January 20, 2022
Joe Fairless

JF2697: How to Live a Balanced Life – The Investor Lifestyle


 
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Maintaining a good work-life-balance can be difficult to accomplish. In this episode, Travis shares the lessons he’s learned trying to navigate a good balance between work and the other aspects of his life, such as health, relationships, and more.

Want more real estate advice? We think you’ll like this episode: JF2627: 5 Ways to Align Your Investments to Achieve Your Goals | Actively Passive Investing Show 67

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TRANSCRIPTION

Travis Watts: Hello, everybody. Welcome back to another episode of The Actively Passive Investing Show. I’m your host, Travis Watts. As always, I appreciate you guys so much for being here. I have a very exciting episode to share with you here today. What we’re talking about is how to live a balanced life. Specifically, from the perspective of being an investor, whether you’re an active investor or a passive investor like I am, I just want to talk about finding and creating a little bit of balance and how that plays into investing. You’ve probably heard the term “work-life balance” in one form or another, at one time or another. It’s kind of what we’re talking about but there’s a bigger picture here that I want to address, there’s something very profound, a very simple message that I want to share with you in today’s episode.

With that in mind, I want you guys to think about this real quick. It’s tough to be rich, let’s say, but be in poor health, and to live the good life. Equally so, you could be in great health and great physical shape, but if you’re living at or below the poverty line, or piled up in debt, it’s also tough to live the good life. Even if you have the health and the wealth under control, but you’re in, let’s say, a terrible relationship that is dragging you down and making you depressed, it’s also tough to live the good life. I want to help you guys with balancing these different aspects and just talk about a few things. Now I’m no coach, guru, or expert here, and I’m not pretending to be but I do want to share some things I think are impactful and insightful with you.

Let’s kick off this episode with a visual exercise really quick. What comes to mind, visually in your mind, when I say the words financial freedom? I’ll give you a minute here to think about it. Financial freedom, financial independence, not having the obligation to have to work, it’s a work optional lifestyle. What would you do with your time? What does financial freedom mean?

Now, whatever you’re picturing in your mind, the first thing I want to address is resistance. I think there’s a true benefit to having some resistance in your life, something to push against. A couple of years back, Joe Fairless at the Best Ever Conference… I can’t remember if it was the 2019 or 2020 Best Ever Conference that happens every year out in Denver or in Keystone in this case. He was talking about having a thorn in your side, something that’s kind of irritating, that agitates you, that makes you want to take action, you want to address it, you want to stay active, move forward, push through it, and fix the problem. It’s good sometimes to have a thorn or a pain point, so to speak.

Think of it like this, you might have a vision when I asked you about financial freedom, sitting on the beach and drinking pina coladas, or hanging out on a yacht and popping champagne. While those things can be fun for a period of time, they’re really not sustainable and they’re certainly not going to be fulfilling to you long term. As appealing as that might be for a weekend or even up to one week, I think we would all get pretty bored and become obese alcoholics over time if that’s all that we did with our spare time.

A practical example in real life is to think about Bill Gates. He ran as CEO and then is the chair of Microsoft, and this is what he did actively. But as he realized –a little late in the game– he had more than enough wealth, he stepped down from being active on the job and he started being active and charity. He runs a really huge foundation so he’s still active, moving forward, using his brain, and applying value to the world just not in a work sense. He’s not at a cubicle nine to five, had to punch his time in and out, he’s still producing, but in a different way. That’s what I want to have you guys think about for yourself. An interesting little side note too, before this episode I was just reading. There’s a lot of research out there, believe it or not, of children that come from upper middle class to wealthy lifestyles that are handed a lot of things. The anxiety, the depression, the substance abuse statistics shoot through the roof. You might be surprised to learn that. But basically, at the end of the day, what it comes down to is that as far as resistance, there was nothing to push against or to achieve.

There’s a lot of fulfillments in setting a goal, going out there, grinding it out, achieving that goal, then feeling that that success and that dopamine rush. But if it’s all just handed to you as an end result, you can easily take that for granted. There’s a great article written by the way on apa.org, American Psychological Association, I want to say, don’t quote me on that. It was by a Sonia Luthar Ph.D. She’s a professor of psychology and it was about what we’re talking about here. The only point that I’m really trying to make with any of this is that you do need, in my opinion, some resistance and something to push against to help you move forward. Be thinking about that. I think a lot of people get fearful of retirement because you hear these scary things like once you stop working, you start dying, or whatever. It’s all about figuring out what it is you’re going to do and having a plan. It’s something to start thinking about sooner than later, and hopefully, you can be in a position as an investor to retire early if you wish to do so, or at least move to part-time work to free up time to do other things that are meaningful to you.

Break: [00:05:57][00:07:36]

Travis Watts: As I always say, the goal of investing for passive income is to do less of the things you don’t enjoy and to focus more on the things that you love, quite simply put. Some resistance is good, not all resistance all the time, you got to find a balance there. Let’s transition into talking about a few things in regard to health. Quite frankly there’s a lot of marketing and sales crap out there in the health space, but let me make health simple for you. It comes down to just diet and exercise, that’s it, simply put. It doesn’t have to get all fancy with this keto, vegan, vegetarian, paleo, and all this fancy crap. Look, you and I both know what healthy food is compared to unhealthy food. The bottom line is just to pay attention to what you’re putting in your body. Avoid fried food and processed things as much as possible, drink lots of water, and eat more greens. That’s really it. You do you, you figure out the specifics of what works best with your body. But generally speaking, just avoid the nonsense.

Now as far as exercise goes, again, no specific routines, or there isn’t just this one trick of the trade. But for anybody who’s traveled outside the United States, what you may have discovered is exercise is actually a free thing. You can actually go on a walk, a jog, a run, and it’s free. You don’t need a treadmill in your house or these fancy peloton bikes. You can get a bicycle for 25 bucks on Craigslist or a garage sale if you need to, or a pull-up bar for 20 bucks on Amazon. You can do pushups at home, you can do sit-ups at home, everything that you need in terms of exercise truly is free. But again, we live in a capitalistic society so we get sold on a lot of things and we think it needs thousands and thousands of dollars of equipment, fancy gyms, orange theory classes, and all this kind of stuff. There’s nothing inherently wrong with any of that if it helps you or if you enjoy it. Generally, get your heart rate up, exercise, eat better foods and less processed foods. That’s really it.

There’s a great quote that I heard years ago, “It doesn’t matter what you do 10% of the time, what matters is what you do 90% of the time, that makes all the difference.” You can go eat cake, ice cream, French fries, processed foods, drink alcohol, and do all these things but try to limit it to 10% of what you do. The rest of the time try to eat right, try to exercise, try to do the right thing. Simple but not easy, as I like to say.

Now let’s transition to finances and wealth. My simple take is this, invest in assets that produce passive income and use that passive income to provide yourself with more options in life, or to enhance your lifestyle. It’s whatever you want to do with it. But the bottom line is to invest in assets that produce passive income, or dividends, or cash flow, or interest, or royalties, there needs to be an income stream that is being paid out to you. That is the name of the game, that is my mission, that is my message, that is what I live and breathe, that is what I teach. These assets can be active or passive. I’m not saying everyone has to be a passive investor or do what I do. I’m saying if you’re going to be an active investor, focus on cash flow and passive income, don’t focus as much on speculation and trying to time the market and trying to say, “I’m going to buy this property today at this price and fix it up. I think I’m going to sell it for X down the road.” Because you never know, the Fed comes in, they change interest rates, the whole environment changes, we have a new virus that comes out, it could all just screw up your entire plan.

M best advice is to focus on passive income. When you focus on the buy low and sell high mentality… I covered this, in fact, in a few episodes ago, so go check it out if you haven’t. It’s called The Lost Decade, How to Avoid 0% Returns. It’s how you could potentially get hosed, so to speak, when you’re doing buy low sell high and trying to speculate. There are like a thousand ways you could get hosed. But the main thing is it really happened in real life in a big, big way. It was about people who invested with their IRAs, brokerage accounts, cash, and just index funds in general, just the overall stock market, not really paying attention to cash flow or dividends, and just saying “I just want to participate.” Then your account trickles up, it trickles down, it trickles up, it trickles down. From January 2000 to December 2009, you basically made $0.00. Check out that episode for more.

The last thing that I want to say about wealth is trying not to get caught up in what I call the success cycle. Again, I made an episode on it and I also wrote a very lengthy blog on this. It’s this concept of making a million bucks, then once you get to the destination, you go “I need two million dollars.” When you get to two million you go “Four million is kind of what I need.” Then you get to four million and now you need 8 million. The point is you’re going to work till the day you die, you don’t know how much is enough, you don’t know why you’re doing what you’re doing in most cases. Another phrase for this could be “keeping up with the Joneses.” If you’re comparing yourself to others and saying “I’m not rich enough, I don’t have enough, I need two homes, three homes, I need five cars, I need a boat, I need a plane I need.” It never freaking ends so don’t get caught up in that. Truly reflect on what matters to you, what brings you the most happiness in life, focus on those things, and know how much is enough.

There was an episode here on the Actively Passive Show in August, I believe, of 2020. It’s called How Do You Know How Much is Enough? Something like that, so go check out that episode if you haven’t already. Listen, you guys. The simple point is this, the average US income, I believe, is still around 50 to 60,000 per year or something like that, per individual. A million bucks invested at 8% a year is $80,000 per year. Quite frankly, most Americans would be a-okay and happy with a million bucks, and that’s it, that’s enough. If you’re the person grinding it out for 50k a year and you can have 80k a year that’s tax-advantaged, that’s almost double your income at this point, that’s more than enough for a lot of people. Maybe you don’t have to be someone with $100 million to be happy, maybe one million would suffice. So know your number, know how much is enough, and just think about it in terms of being an investor.

Break: [00:13:52][00:16:49]

Travis Watts: Alright. The last category I want to talk about is just relationships in general. We’re talking about friends, family, colleagues, spouses, kids the whole deal. Listen, again, I’m no expert in this area, I’m not pretending to be, I want to be as candid and humble as I can with you guys, especially in this category. I’ve struggled a lot with finding balance in this area. I mentioned that when I worked 100 hours a week away from home that was one extreme where I had no balance whatsoever. Then I transitioned out of that and I met my wife who was my girlfriend at the time. When we started dating, I lost connection with a lot of my friends and things because I was spending so much time with her. Then later, I tried to bring the friends back in with my spouse, but then I lost touch with some of my family members. It’s been an ongoing struggle and an ongoing battle for me. But there’s a few things I’ve learned, a few takeaways that I think you might find useful.

Rule number one, at least for myself, has been don’t be overly independent thinking “I can do it all on my own. I don’t need anybody else in my life.” But also, don’t be overly reliant on other people. If you’re not being a social butterfly seven days a week, then you’re depressed. It has to be the balance somewhere in between. You do need people in your life or it’s a pretty lonely existence. But the hard truth is that people will let you down here and there. You can’t hold your expectations too high. Number two rule, for at least myself, –I’m not giving advice to anybody else but just sharing in case this is helpful– is you shouldn’t always get your way. I think it’s nice to have a healthy balance there. I think it’s what’s led to a fantastic marriage so far with my wife is that we both are able to voice our opinion and rationalize together. But we trade off on who wins what battle, so to speak, and there are no hard feelings.

It’s just trying to find that balance. You pick out the colors for that room, I’ll pick out the flooring, the ceiling fan, or the artwork on the wall. We try to work together. It’s not just “Nope, it’s my house my rules. This is how things go.” Because that really puts a big crunch in things. Be okay with not always getting your way. It’s also nice in the workplace, it’s also nice in terms of investing. Things aren’t always going to go as planned and I think that’s a good lesson. I’ve invested in stocks, for example, that I thought, “Oh my gosh, they just fell 30%. I’m getting a bargain. I’m going to buy in.” Then they fell another 30%. Now I’m stuck holding the bag and that’s okay because it teaches you lessons that maybe there’s a lot of volatility in the stock market. If you can’t stomach that or you’re not okay with it, that may not be a great investment for you, I don’t know.

The last thing I want to point out, rule number three is to diversify who you spend your time with. For example, I spend some time with my mentors and I have quite a few. Mentors help pull me up and guide me towards where I want to be in terms of my goals. I also spend some time with my peers, with colleagues, with my spouse, with my family, and with my friends. That’s nice too and it has its own benefits. Then I spend some time educating others that are trying to get on the path that I or other people like me are on and trying to educate and inspire. That’s why I do this show, so again, thank you guys so much for listening. But this is part of how I spend my time and diversify it up. You guys, the perspective is the biggest benefit here. You get a ton of perspective and gratitude and fulfillment, at least I do, from diversifying out. I don’t think it’s that healthy, personally, to spend all your time with one person, one sector, or one group. I think you can get very biased, have black and white thinking, and just miss out on a lot of learning opportunities.

With all of that, I guess my final thoughts to conclude this episode would be that, unfortunately, I suppose, there isn’t just one thing that makes us happy or fulfilled. It’s a combination of all the categories that we discussed. Of course, we could probably talk for several more hours on these topics, and we could probably add a lot more collaboratively to the conversation. But hopefully, that helps and it’s a few practical takeaways or tips. I wish you and your family the best of luck on your journey. Always happy to be a resource for anybody here listening. If you have any questions reach out to travis@ashcroftcapital.com, joefairless.com. I’m on LinkedIn, social media, Instagram, etc. Thank you, guys, for the feedback and for the comments. Have a Best Ever week everybody. We will see you next time on The Actively Passive Investing Show.

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