Stepping off the Hamster Wheel, Part 2

After my thread on re-thinking success I got a bunch of DM’s asking what I'd do differently next time.

Here’s a simple 3-step framework that I'd recommend to the younger me for building true wealth, which I define as...

... 1) having predictable income to support a great lifestyle *plus* 2) control over your time.

STEP 1: “The plan is nothing, planning is everything.” – Dwight Eisenhower

Your goal is financial nirvana, where the things you own generate income that is greater than your living expenses. This gives you financial certainty control over your time.

For decades we’ve been taught that the only way to achieve this is to save until you hit a big 7 figure number and then, at age 65 or older, you’re free to live the good life.

We need a reset on that.

The current paradigm is built on savings when it should be built on *income streams*, which can be built much faster through smart use of leverage.

Now that we know the destination, now we need a plan to get there...

I’m not big on detailed plans because they quickly become outdated. But the *process of planning* is everything because it forces deep thinking and hard choices. Having a clear goal and roadmap makes it possible to measure progress and course-correct along the way.

Right off the bat we know that you won’t spend your whole career in a corporate job so your current job is just a means to an end. Just recognizing that can feel liberating, like you’re already gaining some control.

I highly recommend finding a mentor - someone who already has the life you want - to help you create your roadmap. Financial planning is an important part of this so if that’s not your strong suit then you’ll need help.

Don’t be afraid to ask for help, even if it’s a stranger. You might be surprised how willing, even eager, successful people are to help others.

Finally, at risk of getting too woo-woo, you should surround yourself with positive, encouraging people who, like you, want to grow. This means removing toxic people from your life. It might even mean relocating to a City on the Rise (see link at the end of this thread).

Think of it like a garden and you’re a seed. You want to be planted in fertile soil without weeds to steal your nutrients. This is something I wish I had been more mindful of earlier in life.

STEP 2: “Waiting is the hardest part” - Tom Petty

A journey of 1000 miles begins with a single step. I’m a fan of baby steps & consistency - we tend to overestimate what we can do in a month but underestimate what we can do in a year.

Your goal is to eventually stop trading your time for money by being an *owner* of income-producing assets. However, it takes money to make money so you’ll need to use your job (or gig work) to save money for your side hustle.

I recommend a 3 year savings period (maybe longer if you need to get out of debt first). There are many resources out there for cutting expenses and saving money so I won’t go into that. Get hardcore and try to save 20%+ of your take-home income. You’re looking to save $40-100k+.

Saving is hard because it takes patience and sacrifice. But progress is measurable and incredibly satisfying - inching toward your goal will feel better than driving a fancy car or wearing expensive clothes.

STEP 3: “I don’t gotta dance, I make money moves.” - Cardi B

Now that you’ve done the hard part you’re ready to make money moves! Almost everyone who has achieved financial freedom has done it through *levered investments*.

The most common levered investment is a house. I wrote a long thread about this (link below) so I won’t go into details. Most experts agree that the 3 best levered investments to start with are:

1. Buy a house or condo w/ a mortgage - It could be the home you live in or, even better, one that you can rent to generate income.
2. Buy a 4-plex w/ an FHA loan - Live in one unit and rent the rest. Many smart people think this is the *fastest & most certain path to wealth*.

3. Buy an existing small business with an SBA loan - Done right, you can buy a business with strong cash flow with very little money down. This is much trickier than buying real estate so proceed with extreme caution.

These are the best levered investments because you can access cheap loans and *the system is set up to help you succeed* with less risk than other types of investments.

This brings me to 2 super-important points:

1. Educate yourself! Whatever your game plan, you need to become an expert. Your education *is* your side hustle while you’re saving money. Twitter is a great starting point - you can learn from the best and people share details of their own deals.

2. Be honest with yourself. This journey isn’t for everyone. It involves a ton of work, some risk, and plenty of highs and lows. TBH most people don’t want that responsibility and are better off following a standard career path. Search your soul and decide if this is for you.

My DMs are open if you have questions. I'm especially interested in helping POCs and single moms get ahead!

I've provided a few links below to help get you started.

[Final Note: This thread is a mashup of my own thinking with ideas from many smart people on Twitter.]

Part 1 of this thread:
https://twitter.com/Camp4/status/1346542413536325642

Buying a home:
https://twitter.com/Camp4/status/1339689320781758466

Buying a 4-plex:
https://twitter.com/twbuilds/status/1332807426056335366 https://twitter.com/moseskagan/status/1345422803726553094

Buying a small business:
https://twitter.com/laughridge/status/1282605728226783234

https://twitter.com/evanmr/status/1348407820673183745?s=21

Moving to a City on the Rise: https://twitter.com/Camp4/status/1341415963359473665