I’ve been saying it for years, real estate investing is a ‘get rich slow’ method of building wealth. And that’s a good thing. Because as far as I’m concerned, getting rich quickly is one of the worst things that can happen to you, financially speaking.
Have you ever heard a story about a lottery winner who declared bankruptcy just a couple of years after the fact? Or someone who received a large inheritance only to blow it all? Sure you have – because it’s a common occurrence.
There are a lot of theories about why this happens, but in my opinion, this tendency to blow through large sums of money quickly can be attributed to the fact that people who get rich quickly have not had the time to develop a wealthy mindset. Money is great, but without the knowledge and appreciation of how to manage it, control it, and invest it, be prepared to say goodbye. Whether it’s through irresponsible spending or bad investing, losing money is an easy thing to do.
Benefits of Slow Wealth
There are two main benefits that I see to slow wealth accumulation. The first is mindset: When you slowly start to accumulate wealth your mindset tends to automatically change, and you become more intentional with the way you spend your money. You go from thinking “I can afford this so I’ll buy it,” to “Is it in the budget?” or “Is it worth it?” You may also find that even if you weren’t that frugal before, you start to develop some of those tendencies. It gets much harder to part with money when you’ve worked so hard to get it and save it. Basically, by the time you’ve built a substantial amount of wealth, you will have also developed the essential habits that will allow you to keep that wealth.
Another benefit is that building slow wealth changes you – in a good way. What it takes to earn, invest and grow wealth takes patience, hard work and a willingness to learn. Eventually, it becomes about something far more valuable than money. There’s a quote from Jim Rohn that sums this up perfectly:
“Become a millionaire not for the million dollars, but for what it will make of you to achieve it.”
– Jim Rohn
A million dollars doesn’t come easily. You have to work for it. As a real estate investor, I had to learn not just the business of buying and selling houses, but how to renovate a house to add value. I also had to learn how to manage tenants and how to deal with regular maintenance and repairs. I also had to learn the financial side. Essentially, I had to learn how to run a business. The process of becoming an investor and making money changed me and taught me how to be a businessman.
When people come up to me and tell me they want to make a lot of money fast, I always ask them why. Keeping and growing money is a skill that needs to be developed and nurtured. So forget about get rich quick schemes and focus on a slow build to financial freedom. Remember, good things come to those who earn them!