You wake up, ugh, another day of work. Is it Friday yet?
You get the kids to school or daycare after a hectic morning and finally punch in at work. Finally, you get to work but have to walk past that one person who’s always smiling and happy, it’s so annoying.
You drone through the day thinking about your weekend plans.
Sure, there are a few faces around the office you like, so the entire day is not wasted. You get to catch up with some pals.
Finally, it’s time to go home. After the commute, it’s basically dinner time when you get home and get the kids to bed.
You sit down and you’re….exhausted. You sit on the couch to rest, and next thing you know it’s getting late and time to go to bed.
Another wasted day…and you think “I wish I had some work-life balance.”
Then you wake up again…
What is Work-Life Balance?
Work-Life balance is the goal of balancing your time between work and other parts of your life including family, social, leisure, and other personal interests…
Guess what. you’re wasting your time…
It’s not because the cause isn’t noble. But then again, people spend their lives trying to find Big Foot, aliens, and the Loch Ness Monster.
If it doesn’t exist, you won’t find it no matter how much you search for it.
A job is like indentured servitude. Unlike indentured servants of the past, you aren’t bound to a specific employer. But, you are bound to employment within the system.
That’s the reason why you’re unhappy and looking for balance
But, you can’t balance that.
Work vs a Job
Work is defined quite simply as an activity involving mental or physical effort done in order to achieve a purpose or result. Or it can be an activity done as a means of earning income.
A job on the other hand is a paid position of regular employment.
Do you see the difference?
Work is an activity, a job involves employment. While they are clearly related, at a minimum we need to see they are different.
If you chase the idea of job-life balance, you’ve accepted that you will always have a job and it is separate entirely from and incompatible with your ‘life’.
Some people can accept their role inside the corporate system. That is the person who is always happy at work. They don’t seek work-life balance because they are content.
Maybe they don’t even recognize what’s controlling their lives, or maybe they don’t care.
Either way, that’s not you. You want something more.
On the other hand, if you pursue some activity that you are passionate about and love that also happens to earn some form of money, you are ‘working’.
Here’s the kicker, If it is a personal interest, passion, or hobby, it’s already part of ‘life’.
…and that’s why chasing work-life balance is like chasing a pot of gold at the end of the rainbow.
You either accept your life as a worker bee, or you are unhappy. There is no way to be a worker bee for a little bit of the time and be a lion on the hunt the rest of the time.
There is simply no way to balance between those two. You need to be one or the other.
You need to accept that you are a worker bee, and be content. OR, you need to be the thing you want to be.
If you are the thing you want to be, there is no need to find a ‘balance’ between being that and being something society needs you to be.
That’s why work-life balance doesn’t exist.
That all being said, achieving balance is a part of all aspects of life.
Eat too much or eat too little, you end up in the hospital either way.
It’s like all those contradictory food studies – wine is good for you one day and bad for you another day. Or maybe this week it’s potatoes that are good for you or bad for you or… who knows?
That’s because literally everything in life needs to be balanced.
But, that’s just life. Why are we looking at all the various pieces of life that need to be on the scale?
Remember, though, a scale can balance things because it has a fulcrum. And, just as with a scale, your life has a fulcrum as well.
All scales have a fulcrum and all lives must have a focus.
This is the singular thing that is most influential in your life, which directs or impacts all other decisions in your life.
For some people it’s religion. They always think about what is written about what God wants. Or they pray and look for guidance on various things.
They act either out of love/respect for what they believe God’s wishes are. Sometimes they act out of fear of God’s judgement.
For other people, their lives are balanced around friends, family, their community, or something similar.
They dress a certain way, buy certain types of vehicles, houses, etc because of how their social group will perceive them.
The job and the life of work is chosen because that is what their peers and parents expect them to do.
They want the acceptance of the group, or perhaps fear their judgement.
If you want to change who you are, you need to change the fulcrum and stop focusing on what’s on the plates on either side
That’s how entrepreneurs are different. We create our own businesses and make that our fulcrum.
Your Business as Your Fulcrum
If you love to do something, you’ll naturally want to do it more and other activities just won’t seem as important anymore.
That’s how entrepreneurs can work 12 hours or more, 7 days per week. They burn with passion for it. The business they are building is everything to them.
Of course, no one can work incessantly with no leisure or time with their family.
Maybe they get their spouse and children involved too. So their passion becomes the family passion. Now they spend time together and build their future.
They make new friends and go to dinner or parties with them. These friends are also entrepreneurs who have intense passion as well.
You raise your children and show them how passionate you are and teach them how to find and cultivate their own passions.
As they get older, they learn that life is not about a modern form of cubical slavery, but instead aboutthey pursue those passions and build balanced lives around what makes them burn.
Soon, everything in your life has some piece of your passion in it in some way.
This is balance.
Net Operating Income (NOI), Explained
Goes without saying, if you’re a new landlord, there are some metrics you just have to know. And if this is the most important metric to master, this one may be the most important, period…
(Pause for dramatic effect…)
Whether it’s vetting, buying or managing real estate, NOI—short for Net Operating Income—is arguably the most crucial metric for real estate investors.
NOI is simply your net profits from rental income, after your expenses are paid. Here’s why it matters and why it’s more important than you think.
Your bottom line
When you have a rental property, your end game is to make a profit. You get your rental income. Deduct your operating expenses like maintenance, repairs and so on. Now you have your net operating income, which is your bottom line.
Net operating income is real estate’s equivalent to corporate finance’s EBIT. Here’s how it looks:
NOI = all revenue from the property – all operating expenses
It’s a simple enough formula, but there are ways you can manage it.
In business, there are two ways to increase profits. 1) Increase revenue. 2) Decrease expenses.
Simple enough, right? With rental income, there’s only so much you can do to increase revenue. So managing your OPEX is a basic but extremely important metric to monitor — and very often the hack for value-add investors to unlock crazy profits.
Here’s the real beauty of NOI. Unlike single-family properties, the value of income-producing real estate (using the cap rate formula) is derived directly from the net income you can squeeze from it. Not supply and demand. Not the market. Not the S&P. Not bubbles. None of that.
“Net Worth Hacking”
In other words, if you manage your NOI, you can literally enhance your asset’s value. This is at the core of the value-add strategy. This New Jersey group bought a building for $57 million, hacked the NOI through upgrades and management, and BOOM! Sold it three years later for $101 M’s.
DIY: How To Improve Your Personal Finances
Even if you’re not looking for a property this exact second, you always want to be improving your position.
So, focus on the downtime to improve your finances, get your debt squared away, and put yourself in a better position when you are ready to buy!
It’s important to be sure of your financial position before you buy a property because you might find it’s harder to get that property than you would have originally thought.
Here are a few ways to quickly improve your finances to help you save more, pay down more debt, and qualify for better loans.
One of the most common reasons that people struggle financially is because they simply don’t pay attention to what is going on in their own financial life. If you are not paying attention, you can’t hope to know what is going on and therefore know how to improve matters.
So, the first item on your list is to start paying attention to your finances!
When I’m working on a project, I’m laser-focused on the budget, the details, the costs, etc. But, sometimes in my personal life, I let this slide.
The reality is, when we do have a budget and focus on sticking to it, our bank account balances grow so much faster than when we aren’t using one.
I love to eat out, and my wife loves to buy small things around the house. One day, we looked back over the previous year of spending and found we each averaged over $1,000 per month on our hobbies!
By pulling back a little in each area, we were able to save over $1,000 per month but still do the things we enjoyed.
So, start by having a budget!
Even if you are financially well off and can afford most of what you want, by budgeting for the items and spreading the costs out over several months, you’ll find that you buy less, spend less, and save more.
Also, if you budget to pay down certain debts faster, you’ll see those balances dramatically drop!
So, do not overlook the importance of a family budget.
Save On Other Purchases
There might be a number of other big purchases you need to make before you get hold of your next property, and it is a good idea to make sure that you are only spending as much on those as absolutely necessary.
For any big ticket items, we actually start searching for them months or even a year in advance. For example, let’s consider kitchen appliances.
As you know, a full set of appliances can easily cost $5,000-$10,000 if you are getting high-end products. It includes a fridge, double oven, gas cooktop, microwave/fan, and dishwasher.
The first thing we did was go to the store and decide on two or three brands, styles and product lines we wanted. It’s hard to compare prices unless you are looking at similar products between stores.
Then, for months we’ll watch these items and their prices. Occasionally there will be sales and by tracking the pricing all year, we know which sales are worth getting or not. When we feel we are getting the best price, we’ll buy.
And by doing that, we can easily save $500-$1,000 or even more.
We did something similar with our TV, computer monitors, etc. Basically, anything that is currently working that we want to upgrade. Over the course of a year, we are saving thousands of dollars.
You might also use a money saving app to help.
Saving money in all these places will make an enormous difference when it comes to saving for your next down-payment
Pay Down Debt
With all the money you are saving by budgeting and by planning out major purchases, you might want to use some of it to pay down debt.
You’ll have to decide if it’s better to pay down debt or have a larger down payment because both will hold you back on your next purchase.
But, generally, paying down $1/month in debt is worth about $3/month in income. At least, as far as loans are concerned.
If you do decide to work on paying down your debt, I fully detail a unique debt pay down method to get you into your next rental property faster.
Increase Your Income
Most people just focus on debt, but the reality is you can only cut your expenses so much.
Income, on the other hand, has unlimited potential. So, why not focus on growing your income?
Increasing your monthly income can be done in a number of passive and active ways, and it is worth looking into as many of these as you can to find the right one for you. I outline a number of ways to increase your income in this article on how to earn $10,000 per month.
While earning $10,000 per month in side-income might seem a long way off, it’s important to start! Even if you can earn an extra $500 month now, and grow it slowly over time, it’s worth it!.
Don’t Focus on Just One Thing
As I mentioned already, focusing on just budgeting, or debt paydown can be detrimental to your overall financial goals. It’s important to combine a number of different things into an overall strategy, which includes budgeting, debt paydown, and increasing your income.
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