Five years of sacrifice or 50 years of struggle

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Five years of sacrifice or 50 years of struggle? It’s your choice.

Last week, I heard a quote from Elena Cardone that resonated with me and I think everyone should hear it:

“It’s either 5 years of sacrifice or 50 years of struggle.”

We’ve been sold a narrative that you should work 40 hours a week for 40 years so you can live on 40% of your earnings. If you want to live that lifestyle, that’s your choice. But if you are willing to make some sacrifices and work hard, you don’t have to live that life. 

For me, that 5 years of sacrifice was more like 15 as my wife and I built up a portfolio of single-family rentals that replaced two six-figure incomes. All the while, I built up the One Rental at a Time brand.

Throughout the past couple of decades, the 3 steps to early retirement have not changed:

1. You must grow discretionary income by increasing revenue, lowering expenses, or (my favorite) doing both.

2. You need to become elite at something, which takes daily focus and commitment. Do not try to establish too many streams of income at once. Pick a focus, find success in it, then build out. 

3. In real estate investing, you have to give yourself 10 years to reap the rewards. If you are building a brand, it takes at least 5 years. 

Here's some other advice for those looking to start their financial freedom journeys:

1. Don’t quit your job. Even though entrepreneurship seems attractive, your job is your security blanket and will allow you to get the best debt and the discretionary income you need.

2. If you are paying credit cards at 18% or more, prioritize paying those off. As soon as you pay those off, you essentially have an 18% return. 

3. This journey will be slow—this is part of why you should not quit your job. 

4. As you chase your goal of financial freedom, some people in your life will express doubt and disapproval. You need to have confidence and patience with your process, and it’s best to only keep people around who will support your journey. Being around like-minded people with the same focus is essential to your success. 

What stops people from sacrificing?

“Five years of sacrifice” can sound daunting, but depending on your perspective, it’s less grueling than you think. In my conversation with real estate investor and coach Brian Adamsom earlier this month, we talked about how this period of sacrifice can play out. 

Brian points out that an important element of being able to endure these 5 years of sacrifice is having a clear vision of what you are trying to achieve. If you are living in a default mode and aren’t envisioning a better life for yourself long-term, and establishing the steps it will take to get there, it’s very difficult to sacrifice for as long as you need to improve your situation. 

You can have anything in life if you are willing to endure the discomfort of sacrifice. This discomfort is the growing pain of improving your situation financially. If you look at it that way, these “5 years of sacrifice” actually feel less like you are giving something up and more like you are just doing what it takes to reach your financial goals.

ResiClub chart of the week

ResiClub’s Lance Lambert outlined the significant amount of built-to-rent inventory entering Sun Belt markets like Phoenix, Dallas, Atlanta, Austin, and Charlotte. 

Even before the pandemic, homebuilders were constructing more single-family and townhome rental communities. But during the Pandemic Housing Boom, built-to-rent investors doubled down. In 2023, there were a record-breaking 27,495 build-to-rent homes completed, up 75% from 2022 and a staggering 307% since pre-pandemic deliveries in 2019.

The chart below shows the metros that had the most build-to-rent home completions in 2023, according to Yardi Matrix data.

Number of the week: 7.42%

On Thursday, the average 30-year fixed mortgage rate jumped up to 7.42%. If you’ve been following my commentary on mortgage rate hikes, you know I think this is a good thing. In fact, I hope it keeps going up to 8%.

It’s simple: in the long term, high rates mean fewer transactions. Fewer transactions means inventory can start to build. With healthy inventory growth, we have a better shot of the market healing itself. 

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