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The chief investment offer at Bigger Pockets really enjoyed his conversation with one rental at a time. And let me just say, folks, your comments were really heartfelt and very positive. So we got Dave, my, or back. How you doing buddy? Good.
Seriously, thank you so much for having me back and for all the nice comments on the last video. I'm excited to be here again. Well, I've got a kind of heady question for you, one that may put you on your back foot for just a second. I'm sure you can handle it. And that is what does success look like?
That's kind of a broad question. But let's see where we take this one again. What is success? Wow. Okay.
My head is going in a couple of different directions. Do you mean specifically as a real estate investor, are we going real meta? Like, let's do let's let's start where we are in real estate first, right? Okay. As a real estate investor, and if we have time, we'll go kind of met on it.
But let's start that. Alright. Well, I guess I would start by saying that it's a very personal question. So I'm not sure there is a universal answer to this. And some people want to be tycoons.
Other people want three rentals and to use that paid off and to support their retirement. And I think both are viable as long as it's authentic to you. The thing that bothers me is when people prescribe some sort of outcome as the only way, like thousands of units, thousands of doors. That's what success is like. I can tell you that is not what success looks like.
Maybe it's easier to say what it's not. I personally like this concept. I don't know if you Morgan Howl's will he was at BP con, but he talks about this concept a lot. And I really like it. It's a return on not just return on time, but return on.
Lifestyle like just thinking about how do you grow and get better and feel that fulfillment without necessarily lowering your quality of life. And to me, that's what success looks like is can I optimize for the best possible life? And for me, part of that is real estate, what goes on in my portfolio, but most of it is the other stuff. And so I sort of just think a lot about what do I want to what do I want my days to look like? What do I want success?
You know, what do I want my life to look like? And then I sort of back into what kind of real estate portfolio supports that idea. So just as an example, I don't want to have a lot of stress in my life. I don't think anyone does, but people take on flipping projects. Those are stressful.
People take on syndicating and raising private capital from people they don't know. That is a nightmare to me. I would be so nervous about losing other people's money. I would never sleep at night. So I never do those kinds of deals.
My definition of success, like what I look for is like, how do I have time for the things that are important to me, which are spending time with my friends and family. I really like to travel a lot. And I like going on adventures and like adventures, can mean different things. They could be business adventures and they could be travel adventures. But I like some element of a calculated risk in my life.
And those are the things I try and optimize for. And I've built a very deliberate portfolio that allows me to do those things. And I guess maybe now we're getting heady about it. I think I've been that means unsuccessful because I do get to do the stuff in my life that I like. Even though my I wouldn't say my portfolio in terms of quantity of doors would rank even among the top 50 or 100 real estate influencers out there.
It's probably much smaller, but I bet I sleep better and I like that. Yeah, I think there's a couple of threads I want to pull on there. And the first one kind of open with I jotted down, which you got to know thyself. I think a lot of people that we talk to, right, kind of the newer real estate investors, they almost suffer from repeating what they hear other people say. Like, how many units you want? I want 100. How many do you have? Zero.
Like, where do these round numbers come from? It's never a round number. And that just tells me you're probably telling me what you think I want to hear as opposed to really diving in and knowing what you want. That's exactly right. Yeah.
I wrote a whole book, start with strategy. This is the whole idea is that this guy came up to me once at VPCon and he was like, sort of apologetic and sheepish and was like, Oh, I'm sorry. Like, you know, I have a serious question to ask you, but like, I'm new. I only have 39 units and I was like, are you kidding me? You have to have a new unit.
It's like, what has happened in this industry where you think that you're a beginner or somehow having accomplished something? That's a shi. It's a travesty, honestly. Like you should be shown on yourself if you if you own 30, not provided that they're good. You know, they're crappy, but like, that's amazing.
You have accomplished something incredible. And I think that's it's just the culture of real estate investing over the last 10 or 15 years is like sort of created these unrealistic expectations and optimizing for the wrong thing. Well, I think I think we are both fixing that right now. Bigger pockets in one rental at a time, coach Carson. There are some of us out there really trying to focus in on, you know, know thyself what's right for you.
And again, 39 units is amazing. I would tell you four units is amazing, right? My 100%. Yeah, I agree. Yeah, know thyself.
Know what you want. I think so much of it is, you know, I talked about this at VPCon too, but so much of it is that this we've come to this idea that the only measure of success is retiring and quitting your job. Like that is what we've decided collectively as this industry is that it's a binary vision of binary evaluation of success. Like, have you quit your job? Yes, you're good.
No, you're not successful when I've literally never wanted to quit my job. That has never been a part of why I got into real estate investing. And I think the bigger, the worst part of that is that you miss the very obvious point that every deal you do makes you more financially independent. It is it is a scale and hopefully you are moving forward on that scale every time you make any financial decision. To be honest, sometimes you're going to go backwards.
That's just how that just happens. But that should be the goal is just to keep moving forward, not to like reach this like imaginary whole round number. Like you said, which you're going to get there and then you're going to be like, now what? You know, it's not going to be fulfilling in the first place. So I think just seeing, you know, it as a journey is a much more important way to frame this than as like a sprint to the finish.
Yeah, one more one more thought on that. And then we'll go to my second thread that I want to pull on is I see a lot of folks comparing their year one or year two to my year 25. And frankly, that's not very you or fair to me, right? Yeah. Yeah.
Yeah. Yeah. That's like you shouldn't be looking at me after, you know, 17 months of the business and I've got 25 years in the business. Yeah. Right.
Multiple cycles. It's not a fair comparison. Again, for you or for me, I would hope I'd be farther ahead after 25 years than 17 months. That's right. Exactly.
It's just there's so many different things. Your own skill level, your own knowledge of the industry, your connections, which is where, you know, your network just get better. And if you just see this as a lifelong pursuit, financial independence is a lifelong pursuit, then it takes a lot of the pressure off, I think, to say like, oh, I have X number of units in three years or I have to do this by next year. You really don't. You really don't.
You just need to like keep this in mind and keep progressing towards the same in the long term. But it is hard. It's hard to pursue things that take a long time, but it's still, it is very worth it, in my opinion. Yeah. Well, we're going to go to the bigger pockets keynote that just happened in Orlando, one of the only coach Carson, one of the slides he put which I did take a picture of was an exercise he did.
I think all of us should should kick around at some level. And that is define what your perfect day looks like. That's right. Yeah. That's exactly right.
Yeah. Right. Yeah. From coach from memory, coach talk about playing basketball. He talked about hiking, spending time with family.
Again, a lot of the things on his list did not cost money, but they did cost time. That's right. And right. So sit down with your significant other, make sure you're on the same page. Right.
What does the perfect day look like for us together? Have those there. They might be a little uncomfortable, but they should be so much fun. Yeah. I totally agree.
Is this whole concept of life design is probably the most important thing you can ever do in your whole life and no one does it. And I'm guilty of this too. I'm not trying to like preach and say that I'm amazing at this, but I've there are times in your life when I think it really makes sense to take a step back and be like, am I even doing the things that I want to be doing? Am I just, you know, what the heck am I doing? Yeah.
What am I living for? Exactly. Like I've done this a few times in my life right now being one of them. I, you know, I have a three month old. So I recently became a father.
It's a time of reflection. You sort of decide, you know, what do I want to do for the next 10 or 20 years? How much time do I want to commit to different parts of my life? But I think it's true. We've been not being a parent.
There are times, you know, when you are right out of college, you have to decide, like, are you going to go for career? You're going to maximize funding or twenties. Both are finances or consequences to both decisions, but times to do that. And I recommend people do it at least once a year and just really think about it. And that's the beautiful thing about real estate is that it's so customizable.
And that can be daunting. But if you have a clear idea of what you want your days to look like and what you want your life to look like, as long as they're within reason and they're not just like total pie in the sky nonsense real estate can do it for you. You can back into the kind of portfolio and the kind of business that you want to create, but it does take that thought up front. But I will just say this, if you spend the time up front doing that, I promise you every decision in your life will become easier and I'm not really at real estate. Like I had this, I, you know, it's probably eight years ago, bigger pockets hired me an executive coach because I was, you know, 27.
We got pop by private equity or trying to be professional. Yeah. Yeah. Yeah. And so it was great.
It's a woman I'm so close with my coach. She's great. And she like, I was just, you know, complain about stuff and be worried and anxious about stuff. And she made me go through this exercise of like defining my values, which is really just a more woo woo way of saying like, what do you actually care about in life. And I was like, this is so dumb.
Like, can we stop? Like I have some real problems I need to solve. Like I got to go give a performance review. I got all this stuff. And she was like, can you just please do this.
I finally relented. And ever since then, every decision in my life, whether it was I moved to Europe, I moved to different places, you know, different professional opportunities, different investments, you can refer back to these things and you're like, is this decision moving me closer to the things I really want or the further away from the things that I really want. And honestly, it's just, it gives you so much clarity about your life and it took like two hours. It really is not like the topic of it. I probably spent more time protesting doing that actually took to do it.
Yeah. You know, one of the things, so again, at the bigger pockets of it, Orlando, I talked about was I gave people homework, basically called exercise, but let's be clear, it was homework. Yes. And I said, go figure out what your life costs. It's amazing how many, how many people I ask, like, what is your life cost?
What's your monthly not like, do you even know what it cost to, you know, to be you? And yeah, most people don't, they don't, I don't have 90% of people don't 90% don't know. And by the way, when they guess, they always guess low. Yeah. They're more frugal than they are.
Yeah. And yeah, I think that exercise 100% I, you know, I, I am like someone who talks about personal finance for a living and I didn't have a budget until last year, like I never tracked it. That was just something I never wanted to do. And now I have Monarch, which I think is super useful. Whatever the tool is, there's a million of them.
So much more expensive than I thought to, you know, like, and it's just the little things creep up because you forget the one time incidental expenses and it's so easy to just be like, okay, here's my housing costs, here's my health care and my car and whatever. And you forget all the other stuff and it adds up and man, getting a handle on that makes again decision making very clear. Yeah. So I gave people two homework assignments. One was with regard to life costs, but the other one was even more important, at least it was for Libby and I is I had individuals or individuals first and then if you're in a couple, you would have a couple of people who were in the middle of the day, you would have a couple of people who were in the day.
So I would do it together after, but you do it individually first and that is go through the list of expenses and write down what was a need or a want. Yes. Yeah. And Olivia and I did that. We were we were just like everybody else at 30 years old.
We were spending every penny that came in, you know, didn't think about it, didn't save anything. We did that exercise and over the next 18 months, we were living on 50%. So, yeah, we, you know, again, that was a journey, right? We sacrificed for 10 to 12 years. Like very few people would.
It was hard, but I'll give you a little tip. One of the things that we did at year five, because again, we're in it now. We're sacrificing. We have no wants, you know, it's not like we're not eating food. We're taking care of our needs, but no one.
So live in, I sit down. One of our birthdays, I don't know. It was hers or mine. And our thing was always travel. We want to go travel with and we obviously weren't because travel is expensive.
So what we did individually is we created a top 10 list of travel individually. Where are the places we want to see? And then we came together and we made a couple of top 10. Right. So she would pick one.
I would pick one, you know, if we had similarities, it would automatically go on the list and lo and behold, by my 50th birthday, I find this list and we'd done nine out of 10. That's amazing. I love that. Then we banged out the 10th one. We went to Bali and banged out the 10th one.
But that's awesome. You know, doing these things together. Yeah, getting on the same page together just makes it makes the journey more fun. It does. It really does.
Yeah. I think it makes like a, it's like, I found like a project where people complain about work, but when you have something that you're excited about and what could be more exciting than having the life that you actually want. It's the most important thing in the world. And so having clarity around that makes so much sense. I mean, I don't want to put out like some relationship expert, but I would say like, I would imagine that a lot of conflict arises when you don't have sort of like a shared vision or what you're looking for and having that shared vision makes spending decisions.
You know, I would imagine, I don't know, you tell me what you and you're in Olivia, like I would imagine spending debates or arguments don't really happen once you get this clarity on like what you're, what you're trying to accomplish and what you're willing to sacrifice for it. Yeah, the need to vert want exercise was really eye opening because one of the things you'll see if you're in a relationship is some of the things that I said was a want she said was a need. Right. So we certainly had some conversations like that. And then we also gave our daughter, which was her name is Teresa.
We gave her some of her wants. Right. We didn't want her to struggle like us. But yeah, no, the most meaty conversations were around what I thought was a want or a need and vice versa. And we just came to an agreement.
And then, you know, the next 12 years weren't that hard. We didn't really have money disputes because we were on the same page together and we were stacking, you know, because again, in order to play this game, you need disposable discretionary income. Of course. That stuff becomes seeds, those seeds get planted, then they grow over a decade and then you harvest, you know, at your 10, 12, 15, whatever it is. And that's just like when you guys are doing that together, rowing the boat the same direction with the same amount of effort.
It's just amazing. It's easy. It's really nice. Yeah. Well, like what were some of the things you had to give up?
Well, we never bought a new car. We never upgraded our house. So we live in the Silicon Valley. We moved into a condo. It was 303,000 when we were making, I don't know, combined 90 grand or whatever it was.
Yeah. We were stretched. We both go on over the next 15 years to become executives, but we never upgraded our home. Yeah. That's good.
So that was a big thing. And, you know, we could have upgraded our home two or three different times and would have been approved, frankly, right? We had them. Yeah, that's a natural thing. Yeah.
We didn't upgrade our kitchen. That was the big thing that that's the one that I loved doing when I was the first thing we spent once we were done is a little upgraded the kitchen. We still have the same stupid white tile. Oh, yeah. The builder special appliances.
Yeah. Yeah. And, you know, it was fun. It was a six figure check, right? Upgrading the kitchen for when we were done.
So that was the big one. No new cars, no. But that feels great. It feels great when you do it. I, you know, it's saving for something and working for something and then having that payoff honestly is a lot more gratifying, I think, than having a lot of disposable income and just buying whatever people.
I know it sounds crazy, but I think it's true. Oh, it's absolutely true. Again, because you're in the grind. We were in the grind for 12 years. Olivia and I had no once for 12 years.
That's wild. And then we spoke to me for sure. Olivia got her kitchen and I got my dream car. I got a Mercedes Benz SL 550 twin turbo. Two car, two-seater twin turbo, you know, six-figure car and I go to that car.
Yeah. Yeah. Over a hundred thousand miles. It was my everyday driver and I had fun every day. Yeah, exactly.
Yeah. And, you know, if you were upgrading your car every year, even incrementally, you know, building up to that nicest car, like when you finally got it, when it felt as good. No, I smiled every day walking in the ground. Exactly. That's what's so awesome about being intentional about how you spend your money and your time because it feels so gratifying knowing like this was something I worked for and it was my choice and I gave up other things.
Yes, but it was like entirely worth it because I spent the time and I'm intentional about like what I actually want and not spending money on things that you're supposed to spend money on quote unquote, supposed to spend money on. I think about this a lot these days because it's it is hard, man. Like you get we get marketed to so much like every day if you're on Instagram, even driving down the road, like you were told to buy so much stuff and unless you are deliberate about not giving in and not just buying things that like you could have you might but like don't really matter to you. You're never going to get the stuff that matters to you because you're going to spread your wealth in your time around too much because honestly that's true too is like our society.
It wants us to spend money and it wants us to give them their time. Like just think about Instagram, their business is taking our time. That is literally how they make money. And so you have to you have to push back against that. And the only way to do it is with careful intention.
Yeah, the final topic for this conversation of what is success is something I think bigger pockets into doing for decades. I'm trying to do with one rental at a time. And that is great a community of people going in the same direction. Yeah, for too long. I tried to do everything myself.
I thought I lived on an island by myself and that's not how the games play the game. You know, lots of great people in the real estate game. Where your pocket is a platform I was on for years in the beginning and it's just community is is if you get around other people in that journey that are making the hard choices delaying gratification. It's just easier to do when you realize you're not an oddball. I think a lot of this will be like an oddball.
Oh, totally. Like most people think you're crazy when you start doing this stuff. Maybe not during COVID because everyone was like all into it then. But outside of 2020 to 2023, people are like, what do you do? Yeah.
And having people to talk to is so helpful to your business. Like it actually does matter in terms of dollars and cents and performance of your portfolio, but also just makes it sustainable. And that to me is the key. Like this business, you're in it for a long time. You were going to succeed.
It's pretty cut and dry. And so how do you how do you stay in it for a long time? Have friends have fun. Enjoy it. You know, if you're just doing it by yourself and grinding away, it's easy to quit because it sucks.
So make it not suck. And it doesn't. I promise you the way to make it not suck is not buying 10 more doors that you better thin. It's getting friends around you who are going to help you optimize your to one great deal next year, you know, or help you manage your portfolio that you have really, really, really well. Or introduce you to a new contractor.
Those are the things that make you successful. I know that in the recent culture of real estate investing, that is not what is said, but it is absolutely the truth. And just think about your regular life. Like what outside of investing, what makes life worth living community? Like that's the whole thing.
And so it just investing is no different. Like the what makes this worthwhile over the long run? Yes, of course, improving your financial future, but also doing it with people that you like. Like that's that's really, really big part of it. Think of any hobby you have.
You probably like that hobby because you do it with people you like. And investing is not any different. Dave, you're amazing man. Thank you for being here. Where can people find you?
You can check me out on the BiggerPockets podcast, the on the market podcast or Instagram. That's what's called at the data at the data deli. Thank you, buddy. Take care of you. Thanks, man.
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