John Delia is a young developer and landlord from East Hills, NY now residing in Columbus, OH. He studies City and Regional Planning at The Ohio State University. Having started his own investment firm at age 21, he now writes and talks about building passive income through real estate and living life on purpose at Life Liberty n Property. You can follow him on Twitter @JSDELIA
As a young entrepreneur, I was hungry for success. I worked for a real estate company and I wanted to go off on my own into the business. As I laid the foundation, I began to do everything I could to increase my knowledge of the industry. I spent a lot of time reading posts on the Internet and in forums online. I attended events and read books at the local bookstore. I was preparing for what it would be like to have my own freedom and independence.
I knew real estate investing was the vehicle for me. Fundamentally real estate investing is a simple concept. Even though the concept was simple, I knew its impact could be profound. I knew real estate could create wealth and allow me to get paid while keeping the freedom of my time. I begin to plan and think about the life I could have with this financial success. Financial independence became a galvanized concept in my brain.
As I attended seminars, I met a mentor who introduced me to the concept of the upside down pyramid. This was a visual use to describe different income segments. The three sections represent the monthly difference between survival, comfort and being rich. The pyramid put income and finances in a new perspective. Because I was just starting out, I was at the bottom of the pyramid, in survival mode. I knew what that meant all too well. Seeing the framework allowed me to see the path to progress through each level until I reached my financial goals.
With this in my mind, I knew real estate was my vehicle to master the pyramid.
A networking connection gone wrong
A few years back I moved to a new city. I did not know many people, so a recent acquaintance invited me to his networking event. This was your typical networking social with other professionals and business owners. My friend wanted to introduce me to a buddy of his because he thought we would get along great. He introduced the two of us and sure enough we had a lot in common.
At the time, I was in my early 20s, and I was very excited with ambition to talk about business and money. As my conversation with the new connection continued, he stated he was interested in investing and doing well financially. Great! I felt the same way! Not missing a beat, I quickly asked him how much money he wants to make.
To my surprise he was set back. I quickly saw the expression on his face change from friendly and excited to angered and upset. I had crossed an invisible line and I didn’t know what I had done to offend him. To me, asking someone with similar goals exactly how big their goals were (in this case, how much money he wanted to make) was just a starting point.
Fast forward a few years and I am well on my way to reaching my goal. My new friend, however, is mostly in the same place he was. You see, having clearly defined goals is key to achieving success in life. For financial and business goals, this means knowing your “number”. I believe that knowing exactly what you’re trying to accomplish allows you to focus your efforts in business on reaching concrete milestones.
Think and Grow Rich
Napoleon Hill has become internationally known for his book Think and Grow Rich. For longtime I truly was just not interested in reading what Mr. Hill had to say. I did not feel I needed to know his opinion on wealth creation. I thought that I already had what it took and what I needed to get to my goal.
Going back to the story of the gentleman at the networking event. Despite my offense, he and I stayed in touch. Somehow we managed to develop a friendship and communicate every so often. In time he mentioned that he was reading the book and that I would probably like it as well. Valuing his suggestion, I decided to read the book. Interestingly enough Napoleon Hill mentioned that having clearly defined goals (and financial goals) were essential to reaching them. Surely I was quite impressed to see his analysis and endorsement of what I understood as fact.
How much money do you really need?
What is the first number that comes to mind when you think of how much money you really need? One million? Five million? Two hundred thousand? Without some serious soul searching and careful math, you really do not know. At this point you are only guessing. Let’s just say that we don’t want to leave something as important as your financial livelihood up to the chance of a guess.
Studies have shown that an annual income above US $75,000 per year does not increase the average person’s happiness. This may be true for the average person but some of us are different. Clearly some of us would be happy with less. But some people (like me) want more. A lot more.
There is a simple exercise you can complete to determine your freedom number. Simply take out a blank sheet of paper and a pen. Take a moment to close your eyes and envision the happiest perfect life. What are you doing? Where are you? What do your surroundings look like?
When you open your eyes, begin to list the things you remember most vividly and that would make you most happy. The purpose of the exercise is not to discount the intangibles in life. Those are truly important. But if we are honest with ourselves, we will admit that a truly wonderful life is a life free from financial worry. So, for now we are focusing on the tangible financial wants.
After all, they are easier to track progress towards than peace on earth! You may want money for a Caribbean vacation home, the ability to lease a beautiful car, or the comfort to help and take care of your loved ones. I’ve always believed in you can achieve anything you want. I know that to be true.
Once you have an itemized list of everything that has cost associated with it that will be needed for you to live the life of your dreams, add up the total. This is your freedom number. It may be a lump sum or a monthly amount. Either way, you now know exactly what you need to achieve to create the life you want.
Moving Forward
The most important number you should know is the amount of money it will take monthly to make you happy. Once you have’s goal in mind you can begin to work backwards to achieve your goal.
Hey Karen. Working backwards with your ideal monthly number is a great place to start. For me it’s probably about £5,000 per month pre tax. I would also need to have paid off all housing costs. The amount would my fiancé and I to live our dream of travelling the world during our retirment – moving from AirBnB to AirBnB. What’s your figure?
Knowing where to delineate your financial goals can help one to focus on their task. Thanks for this post.
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Having a clear goal is so very important when growing your business. Not only does it give motivation, it also gives reason for celebration once you reach it. Great article!