Ok… so I admit it, this one happened by accident…but it was the best “accident ever”!
5 years ago I did not know the difference between “active” and “passive” income.
Here’s how it happened…My husband and I decided to temporarily rent out our house in Los Angeles and “downsize” to a condo to lighten the financial burden while I scaled back on my “day job” to ramp up my start up projects. We completely restructured our personal budget for one year to allow me the time needed to focus. It was “massive action” for sure but we knew that’s what it would take for us to get the companies off the ground and to feel financial secure at the same time. We knew the house would be there for us to go back to as soon as my income re-stabilized (Sometimes you gotta take massive action to make a major change happen).
After a year we decided that we actually liked the downsized lifestyle and ended up selling the “big house” in L.A and traded it for 8 income generating smaller properties all over the country which ended up being a HUGE blessing in disguise! We learned quickly how to find the best ROI, the most reliable on site management (lord knows we don’t have time to answer tenant phone calls), how to deal with vacancies, maintenance issues, evaluate ” cash flow” vs “equity property opportunities”, get creative (very creative) with financing, deal with partnership investments, and so much more.
We had a crash course in active vs passive income and balancing personal finances and we had to figure it out quickly. But 5 years later, these hard decisions were some of the best decisions we ever made!
Now real estate investing is a major focus for us in addition to the success of the start up companies! We are still learning all the time but we understand a lot more about active vs passive income and how to evaluate investment opportunities.
I LOVE sharing this story because it is a perfect example of that life happens FOR you and not TO you! We made the most of a situation that many would have felt limited by and it has been an amazing journey.
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