I’m going through something. As a matter of fact, I’m going through a few things in my personal life and in business, particularly with some things taking longer than anticipated to get done. For a guy like me who loves to close loops, it’s frustrating and stressful. I don’t like it one bit. Some of it is out of my control, so even if I wanted to elaborate, it’s not really useful at this point, and I’d rather share the entire story with you later. But I will talk about a few things in my past that were uncomfortable, because this is the question: can you sacrifice comfort for financial freedom?
These uncomfortable experiences I’ll cover ultimately carved a path toward passive wealth using rental properties and left me with income and capital I didn’t have before. Even if I hadn’t done them, I could have been in a much worse place, so it was a big risk offset. Let’s jump in.
My first example is when I bought my first home at 19 while working as a web designer. By 21, I left that job and had to rent every single room out to buy myself time to find another job. It was uncomfortable, particularly because I made a makeshift bedroom in the back of the garage so I could rent out every bedroom and the rest of the house. It was tight, and my girlfriend at the time wasn’t a big fan of it, but luckily she stuck through. I found a job within 30 days, and while it ended up being 2-3 months total, those last 30 days were critical. I had personal expenses and could have faced foreclosure, but that roommate rental income bought me time and was immensely useful.
In 2015, I purchased a property and spent about $120,000 on renovations, converting the basement to a studio and a barn used for woodworking into a carriage house. The property itself was $150,000 and essentially became a main house, studio, and carriage house—a triplex. I pulled out a lot of debt from equity in another property and credit cards to make it happen, which was uncomfortable and stressful, with debt mounting at once. There were surprises in construction, corners cut by contractors, and the project took about six months, forcing me to learn by experience. But ultimately, while the main house initially made $1,000 a month (unheard of now for a 3-bed, 2-bath), converting the other spaces increased it to $4,000 a month fully occupied, and the property value doubled to nearly $400,000. Again, it was income and capital I didn’t have before, gained through taking that uncomfortable step.
During the 2020 pandemic, I did something similar, purchasing a condo for my mom to be closer to supermarkets so she wouldn’t have to walk far. I put myself in an overly risky position, and it was awkward and stressful, worsened by a partnership that broke down, adding to the financial strain. I moved into the smallest room in my house to save every dollar to buy another property and avoid losing earnest money. Sometimes in these situations, it’s better to lose earnest money than force a deal, and this condo ended up being a break-even scenario with half rented and half for my mom. I pushed hard to get that deal done to at least earn something, but it didn’t, and I lived uncomfortably for 6-12 months. While it brought some happiness to my mom, I could have just rented her a place with much lower risk for the same break-even result.
These experiences show that this stuff is uncomfortable and stressful and not for everyone. Some people may prefer using their credit cards or equity for vacations, which is the alternative, but there are risks in spending on things that don’t bring a return. People often don’t think about how spending tens of thousands on vacations keeps them in comfort but doesn’t offset risk or bring financial return. The only way to mitigate risk while building financial freedom is to invest in education and take calculated steps toward it.
The biggest lie you can tell yourself is that you control every single point of your comfort. It’s untrue. We’re seeing sectors diminish rapidly, and it’s unwise to think your job or career will always keep you secure. If you truly want financial freedom, there will be sacrifices and uncomfortable moments you must be real about to make it past the valleys and experience many mountains, as I have.
If you have questions, drop them in the comments, and I’ll see you in the next episode.