3 Habits to Cultivate to Get Rich at 30 – or Sooner

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After I bought my 30th investment property in 2008, I considered myself financially retired with more than $20,000 per month in cash flow.

I didn’t arrive at financial retirement at such a young age due to my family wealth. I grew up poor in a dusty, small town in south Texas, and my folks sometimes chose between paying the electric bill or buying groceries that week. Most of my families still are blue collar $12 an hour laborers – mechanics, electricians, plumbers.

After college, I wasn’t any better off than they were. Saddled with $40,000 of college debt, I set my sights on real estate investing in San Antonio, Texas.

Over the next 10 years, I learned three important habits that enabled my real estate portfolio to multiply from one house, to five, to 10, 20 and more.

Whatever your industry – real estate, music, aerospace or textiles – your chances of retiring years before your friends or family will soar if you do these things:

#1 You Work Tirelessly

To be successful in any field, there is no substitute for applying maximum amounts of effort during every waking moment. Many high-performing CEOs report that they wake up at approximately 6:15 am, and often clock 18-hour days.

I am here to tell you that those CEOs are dead on the money. In my first five years in real estate investing, I clocked more 18 hour days than I can remember.

Most days were packed with calling dozens and sometimes more than 100 people, looking for capital to borrow to buy more houses. I never gave up. Sometimes I would have to talk to a chain of 10 people before I found the person who had $50,000 to lend at 10%.

Lesson: Be the first one in your office and the last one out. Work while your competitors are sleeping.

#2 You Reject Popular Thinking

As John Maxwell writes in his best seller How Successful People Think, high achievers think differently. Specifically, they reject popular thinking and go against the grain. Sometimes it may be uncomfortable, and that’s ok.

In my case, I completely reject the notion that real estate investors should buy nice houses in nice neighborhoods.

Local investors in my city know me as the ‘junk house guy.’ I buy for cash flow and for price. Condition of the asset is mostly irrelevant. I also only owner finance my houses, instead of renting, so I minimize my upfront repair and ongoing maintenance costs.
I see the value in investments that many others fail to see, and I developed a business model that took full advantage of this fact.

Here are two examples of how I have reaped six figure profits in a year on deals that other investors rejected:

#1: $15,000 Junk House Made Me $14,000

I once bought a junker 3 bedroom house for $15,000 that no one else wanted. A month later, I sold it for $20,000 to another investor for a $5000 profit. He then sold that house with owner financing at a 12% profit per year, and he’s bought three other houses from me since. I’ve made about $3000 on each of those deals. Bottom line: $14,000 profit on a house the conventional investors rejected.

#2: I Bought a Tiny, 1 Bedroom ‘Rejects’ and Made 11% ROI

I often buy 1 bedroom, 1 bath houses. These are houses that virtually no other investor in my city wants. I buy them 30% under market value or more, and then I add one or two bedrooms. Then, I sell it owner finance with $3000 down to a blue collar worker with a steady job. I make 11% or 12% a year on those deals.

Lesson: Reject conventional thinking. Embrace opportunities that others run from and don’t see. It can make you millions of dollars.

#3 You Surround Yourself With Positive, Focused People

Noted positive psychology researcher Barbara Frederickson performed fascinating research that showed the benefits of positive thinking on our brains. In her study, she created five research subject groups, and showed each one different film clips

The first two groups viewed movie clips that generated positive feelings and emotions, such as happy couples with their children. Group 3 saw images that were neutral – this was the control group.

The last two groups saw film clips that created negative feelings and emotions: people arguing, children crying etc. Afterwards, each group was asked to imagine themselves in a situation where they would have feelings similar to the clips they saw. They were asked to write down what they would have done.

Research subjects who saw negative things wrote the fewest answers. Subjects who saw happy and positive images wrote down many more responses.
Her research showed that when we experience positive feelings – joy, happiness, optimism, love – we open ourselves up to more of life’s possibilities. Positive emotions open your mind to more possibilities.

I agree with Frederickson’s findings.

When I first entered real estate, I was 23 years-old. I had college debt and little money. My goal was to make $1000 per week. Back then, that was mind-blowing money to me.

As I got deeper into real estate, I found experienced real estate investors who mentored me. They had much bigger goals. They wanted to make $10,000 a week, $20,000 a week. $50,000 a week!

These mentors were extremely positive, encouraging, and focused on becoming wealthy. I saw them reaching their goals with joy and enthusiasm, I realized that I could do it, as well. They also taught me to reinvest most of my real estate profits into more houses. That reinvesting made my portfolio grow much faster.

They also urged me to become an expert in the local real estate market and in negotiating under market value deals. I spent years studying my neighborhoods and today, I can usually know the value of a house in my zip codes without comps.

They taught me to be patient in building wealth. That is, focus on making small profits on multiple deals, not home run profits on one deal. I learned from my positive mentors how to flip houses and make $5000 per deal. I’d then do 50 houses in a year and make $250,000. That’s serious money here in Texas.

Lesson: Mingle with positive, goal-oriented people, and their positive emotions, energy and ideas will rub off on you.

No matter your station in life, you can apply these lessons to your benefit. And they can lead to incredible happiness and wealth. Just remember to pass on these positive habits to others, so they can reap the harvest, as well.