I hope that you have been enjoying the warm weather. We just got back from a week long Baseball tournament in Cooperstown, New York. Home of the baseball hall of fame, and more baseball souvenir shops than I have ever seen. My oldest son’s team played against 48 other teams from around the USA. The team did great and ended up placing 13th in the tournament. We managed to get to see a few sites while in the states including the Howe Caves. If you are in the area, I would recommend eating at Brooks’ House of BBQ, great atmosphere and awesome food.
Being able to take these types of vacations with my family are part of my big ‘why’ of getting into Real Estate Investing in the first place.
There seems to be a transition that many real estate investors make in order to move into different services within the real estate industry to become a Realtor, Mortgage Agent, Contractor or Property Manager. I respect other real estate investor’s choices to do this, but for me I never wanted to leave my profession as a teacher to do one of these jobs. In fact, I still really enjoy teaching, I just do it a little differently now than in a classroom.
I had a really interesting conversation with a real estate investor in Alberta, who shared with me a unique way to look at the type of business that are out there. It is a simple but effective way of classifying businesses. She declared that she wants to be a Type 5 Business owner.
She explained that there are 5 types of businesses:
Type 1 – Are people who make lots of money, but have no time. Examples would be business owners, professionals, and mega sales people on commission.
Type 2 – Are people who have lots of time but no money. Examples of this would be students, many retirees, and the unemployed.
Type 3 – Are people with no time or money, typically employees in a 9 to 5 job where they are barely making ends meet.
Type 4 – Are people who after working hard for 40 years as Type 1, now have time and money but poor health.
Type 5 – Are people who have time, money freedom, health, happiness and youthful vitality.
Why would you want to be a Type 5 Business Owner?
First you have to dig deep and have a good understanding of the reasons why you are investing in real estate or creating a business. That means looking deeper than just what might spring to mind right away which is the superficial – like making lots of money, travel, health, passive income, or driving a sports car. This could mean having an impact, which might be becoming a leader in your community, helping others to succeed, creating a new charity, or something more familial like being able to give all your focus to a sick family member or friend.
We all start working in the Type 1-3 businesses, some people might even be at the Type 4 stage right now, but what you do next is more important than where you are now. You can always change where you are, if you are willing to change what you do.
What does it mean to have money freedom in a Type 5 business you might be asking? Well, if you stopped working today would you have the money to support yourself and your family until you die? Could you pass-on your wealth to the next generation? What if you got extremely sick – would you lose everything? Will you have the health and youthfulness to enjoy your wealth? Definitely some interesting questions to ponder.
Creating a Type 5 business means working hard and smart at the same time, in order to design the life that you want to lead.
Please complete the poll below and let me know what type of business that you are currently in.
Quentin D’Souza is the Chief Education Officer of the Durham Real Estate Investor Club. Author of The Property Management Toolbox: A How-To Guide for Ontario Real Estate Investors and Landlords and The Ultimate Wealth Strategy: Your Complete Guide to Buying, Fixing, Refinancing, and Renting Real Estate.