The American Education Institute

When you hear someone say, “I’d like to win the lottery so I could pay off my debts and start a business,” what do you hear? Do you hear a goal? Or do you hear a dream? There is a world of difference between the two. When people say things like this, they are dreaming. Or, if it is a goal of someone who says this, it is a completely unrealistic goal.

The tendency of most people is to spend much more time dreaming about success than they ever spend planning for it. Of course, it’s still good to dream, as it has often been said that before you can actually make some new invention happen, you have to dream it up first,. But that is certainly not the end of it. Notice that little word “make.” Dreaming something up does not make it happen. You have to make it happen. But don’t beat your head against the wall. You can dream all you want about winning the lottery-and even work at it too-but this won’t make it happen and you can’t make it happen either, no matter how hard you work. No, winning the lottery is unrealistic.

But becoming a successful real este investor is not unrealistic. You can do it if you work at it. Knowing the difference between realistic and unrealistic goals is your first step. Other steps in this process include taking control, organizing and planning, and then taking action. Sometimes bad planning, lack of planning, and unrealistic expectations can become a habit. This then almost always guarantees failure. You don’t even plan to fail, of course, but most failures come about from failing to plan.

There are only so many hours in a week, and you certainly have fewer than 168 hours in any week to spend on real estate investing. (Note that you’ll never have more. That’s all there are!) So you need to organize the time you do have carefully and thoughtfully. In other words, you have to plan your time precisely.

Coming full circle, an important part of planning is setting goals. It has been said that setting goals is merely writing down your more realistic “dreams” on paper. Not “winning the lottery,” but what are the more realistic dreams that you have? Do you dream about being rich? Yes, you can plan how you’ll go about accomplishing this. But now consider what your life would be like if you were rich. Don’t just think about it, write it down! Make a list, for example, of all the benefits being wealthy would bring to your life that you don’t already enjoy now. Add to your list all the new things you plan to acquire after you have a lot of money.

After you’ve written down all the benefits your realistic dream will give you, turn you attention toward planning how you intend to acquire that wealth and attain your dream. List every way possible that you know of for making a lot of money. Narrow that list into activities that you know you yourself can actually perform. Next, develop a time-frame for obtaining the results you intend to achieve by performing those activities. You see now that some things may be accomplished fairly soon, and others may take you a long time. In any event, you’ve now developed a plan of action for yourself and it’s in writing.

One reason for putting it into writing, by the way, (although this is not the only reason) is to make a record of what you actually planned as of a certain date. If you subsequently begin to veer away from your plan-still thinking you’re following the plan-you can refer back to your original writing and read again what you wrote. then there can be no doubt. You are veering away from your plan! But this is not necessarily a bad thing. You are always free to rewrite the plan-just be sure to put the new date on it for later reference.

Here’s a practical example to illustrate short-and long-term written planning. Suppose you have a goal of retiring within fifteen years, and you want your monthly income to be greater than what it is now. To do that you realize you will need to have more than $4,000 per month coming in from a source or sources, outside your present job. You now have a long-term goal (retiring in 15 years), so write it down! You also have one or more short-term goals (finding other sources of income that combine to produce more than your current monthly salary). Write this down too. Then write all the ways you can begin to do this: make investments, take on additional work or seek secondary employment, or go into business for yourself. Rule out the activities that you can’t or don’t want to do (e.g., taking on another job)–scratch it right off you paper!

Now start making investments and maybe go into business for yourself (as a real estate investor, naturally) and see what happens. Suppose everything does well. In three years take a look again at your written plan. Now you see your income is one-half again over-and-above your then-present salary. Excellent! Now you can rewrite the plan to show you’ll be able to retire not within 15 but only 7-1/2 years from the date of that original plan. On the other hand, suppose things go much worse than you originally planned. Well, you can now readjust your plan to show retirement in 22- 1/2 years. Even if today you’re 40 years old, retiring at 62-1/2 years isn’t too bad, is it? And that’s if things go badly, and yet it’ll still be at an income greater than what you’re making right now.

Your short-term goals should include purchasing the income producing properties. Your long-term goals should include securing the income you need to retire. These goals are adjustable, but your plan is now in writing. Now all you need to do it take positive action!

1-11-09
Dr. Eric T. Martin