Capitalization Rate and Commercial Real Estate

The Mike Everitt Method

How can you buy a property then get your initial capital back within a short period of time without relying on market appreciation? This sounds too good to be true, but it isn’t. As with all real estate investing with this method requires knowledge and skill.

I had the pleasure of having a lunch with a practitioner of just the precise method. I learned of this method from an investor named Mike Everitt. In our conversation Mike had told me that he only buys a property that will get him to his next property. Naturally I was intrigued. I hope you are too.

To understand the method he employs, you first must understand what Capitalization Rate (Cap. Rate) is, so I will start there. The explanation of Cap. Rate may be a little dry, but it is worth it to gain the understanding of this method.

Cap. Rate is the ratio of net yearly income (Of the property) to its purchase price. That sounds like a mouthful; but stick with it and I will break it down to explain it further.

CAVEAT: This method is based on capitalization rate and its ability to calculate value of a property. This doesn’t work for residential properties because their value is based on personal use and not as an investment. This method is for commercial properties. (A commercial property is a multi family, retail building, office building or otherwise)

Simple basic Cap. rate calculation:
$100 000 net yearly income ÷ $1 000 000 purchase price = 10% cap rate.
$12 000 net yearly income ÷ $500 000 purchase price = 2.4% cap rate.

When calculating your net yearly income take your income and subtract your expenses such as insurance, taxes, utilities and other operating costs. These are costs attributed to operating the property, but not for financing the property (ie. Not the mortgage).

Another piece of the cap. rate puzzle is that the number means nothing unless you know how to apply it. I will explain the basic application of cap. rate. Cap. rates will be different in different areas, but in a given area they will be relatively the same. I will clarify that statement. In area A, the cap rates might average 5% while area B might average out at 7.5%. If you know the cap. rate of the area, and you can calculate the yearly income of a property, then with the formula, you can calculate what the purchase/sale price should be.

Using the example above if you know your net yearly income ($100 000) and that the average cap. rate (10%) you can calculate the properties value to be $1 000 000. Once you have calculated the value you know if you are getting a good deal or not.

OK, now that I have explained the basic capitalization rate calculation and how it is used to calculate the value of the property, how can you use it to buy a property with say $250 000 down and very soon be able to get your $250 000 back so you can buy your next property? The magic is in the net yearly income. If you can increase income OR reduce your costs you will increase the NET yearly income. Now think about how that can affect the value of the property. If your cap. rate is 5%, then every dollar that you increase your net yearly income (Reduced $1 of cost or increased income by $1), the you increase the value by $20.

 

WAKE UP….This is where the magic is.

If you have made it this far I can now give you the answer to the initial question. For the example I will give you I will use numbers that are easy just for illustration purposes.

Using the above property ($100 000 net yearly income, $1 000 000 purchase price, 10% cap rate.). To buy this property you would need a down payment say 25% ($250 000). You need to finance $750 000. If you can reduce your yearly costs by $13 000 and increase your income by $12 000 totalling an increase in your NET yearly income of $25 000, then your value calculation has just changed.
$125K ($100K + $25K new) net yearly income ÷ 10% Cap. rate now gives you a value of $1 250 000.

You just increased your value by $250 000

 

By increasing your net income, you have increased the value of the property and this means that you have more equity so your LTV has changed and you can now refinance and take out your newly created equity…….Then buy the next one.

$1 250 000 x 75% LTV = $937 500 that you can now finance the property to.
$937 500 – $750 000 = $187 500 in equity you can refinance to.

Use that to buy your next property.

Voila. I am going to call this the Mike Everitt Method….and yes, I know he is not the only one employing this strategy and the name is not very clever, but I am going with it for me for now.

This method is my end goal. I want to work my way into commercial properties for a couple of reasons. I will keep you POSTED on my progress. If you want to know more or have something to add as always lets start a conversation.

My Investment Journey

This post could be called;

“Mistakes I’ve made that I have turned into lesson learned so that I don’t make the same mistakes again.”  

That would be an excessively long title though. As you probably know my investment focus is on real estate, but you might be asking why and that might be why you clicked on this link in the first place.  It may be long, but so was my journey, so here we go.

After high school, I went to BCIT for electronics engineering technology.  It was two and a half years (supposed to be only 2) of painful gruelling brain busting.  I was under the impression that at the end of this schooling I would be making a big bag of money every year.  I finally finished and got a job that was salary and after a little while I clued in that it was only barely twice minimum wage and it seemed to me that they owned me (2001).  I eventually thought “This isn’t great. I want to be rich.  I want to invest and be like the rich people”. The bug was implanted.

I called my bank.  They set me up with a pre-authorized investment right over the phone.  I was going to be rich!

Wrong…well at least not that way.

I thought again for a while (Maybe I should think before, not after).  I did a little bit of math and figured out that my $100/month over two years would pay me about $26 after taxes. That was NOT going to get me rich.  But nonetheless I had effectively saved a little bit of money. I guess doing something is better than doing nothing.

At this job, I was working with some people that had all the answers and was lunchtime counselled by them.  I ended up buying stocks because the graphs looked good. Buy a ten cent stock and sell it when it goes up to eleven cents (within a week of course) and you’ve made 10% on your money.  Awesome, that sounds easy. I also read that you should use borrowed money to do this, so you don’t even have to have the cash to start.

It was all falling into place…or apart at the seams.  

I did have a couple of wins, and a few more losses. The net was a definitely a loss.

This may have seemed like a total loss, but it wasn’t.  I may not have immediately realized it but I learned some lessons from playing in the stock market like that.  One of my first lessons was that at that time it cost $40 to make a buy and $40 to make a sale of a stock. That means that it cost me $80 to get in and get out.  So to sum it up, I needed to make 8% in a $1000 trade (Not a terrible return for a year these days) just to break even. Pretty tough and a losing proposition. You could limit this downside by buying far larger amounts, but fortunately I had a few losses and realized that was too risky without using the second lesson.  I also learned that I needed to do a lot more research. How do I do THAT though?

One of my armchair counsellors also told me that “I should buy dirt, they don’t make it anymore”.  He was buying a house in the heart of Coquitlam for about $330K. How ridiculous. Totally over priced.  Real estate prices couldn’t possibly go above that threshold. I was totally right, wasn’t I? He might have shared some nugget of wisdom in amongst all his other pontifications.

I was told that I should give “Rich Dad Poor Dad” a read.  Over the years I have found that this was a lot of peoples’ gateway drug into the investment world.  It made a very compelling case for real estate investment and for going into business yourself.  Simply buy a cashflowing property (has a little bit of a net gain at the end of every month) and then you can do it over and over and be ridiculously rich.  

Was the author Robert Kiyosaki wrong? No.

Did he leave out a little three letter word with gigantic implications? Yes.

That word was “How”. Damn, stimmed again.  

I tried though. I was getting creative in about 2004 and even put an offer on a couple of places. My offers were not accepted as I was making offers from the utopian world of books. I had a deal that was accepted by one owner of the property, but not the other.  So close.

The place I was working at didn’t work out. I actually went a few times without a paycheck because there was no money, yet the owners were taking a ridiculous amount out of the company building a house.  Some months we were doing over $400k in sales with about a 70% profit margin and only about 12 employees. I was also worth far more than I was making and they could’ve afforded it. Enough complaining; Moving on.

I was still investment minded and I had bought into a company creating a piece of sawmill equipment that was selling shares. They were going to go public and all the investors were going to get rich very quick. Exactly the pipe dream I was looking for so I went back to buy some more. When I was there I ended up with a job and left the other company. I ended up working for the sawmill equipment company, but this time I was a share holder. Some of my pay was going to be in shares as well.

I was going to be super rich…and soon. Nope. I should have looked a little deeper.

It turned out that the main owner/CEO, or whatever he actually was only had his best interests in mind. The 20% “Finders Fee” that he would receive/take any time someone would invest proved to be too enticing for him to give up by going public and fulfilling the plan to go public and make anyone else some money.  In the end it turned out that I had spent a pile of money I didn’t have. I was given about $40K (on paper) worth of shares. The shares would have been considered income so I would have to pay taxes on them. I couldn’t pay that tax bill, nor could I sell non-public shares to cover the bill. Everyone at the company was in the same boat. We all gave them back with the promise that they would get them to us another way.

Long story short, the money dried up. I went 6 weeks without getting paid. The shares ended up being worthless and I had to walk away from it all. Other good people at the company had it far worse off.

I learned that when it starts to smell, it may be because it is rotten.

While all that was going on, life happened and got expensive, so my investing slowed to below a crawl. I had married my girlfriend, bought a townhouse and got my now wife pregnant. We sold the townhouse for a gain of about $70K in two years.

Here is a quick number crunching. Bought for $185K. Sold for $255K with a down payment and closing costs of about $10k). The monthly cost was about $200 more that it would have been to rent, but that was more than covered in the mortgage paydown every month. The net result was our $10K investment made a net gain of about $60K ($70k-$10k in selling costs) in two years. $30k/year on $10K = around 300%/year on our money.

My property made more than I did in that time period! Maybe there is something to real estate investing. Everybody has heard stories like this I am sure. This was one of my first lessons in real estate. Success isn’t always a great teacher.

I got a new job with an income that I was 100% certain that the paycheck wouldn’t bounce. I was happy with just my income for now. I had learned a lot about investing and it cost me.  

My friends bought trucks and TVs…I learned some lessons.

They were Dodge trucks so they are all dead by now, but my learnings remain.  

We moved into a house, renovated the heck out of it and planned on living happily ever after. We had our certainty in life it seemed. It seemed certain that this was as far as we were going to get unless we made some improvements. We had the standard struggles as everyone else, but were living reasonably ok. Not great, but not bad. We still had some money issues like everyone else. I couldn’t reasonably go to my best mans wedding as his best man because it was in Mexico and we didn’t have the money at the time.  Bummer. Kind of destroyed our relationship as it was.

My new job exposed me to other jobs, that were easier, less stressful, less brain intensive and paid WAY more yearly. My wife and I made the decision that I would go for one. That was my apprentiship that we went through. My wife supported me all the way. She also gave up her career to go about this. It also allowed her to be home with the kids when they were in their formative years. These were with some pretty big sacrifices, but they have paid off.

During the apprentiship, we had to move around the province and could not stay in our house. We decided that we would simply rent out our house during the process so that we could keep our appreciating asset.  It would only cost us about $500 dollars plus the rent to keep it.

We were in Terrace, then Castlegar watching our house fall in saleable value (2009-2011), paying $500/month to do this. Also, because it was now a rental, it was now subject to capitol gains when we were to sell. We were also asking a lot of a friend to help with any issues that came up when we were away.  I was petrified about having a bad renter and the place getting destroyed. I didn’t know how to mitigate these issues.

$500/month was not a sustainable model. Robert Kiyosaki did warn me. I had learned a lot by this time as far as investment.

  1. The stock market is a bit of a crap shoot, unless you are able to do a ton of research, which I didn’t know how to.
  2. I am not going to get that far ahead by working for someone else.  Comfortable, but that is it.
  3. You must do some diligence to look behind the curtain to see what is going on.
  4. Trying to do these things on your own, is a loosing proposition or a least a severely limiting proposition.  Building a team to help you is way better.
  5. Real estate has some seriously great leveraged merits when you win.
  6. I did not know how to build a team; I do not know how to do due diligence on anything; I do not know how to go about investing in real estate without creating some significant risks.

Whew.  I am glad you have made it this far. This is where things start to go right. I have heard that failure is the best teacher, but I have heard a better quote. I am paraphrasing and I am not sure who I am paraphrasing, but the essence is correct.

“I never fail……I get a result.  It is either the one I want or the one I don’t.  I then make corrections to achieve the result I want.”

After the apprentiship we were living in Chilliwack, and I got a job that allows me to stay in Chilliwack.  As a guy who always wanted to get more or “Be rich like the rich people”, naturally that was where the conversation with the armchair experts often went. Lots of armchair experts had advice for me. The best way to find out that someone is just talking talk is to ask them how walking their walk is going.

I was talking about real estate investing with a co-worker (younger than me). I had the upper hand in the conversation, because I could talk the talk with any of these experts just fine because I had been through a couple of real estate transactions and now had a little bit of experience. I asked him to talk about his walk and then he started talking to me about his two investment properties and a third that he was working to turn into an investment. I had egg on my face. I was the talker this time. I was also in amazement that I had met someone who was actually doing it and was younger than me to boot. I swallowed my pride and asked questions and this was the beginning of things going right.

I knew at this point that for real estate investing, I needed to know how to do the diligence and how to build a team of the right people to go about this with significantly lessening the risk and the downsides.  After all, the leveraged gains also meant leveraged losses, so I had better make some of the right decisions. He recommended I read “Real Estate Investing in Canada 2.0” to me.

It was a mediocre read as far as books go, but this was probably because the writer was a bonified walker of his talk rather than a writer (I do not want to minimize the writing though as it is still pretty good).  He had hundreds of properties and it explained how to fill my two needs I didn’t know how to fill for real estate investing. It spoke of how to build a team and made it easy to do. It explained how to do some real diligence on a property. I was and still am hooked.

The writer started a network of like minded investors and explained how to join. The guy who put me on to the book in the first place was a member and following its methods. I was on to something. I started to talk to my wife about it. She was skeptical. If you want to know why; re-read everything before this.  Fortunately she met a friend that worked there at the time. We met with that friend and she and her husband had several properties including multiplex properties as well. More proof that it works. My wife was intrigued. It might work and it is not just another one of my cockamany schemes again. We decided to both go to one of their training weekends. It was intense, but sitting in a room with literally hundreds of normal people who are doing the same thing to us was definitive proof that it can be done and by regular people. My wife joined.

I have since joined and met lots of people who are following the methods of this book and bought tons of their own properties. There is tons of training and meetings through this network where you can build your team through recommendations, and meet mentors and peers in the same business. If there is a possible mistake that can be made in real estate investing, it has been made by lots of these people and even more of the people have methods to avoid these pitfalls. The methods of avoiding these pitfalls are quite readily available and people are quite willing to tell their stories as am I (like right now writing this).

I have now got a great education in this realm. I am still continually learning. I have learned from my mistakes.  I have learned how to maximize the upside and minimize the downside. I am walking my talk.

I have purchased a property as a rental. It is leveraged at 5:1. I used equity in my current house to purchase it at no extra monthly cost to me for the equity.  The property is paying out about $250/month (Scalable, repeatable and replicable). I have the downsides (Bad renters, Vacancy, Property maintenance, Real estate market corrections, and others) taken in to account and minimized. I am starting out paying down a mortgage by over $900/month. I have bought in an area with market appreciation. I have lots of research to back this up.

If the market goes up 6% in a year I make 30% (FYI the 40 year, year-over-year average including the fallout in the 80s is 6.7% in my location) on my leveraged money. I am not going to sell so if it doesn’t go up or even if it goes down a little I am covered. The property is cashflowing in a strong rental market so I can hold on as long as I want to. So far, the property value has increased more than expected, but I am in it for a longer term, so I am not too concerned or excited either way.

I am actively searching for the next. I want to make some money for others while doing this. This may sound pompous, but take a look at the gains you are making with your advisor.  After looking at those gains, ask yourself what recourse do you have if things don’t go well. I am happy to say, that if my propertie(s) are not working well, I am the one that solves the issue. I have the knowledge and the help to get it done.

This how I got here.  If you are still asking “Why real estate?”  I’ve summed it up in a few short bullets on the “Why Real Estate“.

Adam

The Importance of Personal Development

In the world of personal development information is everywhere. There is no shortage of things to do, diets, exercises, listen to podcasts, read books, go to seminars. If you have clicked on this page it is likely that you have some interest and therefore have probably tried at least one if not multiple of the above examples. But as fad diets come and go, so do a lot of the ideas in these mediums. That is usually a sign that they don’t work or they are just not reasonably feasible and/or sustainable. Wanna lose weight? Easy, go vegan and run 22km per day 6 days a week. I guarantee you’ll shed pounds, but I guarantee that you will have about a 99.8% chance of failure.

A lot of the quick fixes make great headlines because they promise the world, but can they deliver? Am I going to invest that much of my time on a whim? Likely not, so the question remains; How can I find something that will work for me? I want to help you with that.

I have been trying to figure it out for a while. I think it is one of those processes that you continually learn. There is no official measuring system like a B.A. or a doctorate that I know of in this realm so I am first going to share the story of my journey to put where I am at in context. I am referring to it as a “Journey” because I am not at a destination. There is no destination. You can just strive for continual improvement. I am not perfect, but I think I can help.

I started my personal development journey by wanting to get into some form of investing. I found that real estate will works for me (Check out the “My Investment Journey” post for specifics of how I came to prefer real estate as my main vehicle).

Did I just hear you say “Aha, that why Adam’s site is tilting in that direction?

I have gone through the process of rental real estate a couple of times.

I have done a ton of research on the subject and am constantly doing more.

I am at a point where action is needed. My next steps are attracting capital and joint venture partners.

During my real estate geared personal development, I have noticed some trends or commonalities showing up in some books, podcasts and trainings. I was always a little skeptical because a lot of my research was from reading. I am a slow reader so my pool of books wasn’t overly vast and my pool of content contributors was even smaller.

Generally, if you have written a book about something that means you have found a system that works for you. You are probably extremely successful and have had extreme focus in your one area. You must have a work ethic or routine or habit or all the above that is unsustainable to the masses. To really prove this point read “The Wealthy Barber” that has an unsustainable method to a comfy retirement, then read “The Wealthy Barber Returns” written by the same author (David Chilton), who has added little more clarity from his years of experience and pokes a little bit of fun at his first books unsustainability.

I was feeling a little overwhelmed and then stalled.

OK, so I am at a point where I “Get” real estate and I can slow down my research of how… and move to the doing. Personal development should never end though so I needed to expand my viewpoint a little.

This happened a little bit by accident I have to admit, but what an eye opening journey it has been.

I travel 4 hours to work. Quite frankly I got sick of the same old music on XM radio. I was finding the drives to be such a huge waste of time. As co-incidence would have it, two more things occurred to help:

First, my wife’s phone became too crappy for her but it was a significant upgrade to my phone. I got it when she got a better one.

Second, I was at a weekend real estate investment training seminar and people were talking about podcasts. Sick of wasting time on the road with the same music, people recommending
podcasts and now having the hardware capable of downloading and playing them. I think it was a
trifecta of awesomeness!

I started listening to “The Everyday Millionaire” podcast, by the CEO of the real estate network that I belong to.

This is where I started to notice some trends in the interviewees.

Wake up!

This is where it all starts to pay off.

The people being interviewed were not unattainable high achievers; they were regular people doing extraordinarily well. They were doing a lot of similar things. I expanded my podcast listening to a few others like Tim Ferriss, Bigger Pockets and Tony Robbins (I was always extremely dismissive of Tony Robbins because I though all his mind control hypnotism pump me up bologna was all just hype type junk. I was blown away at how direct, relevant and insightful he actually is.) I noticed the trends were continuing. These trends were not only in achievers in real estate but in every field that the interviewees were in.

I was soon realizing that my skepticism was holding me back. It was really hammered home when some of the successful people on the podcasts didn’t really sound any smarter than me, they just followed better practices.

Whew, that was a long build up to the guts of this post, but I think it is important to know how I got here. I am not coming from the point of view of just one book or one podcast or something. So here are a few of the things that will help you immensely. Most of them are pretty simple and most are easy to start and maintain indefinitely.

Write it down

Let’s start with an easy one that I can’t overstate how powerful it is. It comes in so many forms and different practices, but the crux of it is simple.

Write down your thoughts or needs or goals.

Keep a pad and paper handy. If you go to the grocery store chanting the ten things you need to pick up, you will get eight or nine of them. You might get lucky and get all of them, but if you write them down, you will get all ten and your mind will be free to think about other important things. You already thought of your list, why let it clutter your mind trying to remember it?

This is a simple example, but you can, and really should expand this idea. You have probably heard it before. It is not a brilliant epiphany, but it could very easily be lost in all the other suggestions.

A notepad by the bed is very common in books and podcasts that I have read/listened to. Have you ever gone to bed and started thinking of stuff you need to do? You get to thing one, then two, then three, five, eight and then aargh, what was the first one. Now you are thinking of all these things around and around and then you don’t sleep for a long time and then you wake up forgetting most of it. Sleep is important (See below).

Keep a pad available to you in most occasions. Sleep isn’t the only thing you lose because you don’t only think of things at night. During the day it will rob your focus on anything. Write it down, move on and continue to focus knowing you won’t forget it later. Stress free.

The method to put this step into action is not important.  Find one that works for you. For me, I have a pad in my pocket at all times at work.  Routinely I will think of a list of five or six little things I need to go and do before travelling to a site.  Forgetting one 2 minute job, can cost hours of lost time. I write it down so I can’t mess it up. It is a lot less stressful when I have my list.  At home I often use the notepad on my phone. I look at it periodically and it gives me reminders of what I need to focus on.

Write it down

Schedule

You really should plan and schedule your time.  If you have your plan, then you have your mission.  You don’t have to stress about “What do I need to do?”  You can find yourself racking your brain for how to make the day work and trying to fit other small things in.  This will stress you endlessly.

I am terrible at this one so don’t think I am perfect like the “Authors” I was talking about above.  I have relied heavily on my wife to do a lot of the planning because she was home more than me, but I really got under her skin by constantly asking about what is going on in a particular day.  

Everyone that was on any of the podcasts, that were effective daily, spoke about how they schedule their days weeks or months.  Sometimes it was a topic, sometimes it was just a fact of life and was discussed in passing. Routinely I heard people talk about how important this was to them.  It allows you to say “no, sorry, I can’t fit it in”, or “I have free time Wednesday at 10:30. Will that work for you?”. Either way, there is no stress of being put on the spot.  My wife carries a day planner and schedules that way. I use the calendar in my phone. At work I use my calendar in Outlook.

There are several ways to keep your schedule written down, try one and do it.  Modify it or completely change it until you find a way that works for you.  

The next question is how far in advance do you schedule?  

There seems to be three time periods that are very often used.  

The long range scheduling seems to be pretty simple.  This is planning holidays or trips or training or something that has a set day far in advance.  Once it is set it is set.

The next scheduling range is to schedule your week.  Probably half the successful people that I have listened to, do this as a Sunday night ritual.  They do it before going to bed and sleep soundly because of it.

The last scheduling range is scheduling your day.  Very often this is done the night before. It is also often a pre-bedtime ritual.

Some things to take into account when scheduling a day is to schedule some fudge time, because things will come up.  That’s life. You don’t want one thing happening to throw off your whole schedule. Also if you are trying to achieve something, you must block off some time just for that.  I will repeat this statement:

“Block time off for the most important thing you need to be doing.”

Let nothing interfere with it. Read “The One Thing” and that will make more sense.  Basically, it is a book on focusing on the important thing to achieve your desired outcome.  Plan it. Execute it.

Workout

What does this have to do with investing in real estate?  

Great question.

I am not saying bulk up so you can beat up the competition.  Stay fit. Mind body and soul. It sounds like oxymoronic thinking but if you work out, you will have more energy.  If you work out, you get it. If you don’t you probably wonder how does that guy have the energy to go workout and then go to work day in and day out?  In reality your thinking is backwards. He has the energy to go to work day in and day out because he works out everyday.  He probably has more energy at work too.

I could load you up with quotes like “Take care of your body, it’s the only one you got”, but then I would have to drill a hole in my brain because I despise quotes like that one that point out obviousness even if they are true.  I hope you get it without them.

The fact is if you spend some time at regular intervals on your body, you will have more energy, you will be healthier, you will make better decisions, you will feel better.  I am sure you have heard most of this before…But have you put it into action? You have the choice.

Take Responsibility

This one is not as black and white to implement.  

It does take a little bit of thinking to wrap your head around using it, because it is way easier to say IT’S NOT MY FAULT.  It rarely takes the words of “It’s not my fault”. It’s not my fault the market crashed or my tenant moved out or my car broke down or the campsite sucked or the burger wasn’t that good or I bought a Dodge.

Passing off responsibility comes in much more subtle and sinister ways. Listen to peoples (and your) excuses for a couple of days. Ask yourself if it really isn’t your fault or if you actually did have some responsibility for the results. You will be blown away if you truly and honestly listen.

If you have a consequence occur and you find an excuse why it happened and leave it at that, then you are doomed to make the same mistake over again and again.  

If your tenant moved out on you, try and find out why.  Try and find out if you can improve your process to limit this occurrence.

If the market crashed and you lost a ton of money. Stupid Syria. Think about how to protect yourself in the future from that outcome.  Perhaps you should plan more long term so the next time you are more comfortable and don’t panic sell at a loss.

If your marriage is falling apart and you think “My wife is nuts and doesn’t love me.  What a cow”, then maybe you should take some responsibility and look what YOU are not providing (Look into Tony Robbins Six Basic Human Needs and listen to his podcast on “Why People Cheat Part 1 and 2”.  It is more about how to fill a good relationship rather than bad ones.).

The campsite sucked? Did you do any research to find out before hand. How could you find out the next time before you book?

When it is not your fault, you are helpless.  Ask yourself, “Am I really helpless here?”, “What can I do differently?”.  

How do other people avoid the issue you just had/have?

Be Accountable

It is really easy to skip your resolution if nobody knows and nobody is watching.  

If you say “I will go to the yoga twice a week for a year” will you do it? It is far more likely you will if you make that goal with someone else who will go with you.  They will drag you along in your weak moments, as will you them (perhaps even out of spite because they did it to you last week).

You are far more likely to succeed if you are accountable to someone.  

There are several ways that people implement this. I have a real estate coach that I am paying to learn from, so my cheap nature is my accountability because if I have not done the work and I am not prepared, then I have wasted my money. I also have an accountability partner. She and I keep each other on our toes.

You could try putting it up on Facebook and ask for public internet shaming if you quit.  You can get creative with this. Just make sure that whatever pain will be inflicted (embarrassment, financial, shame) will be worse that doing what you need to do.  Humans are more concerned with avoiding pain, than creating pleasure.

Use pain as your motivator, but also have some positive re-enforcement. 

Know Your Why.

This is a big one. It is in every personal development piece that I have ever come across.  It is a resounding chorus that says you need to have a purpose. This purpose needs to be bigger than yourself.

You probably are somewhat successful on your own and you can LIVE with that. I have a good job and I can milk it until I retire and then be done. I can be comfortable. Most people can get there because comfort is a relatively powerful driving factor.It drives the majority of us without us even knowing it. More importantly we fear not having this comfort and certainty. This is why the majority of us stop there.

We stop growing out of fear of losing it all.

If you have a purpose, it will propel you to get started and it will pull you through when it gets difficult.

Part of my WHY is that I fear that without growth, I am tied to MY status quo of comfort.  

My status quo can evaporate in a heartbeat with an accident, getting laid off, or any number of terrible things. We have all heard the stories of someone who’s life changed drastically in a moment. They are then financially handcuffed and they are out of options. I want to avoid this possibility. Have you ever heard a story of someone who is very close to retirement only to have a market crash/correction and they get stuck working in the later part of their lives?  Just go to a Tim Hortons or McDonalds and look behind the counter.

That WILL NOT be me.  

Ensuring that I am able to finance my own retirement and more, so I never have that happen to me is part of my why. When I am successful at unlocking MY formula to achieve this goal, I will have the ability to duplicate it. This will allow us to prosper as well as certainly retire. We will then be able to contribute, donate to charities, help others or whatever we choose.

P.S. I have already set myself up for a good retirement. I am already at step 2 of this process.  This whole website is dedicated to sharing and achieving this goal.

If you are reading this you probably are wanting more out of life.  You may want to give back and might be looking for a means to allow you to do this.  You may have a loved one that you are wanting to help out.

I personally want to help people in general.  I want to take part in trips such as one that I am planning on doing in 2019, where we go to Mexico for a week and build a house for a family that needs one. I think that would be incredibly fulfilling.

Any way you cut it, money IS power. It represents work. If you amass greater amounts of it, you can control greater amounts of work.  You can choose the work that it represents. It is NOT equally represented though of course. Some people work way harder for their dollar than others. I would rather have it work for me.  

Some people view their dollars as little children that can grow up and have children of their own and grow exponentially like a family.  I want to have extra so I can allocate where the funds go. Of course, lots will be for me and my vision of pleasure, fun and security, but I also view it as a way to stop trading my time for work.  When I can lessen my trading of time for work I can spend my time for my vision. I can spend it on my version of doing good. I want to help people in genuine need and I want to counsel people who are less educated in the world of personal finance.

What is your “Why”?

Get Some Sleep

I am not your mom, but I can tell you that it is the very rare person who can actually work at a good capacity after only four hours sleep.  If you say you can you must be either a unicorn or you are lying to yourself. Try it for a few weeks.

I heard a few stories of extreme over achievers that swear by getting up at 4:30 or 5:00 and starting their day while everyone else is in bed.  The amount you can get done when nobody else is up is incredible. The Terminator is one of those guys.

I am not a morning person. I am best friends with the snooze button, but there is hope.  A lot of the people being interviewed were like me and not into getting up at ridiculously early hours. They were optimal performers later at night. I think I fit better in that category as it is 10:45pm whilst I am writing this.  

There were early workers and late workers and normal schedule workers, but they ALL agreed that to perform at their best they needed to get the right amount of sleep.  This is about 7 or more hours. Obviously at times this isn’t possible, but make an honest effort and don’t stop trying.

Focus. Don’t Multitask

Time and time again the power of focus came up.  It is such an important subject somebody should dedicate a whole book to it.  They should call it “The Power of Focus”. I wish I was that brilliant. It has already been written.  It is on my list of books I will read.

Over and Over I kept hearing that multitasking is not actually feasible. There is research that shows that people who are “Multitasking” are actually changing very fast between tasks.

Without going into too much detail, multitaskers don’t really multitask, and the work they put out could be so much better if they were to focus on just one thing at a time. There are some situations and jobs that are out there that require more of this rapid task shifting, but if you want to be effective, focus on one important task at a time and do it for longer periods. Finding that one task has a book of it’s own appropriately called “The One Thing”. One way to train yourself at focus is to meditate.

Meditaion/Mindfulness

Yes, I snickered too and I know what you are thinking.  

You can never picture me doing it. Bazinga, I have started to.

 It isn’t what I thought it was about. It is another one of the habits that an overwhelming majority took part in (Over 80% seem to take part).  I am new at it, but I have noticed some improvements in myself. I can’t speak too much about it for that reason other than to tell you that you shouldn’t dismiss it without looking into its merits first.  

Mindfulness teaches your brain to be able to focus. It may or may not be just a coincidence that focus is the section just above this one.

Be Grateful

Time for another rhetorical question;

Have you ever been angry and that caused you to make a bad decision?  

Of course, you have. We all have.

Think of a time when you learned of someone that had something terrible happen to them or when you watched one of those world vision infomercials.  

These two things do have a common thread.  Gratefulness. Think of a few things you are grateful for everyday.  It can be simple things as good weather or a good lunch or a smile that you got from someone.  You are probably thinking “How are these things tied together?”.

When you heard that sad story or watched that infomercial you probably had a small part of you that softened.  You had a part of you that actually felt good. You probably would have supressed this feeling because you thought it wasn’t correct for the situation, but if you understood why; it makes sense.  You would have seen the terrible situation and then subconsciously felt gratitude for your situation.  

When you are feeling grateful you feel good.  Being grateful is the antidote to anger. You can’t simultaneously feel grateful and angry at the same time.

I have started a daily ritual in our house.  

At dinner time we go around the table and say three things we were grateful for on the day.  It seemed a little weird at first. At times it has been difficult. With a little practice it has gotten easier.  On occasion the kids actually request to go first. It is too early to tell how much of an impact this will have, but I know I have seen some small improvements so I plan to continue.  

Try it for yourself. Try it first thing in the morning or last thing at night or both. I would also encourage you to write it down. If you do write it down you can look it over when you start to feel frustrated or angry and it can help.