where’s the money? Why did I buy this thing that doesn’t pay me?

My grandfather was the “lord of the land” and people were paying him to live there, paying him to do all that work. What kind of a lord was I, doing all the work and paying for the pleasure of doing it all myself? He’s a landlord and I’m a landlord, but he’s getting paid and I’m not.

I remember having this very frustrating conversation in my head, where I was just very upset with myself for putting myself into a situation where I spent all this money on something that wasn’t benefitting my life. It made me feel like I had accomplished something because that’s what society teaches us – that if you buy your own home that you’re successful – but it didn’t actually pay me. I was stuck working because of this house. That moment was a punch in the gut so hard that I lost my breath and realized that I didn’t want to do this anymore. What were my options, then?

“What About Stocks And Crypto Currencies?”

I did some minor stock trading here and there for a while when I was still at Johnson & Johnson, but I kept getting my account frozen due to day trading regulations and not being an accredited invest at the time.

#cryptocurrency is big now with #bitcoin on the rise and everybody is coming up to me saying, “What about Bitcoin? Are you in this? What do you think?” As far as the stock market I invest in Real Estate Investment Trusts (REIT’s) because I understand real estate. I invest in TESLA stock, because I believe it's visionary and the use of it's vehicles and I invest in Bitcoin through Mining companies because I am comfortable with the leverage as well as holding Bitcoin, Etherium and a few alt coins like LEO and WLEO. I do this because I understand their use and I like to have a small amount of risk with high growth potential in my portfolio.

I’ll tell you the same thing that Warren Buffet says to everybody, which is this: If I don’t understand it and I’m not going to get into it until I do. I’m not going to invest HEAVILY in crypto yet, because I don’t fully know how it works. There’s money that’s being made in cryptocurrency, yes, absolutely and I do keep about 5% of my wealth exposed to it. If you understand it and you trust it, definitely, go for it and if you are REALLY good you should go all in, but if you don’t understand it, you can’t trust it, and you shouldn’t invest in it until you take the time to understand the asset.

“So Why Real Estate?”

Real estate, I understand. I understand it very well, so real estate is where I invest 90% of my wealth. I can make money no matter what the market’s doing, and so that’s what I do. Like I said, I tried day trading for a while, but the problem was that I would make a little bit of money, then do something dumb and lose it, then I’d make a little bit of money, then do something dumb and lose it, and I did that all the time. I couldn’t control whether it was going up or down.

I couldn’t add value to the company, so it wasn’t something I could fix when it went wrong. With real estate, though, I can really get into a property and turn it into something else. I can make money a different way. I can adjust the use. I can fix it, renovate it, and increase rents. There’s all sorts of different things you can do to a property to make sure that it generates extra income. In real estate, if you know what you are doing, you have control of whether you win or lose.

Another big part of it was that I read in a blog that 80% of #millionaires made their money through real estate, and that seemed like good math to me. I figured if 80% of them were doing it with real estate, I wasn’t going to try what the other 20% were doing. It’s possible, apparently, but it seems like the success rate is lower in cryptocurrency and owning companies. But real estate covered 80% of millionaires, and I decided to go with the better odds. Pareto’s Principle is the 80/20 rule, and I decided the eighty made more sense. I went after real estate and found it fascinating.

How I Learned Real Estate

When I made the decision to get into real estate, I started talking about it to everyone and saw the Law of Attraction at work. Real estate connections started popping up everywhere. I was working at Johnson & Johnson and I mentioned to a woman I worked with that I was getting interested in real estate, and she said, “Oh, my husband is a real estate investor. In fact, he used to manage a hundred properties. We own a place in Florida, Boston, on the Cape, and we can live in any one of them at any time. They’re worth well over a #million dollars and everything’s pretty much taken care of by our tenants.”

I was enthralled. I could tell my mouth was agape and my eyes were filled with the fire and fascination I still hold today. In that moment, I realized what I had always known but always doubted: “Oh, my God, this is real?” People actually make money in real estate and they’re millionaires. They have homes in all these amazing places and they can just decide, I’m going to go live in Florida for a while, or on the Cape, or in Boston. It was a ground-shattering moment for me.

I was reading all these articles and blogs online, listening to podcasts and watching all kinds of YouTube videos, studying and building a spreadsheet with all these numbers, but they all felt fake until I finally met her husband.

How I Found My First Mentors

He discussed with me so many things, like GRM, cap rates and a thousand other things in those conversations we had. I didn’t understand a thing he was saying, but my homeschooling kicked in and I realized that if he could do it, then I could, and all I needed to do was dig deep enough for the right information.

So I started digging, and he was my first #mentor. People ask me all the time what kind of guru’s and classes I took to get into real estate. I didn’t. While guru’s and classes do have their place, I truly believe that mentorship and coaching are far more valuable. For me, I knew that I wanted to learn and I didn’t have money to take all kinds of classes, so I started digging online, reading books, and I started to get involved with people who owned real estate.

When I met somebody who owned property, I took them out for lunch and asked them all kinds of questions: What do you know? How can I get more knowledge about this? When I took my coworker’s husband out to lunch, I asked him all those questions. Thanks to him I met great friends and my first investor agent and my second real estate mentor – Jim Baptista.

Jim Was Phenomenal

He owned a bunch of property and he was willing to take me under his wing, to show me the ropes and help me get started with investing. Jim was the incredible real estate agent that helped me buy my first investment property after my wife and I sold our single-family home. I worked with Jim on buying my second property also, and he mentored me as an agent when I got my real estate license not long after.

I look back and know that I wouldn’t be the success I am today if it wasn’t for Jim being in my life. I’m lucky enough to still have him in my life. Sometimes he’ll call me up to check in on me and see how things are going and even though I may own more property than he does right now, I still like to call him to check in and see what I’m doing wrong or what I’m doing right because he’s always been a genuinely good person and I know I owe a huge part of my success to him.

So, the mentors in my life, they’re huge and I genuinely appreciate the people who stepped up for me. At this point in my career, I’ve had many different mentors, and I’ll have had hundreds more by the time I die, but there’s quite a few now who’ve really helped me get to where I am. Finding the right mentor will take you a long way in your road to success, and by picking up this book, I can tell you’re ready to begin. So let’s do this!

Alchemist Insights

-A Mentor is someone who is far ahead of you and has the life or business that you desire. Seek out mentors now and often.

More To come...

Over the next few posts I will continue to reveal some of the critical experiences in my early life that formed my view of the world and why I continue to building my real estate empire and likely what has lead to my new found love of Silver, Crypto, business and the Stock Market as ways to diversify my wealth and income streams.

These posts are being pulled directly from my first book, Broke To A Quarter-Million which can be found at Amazon and Audible! Get your copy and let me know what you think!  

Posted Using LeoFinance ^Beta