Today, Kevin Guz explains the difference between being rich and being wealthy and how you need both in your life. Long term investments that bring passive income can help build your wealth.
Mike: Welcome to the We Buy Ugly Houses show where real investors share real investing stories and lessons from the trenches, where our team buys thousands of investment properties each year. Now, let’s meet today’s host.
Kevin: Hi, my name is Kevin Guz, and I am a real estate investor and HomeVestor franchisee here in Dallas Texas, and today I’m your host of the We Buy Ugly Houses show. And today I want to talk to you briefly about the difference between being rich and being wealthy, and how real estate investing plays into both. And what’s important to know is that there’s a difference between being rich and being wealthy.
You can be very rich without being wealthy, and what that means is we all probably know people who make a lot of money. Every other week, there’s a huge paycheck paid right into their bank account. However, they’re struggling, and they’re pedaling as fast as they can because they’re spending that money. They’re making a very rich and healthy income, but at the end of the day, there’s nothing left in the bank.
They’re pedaling as fast as they can to support a lifestyle that’s driven by the only riches coming in, and at the end of the day, there’s no wealth. There’s nothing left over. There’s nothing that they can depend on for the future, and it keeps them pedaling and pedaling just as fast as they can. That’s example of someone who is rich and not necessarily wealthy. And there’s nothing wrong with being rich.
You can be very rich as a real estate investor, and you can equate that to the wholesale or the rehabber, those investors who are constantly working to buy and sell houses and make what I call lumps of cash versus streams of cash. That generates riches. And I stress, there’s nothing wrong with that, but the beauty of real estate investing is it allows you to be both rich and wealthy ultimately. Not overnight, but with time.
Let’s talk about wealth then and what that means and how it applies to real estate. You become rich first as a successful real estate investor, I’m sure, and ultimately though you accumulate wealth. And what that means is as you continue to do a wholesale deal, or you continue to do fix and flips or rehabs, you accumulate those lumps of cash, those immediate returns that creates the riches.
But the beauty is, with real estate, you’ll then turn some of that into future investments, and buy and hold properties or rental houses, and that’s where you’ll create the wealth, and ultimately get the best of both worlds. You’ll have the riches, which is the income, and you’ll have the wealth, which is the accumulation of assets and cash flow that’s coming from those rentals.
And why do you want both and not just one or the other? Because they both obviously, sound pretty good. Keep in mind the caution is that riches, they can hold you hostage and wealth is what will set you free. And that’s why so many people find their wealth in real estate, and find their riches in real state, but you’ve got to be careful. I stress set aside some of that income that you’re generating to buy those buy and hold properties, those rental properties so that you can have both the riches and the wealth.
The riches will hold you hostage if you don’t have the wealth because they’ll keep you pedaling faster and faster as I said because you’ll be spending that income as fast as you can to maintain a lifestyle. But the wealth will set you free. Meaning, at some point as you accumulate rental properties, buy and hold investments and they keep accumulating more passive income for you, they’re going to create a wealth that’s going to set you free or get you off that bicycle or that treadmill that keeps you so busy working so hard to earn the money to support your lifestyle. And the rentals are what will set you free and bring you that wealth.
So with that the beauty of real estate investing is that it can generate both riches and wealth, and nothing’s wrong with either of them. But I encourage you to seek both of them because that’s where the true rewards of real estate investing will come as you accumulate riches, and you build a long term wealth, and you can do it in one place with real estate investing. I look forward to talking with you again real soon and on the We Buy Ugly Houses show.
Mike: Are you looking to get started in a real estate investing or take your investing business to the next level? HomeVestors, the We Buy Ugly Houses folks, is the number one home buyer in America, where our franchisees purchased thousands of houses each year. Many of which started with little to no experience.
If you’d like to chat, please visit uglyopportunities.com/contact. Learn more from the We Buy Ugly Houses show, an amazing HomeVestors team, by watching more shows at uglyopportunities.com/show or by finding us on iTunes or Stitcher Radio.