Welcome to Day 16.
Day 15 was about two guys – Brian and Gregg – who had a small engineering firm. They were already making good money but basically they were in a holding pattern working to draw down the debt of £80,000 on one of their machines.
On face value this is a luck story – right time, right place, right? Maybe. This is how most people will pass off their success. Notice that what sits at back of that is the thought, Well they were lucky … this couldn’t happen to me … I’m not lucky. And even a tinge of resentment: lucky bastards! It’s not fair.
A lot of people hate lottery winners. The two types of lottery winner we hate the most are the already wealthy lottery winners – it’s not fair they are already rich; and the hard luck life on benefits lottery winner who are fat, ugly and stupid – it’s not fair they will just blow it on stupid stuff and wind up on benefits again.
I know this because this is what people express in seminars. It is that very thinking that will roadblock becoming a millionaire.
(Story about kid who keys a BMW – the mindset that makes that acceptable is the very reason they will never own one.)
So put luck aside. I want you to think about what changed for Brian and Gregg.
We can argue that what changed was thinking they had more options than finding ways to draw down the £80,000 debt. You might have a goal to reduce your debts – most executives i coach list paying off their mortgage and being debt free as a key financial goal. All they focused on was paying off a debt.
Subsequently, I am not rich because I have this debt to pay off. Once I pay the debt off THEN I will focus on becoming a millionaire.
It might surprise you to know that most millionaires also have big debts. I owned two properties – actually the bank owned most of the equity! On paper I was a millionaire and that asset based allowed me to borrow for more assets. So the thinking is I have debt AND I’m increasing my wealth.
So in the coaching we focused on the AND story.
We have a good business AND an £80,000 debt on machinery AND …
… AND this is why we do it.
Why do you work? Why do you have a business? I coach business owners and most started the business because they believed that somehow the business would deliver benefits. What benefits? Usually lifestyle outcomes. Nice house. Nice car. Holidays. Nice schools. Etc.
Brian and gregg both had a vision of a Sunday afternoon lifestyle living by the beach. So I got them to research properties by the beach and over several months they started scouting around for properties. That’s when they found six empty units with beach access and views on a quiet beach area they liked.
Each unit was £125,000. They talked to their bank about second mortgages on their home loans increasing their business loan to £455,000 and found they could finance three if they had reliable tenants.
More research showed that they could get tenants.
So the plan was to buy now, put tenants in two units, keep the third for a joint share basis and one day retire to the beach full time. So they proceeded.
Incredibly they found eager tenants and rented out all three units and ironically had surplus cash to draw down the £80,000 faster.
Within three months the units had appreciated in value and the remaining three units sold for £135,000, £141,000 and £154,000 which doesn’t surprise me because maybe the estate agent bounced off the purchase of three units in one hit and maybe manufactured some urgency in their marketing.
This continued for another year and a bit. That’s when the developer moved in and the rest of the story you know. Yes, that was lucky but they acted before they knew about developers.
The real story is about what changed, and what changed internally. What made them take action?
Reread today and Day 15 again. Reflect on what changed internally.