I recently sat down to have lunch with an extremely successful real estate investor and had an incredible conversation about everything from apartment syndications, to parenting, to consumerism, to investment strategies, to flying airplanes. This investor is a Navy veteran, airline pilot by trade, but real estate is his passion and where he has built his wealth. Check out Chris Rush and his company Sidereal Management. He has been incredibly successful in many of the different real estate investment strategies and I felt blessed to be able to sit down with him and pick his brain. One of the sticking points to the conversation was our discussion about risk.
In the financial/investment world, the term risk equates to the chance your investment may not perform to the expected level perceived. But in our conversation, we talked about the risk associated with relying solely on our primary job (military service member, or airline pilot) to support our standard of living and future legacy for our family. What concluded was this:
Relying on an outside entity (government or corporation) to look out for our best interest and financial state is RISKY.
Many of my colleagues within the military expect that their medium income salary, military benefits, annual contributions to their TSP, and promised pension will set them up for an excellent retirement. They also think that investing in real estate is RISKY. But I disagree. Don’t get me wrong, I too am looking forward to the extra income stream produced after 20 years of Naval service, but I know there is inherent risk associated to solely relying on the government to cover my family’s needs.
Most of us in the military have been specially trained, require specific skills, and have considerably dangerous jobs; pilot, infantrymen, sniper, special forces, tank operator, etc. And even those that aren’t on the front lines have far more opportunity to be engaged in hazardous duty than our civilian counterparts. So, what happens if I get hurt on the job? Or what happens if I blow out my knee while snowboarding in Colorado and am no longer able to fly? What happens if I am no longer able to perform my duties as a Naval Officer? Will the government continue to support my family’s needs for the rest of my life? Will they continue to pay me the same salary? Would Southwest Airlines support my friend for the rest of his life? I’d venture to say no.
So, what’s the point?
The point is: the act of NOT learning about other investment strategies (real estate, private lending, mortgage notes, startups, business investments, etc.), and NOT taking action to put your financial status into your own hands is far riskier than taking a calculated risk and investing in real estate.
Not to boast, but at this very moment the passive income that is produced from my real estate investments can completely cover my family’s living expenses. That’s called financial freedom! And it’s AWESOME! If I get hurt on the job and I can no longer fly airplanes for the military, I know for a fact that my real estate income will cover my family’s needs until I can find another job to replace my W-2 salary that the military provides. That’s pretty cool.
Many of my colleagues ask if I’ve lost money in real estate, and the answer is yes, most definitely, but losing that money was a huge lesson learned and it taught me how to be a smarter investor, to which I’ve used that knowledge to make that money back, two-fold. Think about how many successful entrepreneurs have gone bankrupt, learned from it, then made their millions back within a few years of losing everything. The power of learning through doing is unbelievable.
So, my challenge to you readers is this: learn about real estate investing, learn how to take calculated risks, and put your financial future into your own hands. Relying on an outside entity to do that is far riskier.
Written by Stuart Grazier