Job Security is a myth and it does not equal financial security. Instead, a job typically pays you just enough to stay but never enough to leave. Rather than security, it creates dependency on one form of income.
I experienced this reality myself when I was an engineer. My boss and mentor, who earned millions of dollars for our company, was laid off with the intention of me replacing him at a lower salary. Even though it was my dream job I refused to take it because I figured if my world-renowned mentor is expendable, then so am I!
Commercial Real Estate Provides Financial Security
Do not trust in the myth of job security but instead create a secure income by investing in Commercial Real Estate. It doesn’t matter if your job is high or low paying, you can purchase commercial real estate. Let me take you on a journey of simple math. Below I have two example situations to demonstrate the difference commercial real estate investing can make in creating a more financially secure future.
Situation 1: Job Only
Salary: $84,000 a year or $7,000 a month.
Cost of Living: $5,000 a month including mortgage or rent, groceries and bills. This leaves $2,000 a month as savings.
Savings: $20,000
Unfortunately, he loses his job. How long will he survive without a job?
Time Living off Savings: He has $20,000 saved up, so he can pay his $5,000 a month in living expenses for four months before running out of money.
How is he feeling? Panicked because he only has four months to get a new job or maybe go back to school and pursue another career.
Situation 2: Job Plus Two Years Investing in Commercial Real Estate
This person has a job and has been working in my protégé-program for two years.
Salary: $84,000 a year or $7,000 per month.
Cost of Living: $5,000 a month.
Savings: $20,000. However, this person purchased two 12-unit apartment buildings where for the past two years the total cash flow for both properties is $4,000 a month.
Unfortunately, this person loses their job as well. How long will they survive without a job?
Time Living off Savings: They have an investment income of $4,000 a month plus $20,000 in savings so they have 20 months before running a deficit. Let me explain why. Using their monthly cashflow of $4,000 to pay their monthly living expenses of $5,000 they have a deficit of $1,000. Using their savings to pay the monthly deficit, they have 20 months until they run out of savings.
How is this person feeling? They are calm because their future is secure. Twenty months gives the person who’s been investing in commercial real estate for two years time to figure out what they’re going to do. For instance, they are free to explore another career path, go back to school, or maybe do commercial real estate full time. They don’t have to panic because they have time and options.
3 Tips to Financial Security
Tip 1: Don’t Put All Your Eggs in One Basket
Don’t depend on one job to secure your financial future. This applies to high earners as well. People who make a lot of money tend to think that they’re secure in their high paying job. As a result, they get lulled to sleep with the money they’re making and then when something happens, they aren’t prepared. Don’t spend all your energies on building a company that doesn’t care about you.
Tip 2: Plan for the Inevitable
The inevitable is when you get fired, laid off or downsized. You need to be prepared in case something happens to you or your company. How can you prepare? Buy commercial real estate so you have something to fall back on.
Tip 3: Invest in Commercial Real Estate
Your first income producing activity may be a job. Your second activity should be investing in commercial real estate. Have other people with jobs pay your mortgage by investing in an apartment complex. For example, if you purchase a 12-unit apartment building, you then have a property occupied by renters with 12 jobs paying your mortgage, taxes, repairs and insurance. Most importantly, it will provide you with cashflow.
Some of you already have retirement funds, 401K, self-directed IRA, and pensions. I have a post called, How to Maximize your Retirement Investments which will show you how to maximize those investment funds to set you up to be secure and to have financial security.
