March 17th 2025
Buy one property a year for ten years. Never amortize for more than 15 years. Never sell. That in a nutshell is the basis of The Money Machine Seminar. I first rolled that seminar out in 1989. Unlike today, nobody was doing real estate investment seminars back then. Today with all the ‘nothing down’ ‘get rich quick’ schemes out there, people are jaded when it comes to courses on real estate investment. But back 36 years ago the room was packed.
I often wonder how many people who attended those early seminars put the principles into practice. A lot I hope. I know I certainly did. And for anyone else who did and stuck with it, the benefits these days would be substantial.
But the process itself isn’t easy. The reason being that for a lot of years the apparent payoffs are very minimal. The goal always is getting those properties paid off. Every surplus dollar was being spent on retiring the debt. Short term pain for long term gain. And during all those years, the middle years I’ll call them, when you are sacrificing to save down payments. Working hard to keep the properties in top shape. Dealing with tenant issues. It seems the only people who are benefiting are the banks and the government. You do all the work and they get all the benefit. But as you hang in there: acquire, amass, maintain and discharge the debt, there is a payoff coming. One day those properties will be free and clear and all that passive income will be yours to enjoy. Carefree and prosperous retirement.
But depending on your age when you got started and how dedicated you were to your goal of paying off the debt, the chances are you are going to find yourself in a position where the mortgages have been paid off, the properties are clear of debt, but because you are still working, you don’t need that passive income stream to live on. You’ve reached the sweet spot.
Now you can use that passive flow of rental income for all sorts of things. Rapidly acquire down payments for more property acquisitions. Major renovations and upgrades to property. Vacation fund, etc.
The other day on Facebook I happened to see a short reel where Robert Kiyosaki, author of ‘Rich Dad, Poor Dad’ was speaking about passive income. He’s been involved in investment real estate his whole life. In this short talk he said ‘I wanted a Rolls Royce. So, I went out and bought a warehouse. And it paid for my Rolls Royce.’
Over the last 5 or 6 years I purchase 3 more properties. All I extensively renovated. One I purchased with 20% down. The 80% mortgage I amortized over 10 years but paid it off in 4. At the same time, I spent over $600,000 totally renovating it. As I did for each of the other two. All from the passive income my rentals generate. I took a 2 week holiday in December and another 10 days in January. Also paid for out of my rental account. As I said, I’ve been at this for a long time. But I’ve hit that sweet spot. I’m still working, and so my passive income from my rentals is being used for other things. Lots of other things.
When you first get started, retirement can seem a long way off. But how quickly the time passes. And as you stay at it, you’ll find ways to build your portfolio quicker and get those mortgages paid off sooner. Yes – a long period of delayed gratification. But that goal of prosperous retirement will absolutely come true. And in the meantime, you’ll arrive at that spot, that sweet spot, where you don’t need that passive-income to live, but where you’ll have a lot of fun finding places to spend it.