Real Estate is Real

for blog

Two things got me thinking.

1. I’ve been reading more and more about real estate lately. I’ve found The Bigger Pockets Podcast, and I’ve started reading things like Building Wealth One House at a Time and Buy It, Rent It, Profit. I have been learning, but I’ve also been encountering some of the hype and read-my-other-book and come-to-my-workshop nonsense that comes with the territory.

2. I was listening to this week’s episode (#543) of This American Life this morning. They spent quite a bit of time talking about a new get-money-from-your-friends scam called Wake Up Now.

These things got me wondering if, by buying this investment property, we hadn’t bought in to some kind of scam. We are still at the stage where we are pouring money into this property and is not fully rented. What if it has all been some kind of mistake?

Well, tonight I was having a glorious couple hours of productive solitude, painting and cleaning at the new property when I heard someone knock on the door. It was the next door neighbor with a friend who wanted to see the place because she is in the market for a new apartment. So I showed it to her, despite the fact that it is knee-deep in construction debris and tools from one end to the other. It made me realize again that real estate *is* real. It’s a real product, with real customers who have a real need you are filling. And because it is a real business and not a multi-level marketing scheme, you don’t have to sell the product or the system to your friends. Complete strangers will agree to hand you money on a regular basis. And sometimes, they will even come knock down on your door to do it.


Believe the Numbers

Some people would think that the idea of “believing the numbers” is silly. What else is there to believe? Even those that put their faith in the supernatural, if they are numbers people, will talk about the number of ancient scrolls corroborating each other and our modern Bible. They will share with you the dates of various Biblical kingdoms, will quantify–in percentages–the likelihood of special creation vs. the unlikelihood of evolution. Numbers are a language by which the heavens and the earth can be understood.

For others, numbers are inherently untrustworthy. They say figures don’t lie, but liars figure. Statistics are manipulated every day. And how much can you trust cold, hard numbers to quantify the essence of life, anyway? How, really, can you trust the math of aerodynamics? What is to stop a ton of steel from falling straight out of the sky? Numbers are slippery creatures that can take hours to nail down in the right formulas, rows, and columns. And if you’ve forgotten a small decimal point? All is lost.

For much of my life, I have been the person in the second paragraph. And I’m writing this post in case any of you are like me. In case any of you have had to sit there in front of a spreadsheet and bet your future on the accuracy of the numbers in front of you. I’ve had to convince myself to trust the numbers. My gut would be much happier if we were that much closer to paying off our primary residence. But instead, we have taken out a HELOC and taken a chance on our future because of what the spreadsheet says. I’ll let you know how it works out.

Track And Face the Numbers

The first step towards Better Living Through Math is to track and face the numbers. It’s closely related to the notion of First, Admit You Have a Problem. Since this is my fourth post and we now know each other so well, I’ll dive right in and use a personal example: my weight.

Let me start by saying that I am sensitive to the issues surrounding fat shaming, unrealistic social expectations, body image, etc. So I am going to tread carefully and I am only going to speak for myself. I currently weigh more than is medically advised. With the help of my doctor, a nutritionist, and the people at the gym, I am changing that because I’d like to move through this world in a body that is strong and healthy and capable of enduring the crazy adventures I have planned, with minimal pain and maximum enjoyment.

How am I going about this? By tracking and facing the numbers. Specifically, the numbers on the scale and the numbers on my food-logging app. They represent the truth about how much progress I’ve made towards my goal, how much ground I’ve lost, and how far I still have to go.

To be financially healthy, you also have to track and face the numbers. Numbers like your bank balances, debt, credit scores, net worth, etc. Just like hopping on the scale, financial reckoning is very often painful. But if you are going to build the life you want, there is no way around it. So rip off the Band-Aid and figure it out NOW. Quantify your position. Take responsibility for it. Hookup your accounts to (easiest). Track every single expense into self-made categories in Quicken (detailed and thorough). Use a spreadsheet (cheap, but harder to get the full picture long-term). Get a pencil and a scrap of paper and a stack of your bills (if that’s what you have, work with it). Just do something. And do it now. There are few guarantees in life. But self-made behavioral issues do NOT fix themselves. It’s your life. What are you going to do with it?