The Key to Passive Wealth with Real Estate
Passive wealth with real estate largely boils down to understanding and properly valuing your time. Let’s talk about why and how to understand your time’s value.
Time is your most precious, most scarce, and most limited asset. You can get more money, but you can never get more time.
You, me, Jeff Bezos, Elon Musk, Warren Buffett – we all have the same 24 hours in the day.
Most investors understand that to some degree, but may not know how to turn that knowledge into systems & actions to help us get more time and earn more money. Here’s how. This is a key insight that helped me scale my real estate portfolio and get my head above the waves.
You can utilize the time of others by hiring, outsourcing, and leveraging their time.
Sounds simple, but most investors never make the leap because they don’t understand the value. They think paying someone is a cost.
In fact, paying someone and taking a task off of your plate gives you more of your time back.
Time is your most precious asset.
Here's the key: understand the value of your time in real dollar terms. Let's do a little exercise...
Let's do a little exercise...
Let’s say you’re a W-2 employee, earning $250,000 per year and working 50 hour weeks, 50 weeks a year. That’s 2,500 hours per year, so you have valued your time at $100/hr. You’ve valued your time that way because that’s what you’re already selling it for.
Now, shift your mindset and remember that your time (all of your time) is worth at least $100/hr. So instead of taking 5 of your non-W2, spare hours per week to manage your rentals, think about whether you can hire someone to handle those tasks, but pay them less than $100/hr.
Now let's apply that methodology to our real estate investments.
Whether it’s showing a property to new tenants, mowing lawns, handling repairs, or something else along those lines, instead of costing yourself $100/hr by doing it yourself, save your most precious asset (time) by hiring someone to handle those things for you.
Ideas of tasks to hire someone else for:
- Tenant Screening
- Rent Collection
- Turnovers
- Accounting & Tax Filing
- Lawn Mowing
- Property Maintenance
Focus on the bigger picture - hire someone to handle tasks at your rentals
Getting your time back by understanding its value means more time for what’s really important – time with your spouse, kids, parents, supporting charitable causes, and so on. Your real estate investments shouldn’t be another job, they should support the things that truly matter in life.
Your real estate investments should support your lifestyle & improve your quality of life. They shouldn’t be another job.
