A young real estate agent I’m mentoring said to me the other day, “Tim, I want to follow in your footsteps. What is the ONE THING I should concentrate on to ensure that happens?”
My answer to her may surprise you. I said, “If you want to be financially free, then you have to play really tight financial defense.”
She looked quite puzzled and asked, “What do you mean?”
I replied, “I’ve seen MANY Realtors and other business people do really well and not have anything to show for it over time.” I told her about the agent I coached years ago that said she made $700K per year and spent “somewhere” between $600K and $900K per year to make that!!!
What??? Yes, that IS a true story.
She had NO IDEA WHAT SHE SPENT PER YEAR and yes, this is an over-the-top example, but it does make my point.
Let me put it another, more normal way. What I’ve experienced is when someone’s income goes up their spending naturally increases along with it. So when they are making $30K per year and don’t have much, they live within that. Then their income goes to $50K and the expenses go to $49K; $100K in income, and they spend $97K. They are simply not playing “tight defense.” With this pattern you will never get ahead. I’ve actually seen a lot of people go bankrupt as their earnings surged because they WAY overspent.
The people I’ve seen that have started with modest means and accumulated wealth over time have done a few things right (besides inheriting it).
1. They increased their income over time.
2. They created a monthly budget and meticulously watched where they had “leakage” and fixed it.
3. They avoided big debt, except appreciating assets.
4. They chunked off their “bad debt.”
5. They learned how to invest their profits wisely.
Sure there is a lot of other important factors involved in “getting somewhere” in life.
You MUST deliver great service. You must learn your trade. You must “play nice” with those you come across on your journey.
However, if you want a life of leisure and luxury someday, there has to be some sacrifice along the way!
“D” UP my friends!
~ Tim Rhode
Tim would tell you that he got off to a slow start. After growing up in the rural town of Portola in Northern California and barely graduating high school, Tim Rhode found himself at the age of 25 working as a grocery clerk with two young children to provide for.
He eventually found his “niche” selling real estate; and from 1986 to 2000, he sold over 2,500 homes and from 1997 to 2006 he invested in over 100 properties. Tim focused on saving money, keeping his expenses low, and playing solid “financial defense” which allowed him to basically retire, and he was financially free at the age of 40.
Not wanting to play hike, bike or ski all day, Tim threw his energy into his true passion: helping people thrive and live their most fulfilling life. He founded the nonprofit 1Life Fully Lived to help people of all ages gain the tools and skills they need to thrive and also co-founded GoBundance, a high-level mastermind, with David Osborn, Pat Hiban and Mike McCarthy to help healthy, wealthy, generous people lead epic lives. We have a women’s tribe now!
Tim has also authored numerous books and has been featured on a variety of podcasts and media outlets. He now lives near his children in the High Sierras with his wife and dog.
You can connect with Tim at www.TimRhode.com.