I was thinking back to when I first got started in REI about 18 years ago. I hardest thing I ever did was making making my first $100,000.
I don’t mean $100,000 in equity, I mean CASH. I know that some people hit the long ball first time up to bat. I was never one of those people. When your starting out, your learning everything, have very limited funds and this is where you can get in trouble. I remember the first home I purchased. I was very nervous, but the price was good so I robbed Peter to pay Paul and made a small but important first profit.
Building that intial $10,000 profit (18 years ago) into $100,000 cash took about 5 years, a lot of sweat, a lot of 80 hour weeks, and a ton of learning. But a funny thing happened along the way, I learned how to make money with money. It amazes me that this basic concept is NEVER taught in our schools to children. I had to learn myself, and the teacher didn’t spare the rod while teaching. No better way to learn than by losing your own money.
Interesting how once you reach that $100,000 level your thinking clears, you have confidence in what your doing and the deals come easier and more often. New guy’s ask me for advice and I always tell them that making your first $100,000 is the hardest thing you’ll ever do.
Once you get there, that cushion gives you much more leverage and options. The hard part is SAVING that money until your reach that $100,000. Making the $100K is not that hard, SAVING it IS. In this business money is blood. Without it you die. When you can get a cashiers check from your bank and buy a home in one day with very little carrying costs, your profits grow very quickly. Another intersting thing happens when you hit that level. You banker suddenly wants to loan you money for anything. It’s like a giant snowball rolling down hill, as it gets bigger it picks up speed.
Save, build, save some more. Use credit to your advantage not to theirs, and never stop learning.
Great country we live in. THE BEST!