7 Wealth Creation Lessons From A Real Estate Multi-Millionaire
Kevin Green, self-made multimillionaire and one of the UK’s biggest residential landlords, is a wealth creation expert with extensive experience in the property investment world. He also heads a number of successful companies and other non-property-related businesses.
The 50-year-old dyslexic, who has been featured on a popular TV show in the UK, was homeless in 1984.
Kevin later managed to increase his income from £5 per hour as a farmer to £1,000 per hour as a social entrepreneur. He is now focused on educating, inspiring and motivating people about starting a business, investing and gaining control of their financial future.
I have had the pleasure of talking with Kevin and watching some of his workshops, and I want to share with you 7 wise and impactful lessons learned from him about wealth creation and business.
Before starting anything, know your passions.
A man attended one of Kevin’s workshops to learn about property investing, although he was already working in a job he was passionate about, just because property investing is a more lucrative business.
Kevin, detecting the amazing passion and knowledge that the man showed about his occupation (aviation equipment), told him that it is fundamental to base your business on what you are passionate about instead of starting a business just because it’s working for another person. (For instance, Kevin is really passionate about property investment, but that may not be the case for everybody.)
After the workshop, the man decided to follow his passion and create a business selling exclusive aviation pieces to aircraft companies, and he’s now doing really well.
Don’t forget that there is good money in a massive number of niches, and if you apply the proper principles, you can build a successful business based on whatever you really want to do with your life.
Put your money to work for you
Instead of the other way around.
Another wise lesson I have learned from Kevin’s life is that you have to build your assets with the goal of getting them to produce passive income.
He started as a farmer and had to work really hard to increase the number of cows he had. At that time, he was increasing his assets but he was unable to make them produce enough income by themselves to sustain his life.
He realized he had to make a change in the kind of assets he was building if he wanted to escape a life of unending working hours and underpaid physical labor. He studied real estate and property investment, until he was able to put that knowledge into practice and increase his passive cash flow to a point that gave him complete financial freedom.
You don’t need to be a property investor to benefit from this rule, it can be applied to any kind of business. You work hard to build your team, brand, websites, resources, products, content, reputation, and so on, until you reach a point when it all starts paying off and profits start coming in with less effort on your part.
Don’t ever be frightened to sell a very successful business
When your business is growing rapidly and making record profits, you shouldn’t be afraid to consider the possibility of offering it to potential buyers, because that’s the moment when you are going to get the most money for it.
If there is a big order book, and it has been in place for at least two years, what you can make can go from 5 to 10 times the annual net worth.
For instance, if you have grown your business to make $100,000 in profits annually, by year three you can expect to sell it for $500,000. If you had a really big order book and a future order book coming in, and you could prove that potential to buyers, the price could go up to $1 million.
You may set-up some companies, as happens with buying properties, with the goal in mind of selling them and making a good cash-in.
Kevin applies the 70/30 rule to property investments. He buys 70% of his properties to keep as an investment, and the other 30% with the intention to sell them for a profit. He wisely defines an investment as something that is actually producing income.
Don’t put all your eggs on the same basket
Always build wealth in at least two or three different asset classes just in case; if a disaster happens to one, you will still have the others.
It isn’t the safest thing to put all your investments or profits in the same pot. That only creates stress in your life and makes you feel that your financial security is controlled by external factors.
It’s much wiser to think about a secure diversification plan you can implement that’s easy for you to understand, so you avoid leaving your hard-earned money in a place where you can’t recover it later.
Don’t give money to charity until your own home click here is solidly established.
Kevin advises that you not start giving your profits to charity until your financial situation is completely secure.
After you have reached a point where it is solidly established and your income streams are producing enough profits, then is the time to think about the best way you can use part of your money for helping others.
It is really dangerous to start giving away money or overspending once you start making decent profits, instead of reinvesting them in securing and improving your financial life or business with a long-term vision.
Become a bank
Kevin Green recognizes that he loves to be the middleman, and he has strong reasons for that, since he has reached a position where he can virtually act as a banking institution.
You don’t need to go that far to apply the same principle. Being the middleman in any kind of business, you can set your own rules and make a profit from products or services that you don’t have to develop or sell. You are also instantly cutting out the middleman by becoming one yourself!
If you are in a position where you can decide between looking for a middleman to help you carry out your business, or becoming one, it is preferable to take control of the situation at once by doing the latter, so your business never depends on third parties to succeed.
Don’t ever lose control of your business
Monitor everything and you will be able to detect if something bad is coming, and have enough time to react to it.
Keep track of all the systems, procedures and figures constantly.
You have to keep your eye in the ball, especially when you are still in the process of growing a business and there are a fair number of factors left to be solidly defined and established.
Don’t let your business be run by chance. Your business is an important part of your life and your financial situation, so it must be handled with the maximum care.
You won’t be able to do everything in your business, but what you can and must do is set up the right systems from the start so you can bring the people you need in to help you run it, and you can continue doing so no matter how much it grows.
Remember, you either run your business or end up being run by it.