Thursday, July 20, 2017

How I turned my Finances Around…

March 12, 2012 by  
Filed under Buying Real Estate, Featured Posts

My story starts off typical – single female, living in a city where the cost of living is high, my debt load was at an uncomfortable $15K and I wasn’t a homeowner yet. At this point I was 31, I had a university degree and a good job but I still found it hard to save enough money to pay off my debt and save for a house. Blah, blah, blah…this is probably many people’s story if they moved out on their own right away and into an expensive city. But what makes my story extraordinary is the ending, mainly because I chose a plan to get out of debt, create time and financial freedom, and I stuck to it and no, I didn’t marry rich! The mere fact that I stuck to the plan is what made it work, not the plan itself. Why? Today most people quit on their plans very early, some even before 60 days whereas my plan took 60 months. The average person will try something for a bit, if it doesn’t work immediately, they jump to another strategy only to get the same results. My plan took me exactly 5 years where I went from living from pay cheque to pay cheque to being a homeowner, debt free and boss free.
My plan was super simple – I did two things: 1) I chose a profit making vehicle that I could do outside of my full time job to generate extra income. It was a home based business in the network marketing industry and I describe it as a mini-franchise; 2) I partnered with a family member to buy a rental property instead of my original plan, a downtown condo. We pulled together our pennies and purchased a triplex. I moved into one of the units and managed the other two apartments.
With the rental property, we put most of the profit that we made each year back into the house so we could gradually bump up the rental income on the units as they turned over. Most people ask me if I have nightmare land-lord stories but I honestly don’t. I think if you have above average quality rental units, with reasonable rental fees you will attract respectful people. Fast forward 5 years, when the mortgage came up for renewal we shopped around and secured an amazing interest rate. This reduced our monthly costs and bumped up our profits. We were also able to pull out equity on the home which we used for any remaining debt like car payments and down payments for future properties. So instead of buying a condo I created an income generating vehicle from my first home purchase.
During this 5 year period, I simply worked my network marketing business for about 4 to 5 hours a week. It wasn’t a lot of time but I was very consistent about my efforts. Of course, I didn’t know if this strategy would work before I started but I was determined to keep trying which was my true key to success. The product I represented was a consumable in the preventative health industry. It was high quality and sold itself. After about 3 years, the profits from my business covered my living expenses so I decided to take the plunge to do the business full time. I had been tracking my efforts and results so I knew if I had more time I would be able to increase my income. I have been doing my business full time for 2 years now and my take home income far exceeds what I would have made in my full time job. The best part is that I own my time so I can do other projects like real estate or businesses ventures whereas when I was working full time for 1 company I was putting all of my eggs in one basket.
This past 5 years is what Seth Godin, North America’s #1 business marketer, calls “The Dip”. The dip is the long haul that it takes to get from beginner’s luck to mastery. It’s the daily consistent action to build a system that works. It’s getting through the dark times when you are alone and all you want to do is give up but something deep inside tells you to keep slugging away. It’s ignoring the naysayers and your “procrastinating side”. Then eventually, you come out of this long valley to see sunlight and you can touch and feel your ultimate goal. You are there! You are at the place where everyone else wants to be! But only the people who go through the valley will make it. Are you willing to go through the valley or would you prefer to be average?

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