The hardest lesson I have had to remember over the years is it costs money to make money. I grew up in a very wise but frugal family. My parents taught me the meaning of sweat equity. My mother was the true accidental landlord, keeping her first home and turning it into a rental. She always self-managed it for my entire childhood, with my parents doing the work on the homes themselves. This is one of the reasons why hiring a handy man has been so difficult, because I have been taught all my life to do things myself.
My parents were the epitome of frugal living. They 1031 exchanged their first rental property into a larger property. They worked hard to stretch every penny by living on one income while still taking us all over the world. My parents were the ones who fueled my love of travel. The reason I learned how to set up a “third party” (friend) to assist with my properties was from when my family was traveling to different parts of the world during the same week as things were needed at the rental. The one lesson my parents did instill was this: It costs money to make money.
My parents bought an expensive house to be in the top school district for our county so my brother and I would have access to the top educational resources. They decided to put their money in our education through investing in a house in a great neighborhood rather than paying for private school. They taught me to watch the details and extra expenses that can eat away your profit or savings. They sent my brother and I to great colleges that met our needs. They even encouraged both my brother and I to get higher educations.
All of these were expensive, but I was able to do it cheap through scholarships and being a resident assistant in an undergraduate school. In graduate school, I went to a local state school where I received in-state tuition and also was a teacher’s assistant to pay for some of the expenses.
I am not saying not to be frugal!
Frugal living is what has paid for my empire. Using my one cookie recipe, Loft spending, having roommates, downsizing whenever possible are all apart of my frugal living and what has given me the money to “spend to make money.” The reminder is don’t forget to spend the money!
Once you no longer qualify for the first time home buyers type loans or VA loans don’t NOT buy again. Yes you might have to put down 5% but the potential profit is worth many times that. Every time I have wired money for our next rental I have a slight ulcer since we now have to put 25% down. Yet at the same time, I see where we are in our empire growth. We are well on our way to reaching our goal.
Again, don’t get lost in the weeds. Don’t get so caught up in chasing the dollars that you miss the thousands! Without being frugal you will never have the investment cash. Just don’t get so wrapped up in saving that you forget to invest!
What has been your mostly costly investment that has paid for the most?0
I really like your point of view! You’re absolutely right! It is refreshing to read your take on investing in education for your kids by buying in the right school district and investing in college — because you, the kid, held up your end of the bargain by getting scholarships and working through college! I think that’s the missing link in a lot of families: parents sacrifice/spend to invest in their kids but the parents neglect to make sure the kids understand why — and that kids are producers in the family scheme, not just consumers. Thanks; great read!
Elizabeth Bennett Colegrove says