There's something that always irks me when I read other real estate blogs and forums on the web. For some reason, a lot of people don't take part-time real estate investors seriously.
It's like there's this unspoken set of assumptions, and they usually come across like this:
“If you're not a full-time investor, you must not be good enough to make a living from what you do.”
“Part-time investors are just playing with a hobby. Full-time investors are the real heroes.”
“Want me to take you seriously? Stop being a coward and quit your job already.“
Of course, nobody will ever say it this to your face (unless they're really mean), but the attitude is out there. Have you encountered it too? I've sensed this sentiment from a number of people and it bothers me a lot.
I've actually heard these comments from a lot of non-real-estate people too. Unless I can tell someone about one of my BIG recent success stories (the kind where I've made five or six figures in one transaction), they dismiss me almost immediately… as if my part-time real estate gig is a pathetic attempt to make myself feel special.
I remember back when I started telling my friends that I was buying and selling vacant land on the side, most of them just didn't get it. Many of them responded with the same kind of obvious skepticism about what I was doing.
Without so much as saying the words, I would get this kind of vibe from them:
“Oh, that's cute! It'll be good to get this out of your system.”
“How sweet… that sounds like a happy little phase you're in.”
“Okay, whatever. Just don't ask me for money.”
Have you ever felt like people were just writing you off? Isn't it frustrating??
Knowing What Matters
When you or I try to pursue any kind of dream on a part-time basis, there's something inherent about our culture that causes people to dismiss our ambitions. And to be fair – it is an understandable bias.
Have you ever known a friend or family member who got sucked into an MLM business, trying repeatedly to get you to join their “down line”? We all know someone who got really excited and hyped-up about the latest fad business opportunity and most of us know how this pattern plays out. 99% of these “businesses” are just a flash in the pan – people quickly become disillusioned and throw in the towel.
So why would people look at our part-time real estate venture any differently? Especially when a new investor is still in the learning phase and they haven't closed their first deal yet – what do they really have to show for themselves? Why should anyone take them seriously??
First off – I shouldn't have to tell you that it doesn't matter what anyone else thinks about your part-time business. People can dismiss your ambitions all day long, but as long as YOU know it's a legitimate pursuit, the opinions of a few nay-sayers should be the least of your concerns (unless of course, they raise an objection that you truly can't answer for yourself… then you probably have something to think about).
If you know what it's going to take – then the rest of it is up to you. As long as you're going to follow through on what needs to be done, it's only a matter of time until you prove them all wrong.
Myths About Full-Time Investing
For some reason, there is a BIG negative stigma that the entrepreneurial community has towards jobs.
A lot of us talk about our J.O.B. like it's a curse on our life. We see it as one giant obstacle holding us back from everything good in life.
So let's start by dispelling some myths…
What does it really mean to be a full-time real estate investor?
Make no mistake about it – a full-time real estate investor is someone who is working. Full-time.
It's a person who has managed to replace their old set of responsibilities (aka – their J.O.B.) with a new, larger, more complicated, significantly more stressful set of responsibilities.
In essence, they've created another J.O.B. for themselves, replacing one problem with another.
For most people, being a full-time entrepreneur probably does offer a bit more psychological freedom, but it also comes with a much greater set of responsibilities and a HUGE potential penalty for failure.
I know several investors who have tried to be courageous and take this leap of faith, only to find that it was a leap of stupidity. They simply weren't ready to shoulder the financial burden that comes with a real estate investing business. They ended up on the brink of financial disaster, with no other option than to crawl back to a day job with a deep sense of shame and personal failure.
Now don't get me wrong – there is nothing wrong with jumping into real estate investing with both feet. I think it's a wonderful thing that is definitely appropriate for some people in some situations (depending on the nature of their business), but there are FAR too many people who do it for the wrong reasons, and they do it FAR before they're ready to deal with the consequences.
So before we go further, let's get a few things straight:
- Being a full-time investor doesn't mean you're successful.
- Being a full-time investor doesn't mean you're rich.
- Being a full-time investor doesn't mean you're financially free.
- Being a full-time investor doesn't mean you have more free time.
In the same way that owning a nice car doesn't make you wealthy, being a full-time investor doesn't offer ANY conclusive evidence that you've “made it” as a successful entrepreneur.
When someone touts their status as a full-time investor and you start feeling jealous, remember that you cannot judge a book by its cover. A person's employment status (or lack thereof) is only the tip of the iceberg of what's really going on in their financial life.
RELATED: Six Months After Quitting My Job – Here Are My Honest Thoughts
Part-Time Investing: The Smart Alternative
The problem is – a lot of people get duped into the idea that quitting their job is a prerequisite to success, but this couldn't be further from the truth.
There is absolutely nothing wrong with staying employed while you build up your real estate business. In fact, I'd argue that in most cases, it's foolish to do it any other way.
Phil Pustejovsky has some great insights on this subject…
As Phil explains – a J.O.B. is a GREAT asset to have as you're building up your real estate business.
When you have a job, you have a safety net that allows you to support yourself without relying on your next deal to pay your bills. This kind of built-in financial structure will give you the room you need to be patient and negotiate on deals without compromising on your price (whether you're buying or selling). When you keep this significant source of income in your life, it will be MUCH easier for you to avoid making stupid decisions out of desperation.
A job will give you sustainability and “staying power” while you're between deals, allowing you to focus on building your dream WITHOUT laying everything on the line in the process.
“In almost all cases, it's a TERRIBLE idea to quit your job until you're making more money from real estate than you are from your job.” – Phil Pustejovsky
Yep. I couldn't have said it better myself.
RELATED: How Much Should You Save Before Quitting Your Job?
Time Management Is Everything
Some investors believe that part-time investing doesn't allow enough time to pursue their business. If you fall into this camp, chances are more-than-likely that your real problems have more to do with time-management than anything.
Let me hit you with some facts:
- For the first eight years of my real estate investing career, I worked a full-time job that consumed 45 – 60 hours per week.
- I have a wife, two kids, friends, and a family – all of whom consume significant portions of my time on an ongoing basis.
- My part-time real estate investing business requires several man-hours each month (and I've drastically reduced a lot of this busy work over the years).
- I own a growing and profitable portfolio of rental properties (and I've outsourced the management of these properties to other people who are far more competent than I am).
- I've managed to keep up with this blog almost every week since 2012.
I'm sure you're busy, but don't tell me you're short on time. I am walking proof that you can accomplish HUGE financial goals without quitting your day job. It's called “prioritizing” and knowing how to get things done.
The beauty of part-time investing is that it allows you to dip your toe in the water and use it as your testing ground.
What if you find out you're a terrible real estate investor? What if this business just isn't meant for you? What if you picked the wrong strategy and you fail miserably? Isn't it better to know these things before you quit your job?
“Quitting a job doesn't jump-start a dream because dreams take planning, purpose, and progress to succeed. That stuff has to happen before you quit your day job.” – Jon Acuff
What Full-Time Investing Means
Running a business is a huge responsibility.
Seriously – it's a big deal.
As a full-time real estate investor, you're going to deal with a lot more stress than any 9-5 job will ever bring you, so if you want to take the plunge and quit your job, you'll be far better served to pace yourself and make sure you're betting on a sure thing before you take that leap of faith.
For most people, the decision to quit their job is a major risk, but it shouldn't be this way!
If you leave your job without a plan, without a secondary source of income, and without any proof that you know what you're doing – you're going to regret it. It's just that simple.
Leaving your job shouldn't be a big financial and psychological jump. It should be a natural walk into the next phase of your life.
Don't lose sight of what you can still accomplish as a part-time investor.
A job is a gift. Even if you hate what you're doing and don't feel like it's your life's true calling, it's still a golden opportunity to get your bearings and figure out what you're doing. Use it to build a sustainable business and get your house in order before you transition into early retirement.
“I know sometimes it's scary to think that you might do the wrong thing. It's terrifying to imagine wasting your “one shot”. But let me assure you, nothing you do will be wasted. Every decision you make, every path you take, has the ability to contribute something you need to succeed at your dream.” – Jon Acuff
Can you get there? Absolutely… but like all good things, it isn't going to come fast or easy.
Just speaking for myself, I don't ever plan to become a full-time real estate investor. That's not why I'm in this business.
I'm in this business to create passive income (i.e. – dependable paychecks that will last a lifetime, regardless of whether I continue to work for them).
This is my end game, which means full-time investing just isn't in the cards for me. Not because I can't do it, but because I'm choosing not to do it. I already know I can get the job done part-time, so why take the unnecessary risk of leaving my job prematurely?
If you're someone who has already transitioned to full-time investing through real estate investing or some other business endeavor. Good for you. Keep at it! If you're enjoying your life and love what you do, then full-time investing probably suits you well (and you certainly don't need any advice from me on this subject).
If you're tempted to quit your job simply because you can't stand it (and it's easier in the short-term to make the emotional leap into a business that isn't ready to sustain you), don't do it. Be patient and fight the long fight. Your time will come soon enough… and when it does, it will be even sweeter because you'll be ready for it.