Maybe your next level includes more free time to spend with your family. Maybe you want to drive a fancy car or go on exotic vacations. Maybe you want time on the golf course or time skiing in the mountains.
All of those things are the result of having financial freedom. And freedom is a cash purchase. Your ability to be able to walk away from any situation is tied to money. Your passive income, assets, and business provide you with that freedom.
How do you reach that freedom? It’s about setting goals. And I’m not just talking about a general goal of having more money. I could give you $10 and you would have more money. No, you need to know exactly what financial independence looks like for you at the next level.
You’re going to become what you think about every single day. And if you’re thinking about vague and general outcomes, guess what... you're going to get vague and general outcomes. And even if you achieve those general goals, as soon as you see some success you’re going to fall back into your old habits and lose your momentum and drive.
The only way to stay motivated and continually try new things is to constantly be thinking about what your life looks like at the next level.
So I need you to grab a pen and piece of paper because we’re going to take seven steps to eliminate the real estate roller coaster and move straight to the next level.
Step 1: Review Your Previous Year
At the end of every year, look back at the previous year and ask three questions:
- What did I do well in the last 12 months?
- What was I doing well that I stopped doing?
- What negative habits have I developed that are keeping me from achieving my goals?
Look back at the last 12 months of your personal life, your relationships, your career, and your money goals. What have you done well? How have you moved your life to the next level? Write those things down. Give yourself some credit.
Inevitably, what I find in my own life is that there are things that I do well and, for some crazy reason, I stopped doing them. For example, I run a marketing campaign that’s really working. I keep trying to optimize it, and eventually I screw it up and it stops working because it looks nothing like my original campaign. Look for those things that were successful that you’re not doing anymore.
Then, ask yourself what negative habits you’ve picked up that are keeping you from your life at the next level.
If you’re going to get to the next level, your mindset has to totally change. Unless you’re thinking about your life at the next level all the time and focusing on what it’s going to take to get there, you can’t achieve that next level outcome.
Asking these three questions will help you to think big and execute your plan to reach your goals.
Step 2: Set Goals
The next step after reviewing your previous year is to set massive outcomes. When you write these outcomes down, they should be so massive that you’re not even sure how you’re going to accomplish them.
If you want to have a $6,000,000 house on the beach, write it down, even though you have no clue how you’re going to accomplish it. Why? If all you’re thinking about is that $6,000,000 house on the beach, eventually it’s going to come to pass. If that’s all you’re thinking about all the time, little setbacks, little problems will seem like such small challenges that pale in comparison to your goal.
Don’t just set a goal of having a million dollars. If you’ve got a million dollars right now in cash or assets, it’s a joke. It’s not big enough. If you earn an 8% conservative return, that’s $80,000 a year. After you pay taxes, you’re left with $50,000. And who care about making $50,000 a year? That’s not big enough.
It’s not all about the money, either. I break my outcomes down into four categories:
- Contribution/Giving Back
What personal outcomes am I looking for? One of my personal goals is to have energy that I can spend with my wife and kids. I want to keep up with my kids as they get older and become teenagers. I want to have old man strength. That’s one of my goals.
The next outcome that I want is in career/business/money. Complete and total financial independence should be one of your goals, and it has to be a specific goal. We all got into real estate for passive income. What does that look like for you?
You might flip single- and multi-family properties for income now and hold commercial assets for long-term wealth. What does that long-term income look like for you? Focus on the income from it, not the number of properties. It’s not about how many doors you own, it’s about how much income those doors make for you. So what does complete and total financial independence look like for you, and at what age?
Let’s be realistic here. What you can say is, I’m going to make $______ this year flipping properties, and I want to be completely financially independent by age ____.
I know my number. I know what financial independence looks like for me now because I already have it, but I also know what financial independence looks like for me at the next level and I know the date and the amount of money that I want. I look at those numbers every day. How about you?
Life is all about experiences. You’re not going to take anything with you to the grave, except your experiences. What adventure goals do you have? What experiences do you want? My rich friends and I don’t talk about how much money we have. When we get together, we talk about the things we did, the new cars we bought, the places we took our wife and kids, the oceans that we swam in, the boats that we were on. That’s the stuff you cannot replace.
Finally, what are your contribution outcomes? What do you want to give back? Again, think big. Get out of the mindset that you just want to take care of your wife and kids. That’s your obligation. That’s not a goal. Get beyond that. Maybe it is family-related but outside of your immediate family, like retiring your parents or sending a special needs niece or nephew to college. Or maybe it’s community-based, like paying off $10,000 worth of other people’s layaways at Christmastime. We’ve done that. It’s an amazing experience. That is a real goal.
Your outcomes have to be big enough that they make you nervous and create drive and ambition. If you set a goal and you still go back to your old habits, it means you didn’t care about that goal or it wasn’t big enough.
Step 3: Commit and De-commit
When you commit to an outcome, you also have to de-commit to things that are not in line with that outcome. You may have to sever some relationships. You may have to de-commit from certain responsibilities. My dad, who was a successful businessman, was asked to be on the board of a local private high school. My dad committed to being on the board, but within three months the meetings were moving so slowly that he couldn’t stand going anymore, so he de-committed right away.
If your family doesn’t share your drive or there’s something that you’ve committed to with a friend or an organization and it’s no longer in line with your goals, you need to de-commit. Everything in your life needs to be pushing down a certain path.
That doesn’t mean you sever all ties. I’ve got a group of high school buddies that I love to play golf with. But we’re not on the same path, and so I see them less and less often. And that’s okay. And as for family, they’re your family; of course you need to spend time with them. But it’s okay to spend less time with them or mostly see them on holidays.
Step 4: Create a Massive Action Plan
Your massive action plan needs to be based on what you know right now. You don’t know what you don’t know, so just go with your gut and establish a plan. But that plan needs to be flexible. Then work on that massive action plan until you hit your outcome.
Let’s say your original goal was to have $250,000 a year of totally passive income. And maybe your first goal is to go buy 100 rentals, but then all of a sudden maybe a mobile home park or a 100-unit apartment building comes into your pipeline. Are you going to turn those opportunities down because they weren’t in your action plan? Absolutely not. The whole point of your action plan is to meet your goal, so if you find a better way to reach that goal, go for it.
And don’t stop until you hit your outcome. People fail when they say, well, I’ve got this big goal, but if I try this marketing campaign and it doesn’t work, then I’m going to quit. If you say that, then you deserve to fail. You work your massive action plan until you hit your outcome, and you don’t stop halfway or when it becomes difficult.
Step 5: Take Massive Action (Every Single Day)
I don’t have some massive to-do list every day when I wake up. I don’t have a planner. I look at the big picture and I say, what are the couple of things right now that I’m going to enjoy doing today to help me get to my goals?
If you have certain goals or certain outcomes that you want, but the things that you’re trying to accomplish are small, rigid, and stressful, you’re not going to want to do them. So I don’t wake up with some app on my iPhone that’s got all my tasks. I don’t wake up with some calendar that’s booked solid. My most favorite days are those days when I’ve got nothing on my calendar and the night before I can look at the big picture and say, tomorrow when I wake up, I’m going to work on this because this sounds fun.
Maybe it’s a marketing campaign. Maybe it’s calling private lenders. I don’t go to bed with a list of 24 things I’ve got to do in order. That’s so boring.
Step 6: Celebrate Every Step of the Way
When something goes well, celebrate that. Have fun with it. Reward yourself.
When you close your first deal, don’t just deposit the check in the bank and then go back to work. Take a day off. Go out on the golf course or go for a boat ride. Take your family to some expensive restaurant. Go buy yourself a Rolex. Do something that’s exciting.
It’s not about just flipping a house or making money. It’s about what that money provides. It’s writing a check for financial freedom. You are one step closer!
Step 7: Be Aware of Complacency
If you find yourself hitting your goals but losing your drive, or if you find that you’re not working very hard anymore, it’s because your goals are too small.
When you lose your ambition, that means that whatever you’re doing, whatever you accomplished, it doesn’t get you going anymore. There’s got to be something new, which means you need to rethink your life at the next level.
If you’d rather go do something else, then go do something else that gets you fired up. You’re not going to achieve anything unless you can do it with passion.
Be aware of complacency. If you feel complacency setting in, set bigger goals and celebrate what you’ve accomplished. Don’t let yourself fall back into your old ways.
Eyes on the Prize
There are going to be times when you think you don’t want this real estate thing. There are times when something goes wrong. Maybe a contractor deal falls through. I just let it roll right off my back because my goals are much bigger than that day’s problem or that day’s success.
If you can keep your focus on your specific, massive goals you’ll be able to push through those discouraging days. You’ll be able to find that passion that keeps you going.
So get off the real estate roller coaster and start working toward your own audacious goals and financial freedom.
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