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  • Writer's pictureMitch A. Nelson

Real Estate Investing - You Can Do It Too!

Everything you were taught in Elementary School, Middle School, High School and even College was designed to make you AVERAGE! No one ever learned how to become wealthy from public education. Stay with me for the next few minutes as I break down a few simple changes you can make in your mindset that will make ALL THE DIFFERENCE!

Henry Ford’s Mindset Transformation Story

I want to start with a story. This is a story about a young farm mechanic who loved building cars from the ground up. He would find scrap metal and weld a frame together, and hand bend the sheet metal to make the body and do the upholstery himself and build the engine himself. And these cars turned out beautiful. He would drive them around town, and people would see them, and they would want to buy them. So quickly, he got the idea. “Well, I should just start a business… I mean, how hard is it to break into the auto industry, right?” So that's what he did. He started a business building cars, and just started selling locally, and orders started coming in.

His business model was, he would take down payments from several orders, and he put the money into a single car. He did all the work on the car so that they would turn out beautiful and he could control the quality. This worked for a while and he made a lot of money doing it.

Before long, he became really popular. But after a while, he got so backlogged with orders that people started asking for refunds on their down payments. The problem was, he was using the down payments to finance the order he was working on, so he didn’t have the money to give back. This cascaded out of control, and eventually it killed his business. He went out of business because he was too popular. How bad would that suck?

So, defeated, he went back to what he knew. He went back to being a mechanic and working on the farm just so he could pay off some of his debts.

Now, a few years went by. He was a middle aged man by now. And he had some new designs and new ideas for building cars. He had never really lost his passion for it, so, he tried it again. He started a new business using his new designs. But the problem was he used the same business model he had used before. What happens when you do the same thing over and over again? What type of results can you expect? Same results.

That's exactly what happened to this man. He failed a second time. This time, licking his wounds, he said to himself, “You know what, I guess I just don't have what it takes to be an entrepreneur, I just don't have the gene or the bone or whatever it is to do this business running stuff.” And he just kind of gave up, and resigned himself to working a job for the rest of his life.

One day he was at the State Fair, and he was wandering around the fair and looking at the different attractions and wandering into the different tents to see what was for sale, and accidentally wandered into the backside of the butcher's tent. Now the front of the butcher’s tent, you have the nice cuts of meat for sale. But the back of a butcher's tent is a different story. He saw a bunch of men dressed up in white lab coats with aprons lined up at a long steel table. And on one end of the steel table, there were some animal carcasses. The first guy would pull an animal carcass up onto the table, make some cuts, and push it down the next guy. He would make some more cuts, and so on, all the way to the last guy, who would pull off a sheet of butcher paper off of a roll and he would wrap up a cut of meat and push it to the front for sale.

Now, the man marveled at this, because he knew it would take a single butcher a full day to carve up an animal but this group of guys was doing it in a fraction of the time. The wheels started turning in his head, and he started thinking, “Wait a second! What if we ran this backwards? What if we had some car parts laid out along the table, and the first guy put some car parts together and pushed it down to the next guy and he put some more car parts on it… And by the end of the line, we have a full car!”

Now, who am I talking about here? Any guesses??

Henry Ford! You nailed it.

Based on that idea, Henry Ford started a third company, he called that company, Ford Motor Company. It's been around for 120 years, and it's one of the most successful auto manufacturers in history. Now, the reason I start with that story is because what happened to Henry Ford that day is something very similar to what happened to me about ten years ago, we changed our mindset.

My Mindset Transformation Story

I was 27 years old. And I was working a sales job in my home town of Salt Lake City. I was making about 40 grand a year, living in a two bedroom apartment. I was the average American! And I should have been happy. But it wasn't.

The reason I wasn't happy was because earlier on in my life, when I was 20, 21, I set a goal for myself that when I'm 30 I want to be a millionaire. AND, by the time I'm 35 I want to make a million dollars in a calendar year. Here I was 27 years old, much closer chronologically to the goal than I was financially, and I didn’t know where to turn or what to do to change it.

So, I got kind of nervous. I started looking around my industry. I looked at the top sales guy in my industry. He was making $150,000. That's good money, right? But the problem was, if that's where I set my ceiling, I would never hit my goal. So, I thought, well, maybe it's not in sales, maybe it's in management, I looked at my manager who was making $250,000 a year. Great! I don't care what industry you're in. That's good money. Especially in 2012/2013! But if that's where I set my ceiling, I still would never hit my goal. So, I decided to look at people who had actually done it.

I bought every book I could find, watched every biography TED Talk that I could find on wealthy individuals. I wanted to get inside of their heads. I wanted to know what time they woke up in the morning, what they ate for breakfast, and what their average day looked like. I wanted to copy every step of what they did, figuring that if I copied them exactly, I could get the same results!

I bought like seven composition notebooks with lined paper, and I just filled those things full of notes of what ended up being both useful and useless information. I ran out of room, so I started writing on napkins, and the back of like credit card statements. It was a mess! I had so many notes that I had to organize them, so I went back through and eliminated the useless stuff - like what Steve Jobs ate for breakfast, and organized them into a 150 page typed paper. And then my paper eventually became a book, and I published my book in 2015. It's called “Mindset to Millionaire”, and it's actually a 4 times number one best seller on Amazon.

Secret #1 - Currencies

Now, the reason I bring up the book is because I learned an important thing. For the most part, the successful and wealthy people of our day are pretty much just like us. They eat, they go to the bathroom, they have 24 hours in a day. They need 8 hours of sleep. Sometimes they’re happy, sometimes they’re sad. There was really only one thing that set them apart from the average person. It was their mindset. It was the way they think.

There is a dichotomy I set up in the book, between what I call the employee mindset, and the wealthy mindset. And, the first thing I discovered was that the employee mindset individual thinks in two currencies, those currencies are money in time. And you know what… the employee mindset individual values money way more than they value time. This is evident because of the way most people make money nowadays. They have time, they need money, so they sell their time for money.

Now, I want you to try and experiment. Let’s say you make $20 an hour at your job. Go into your boss’ office, pull a 20 out of your pocket and slap it on his or her desk, and say “I want to buy one of my hours back.” They might think you’re joking and start to giggle. “Okay, I see what this is. Here's another 20. That's 40 bucks. That's double what you paid me for it. I just want one hour back.” Now they’re going to look at you like you're kind of crazy, right? “Okay, fine. Here's $200! That's 10 times what you paid me for it! I just want one of them back!” What can you do? Even if they wanted to, there's nothing they can do. Nobody on this planet can just TACK an hour onto the end of your life. You see, time is the only non-renewable resource we have. In fact, it's the most precious and scarce currency we have. And yet we were all taught to trade it for the most abundant currency in the world… money.

You, and everyone else watching this video from around the world are individually unique. If I asked you how much money you made last year, every viewer would have a different answer. Everyone of us has a different background, different religious beliefs, different upbringings, different levels of education, and we all provide a different value. But you know, if I asked you how many hours you had in a day, it would be the same for every single one of us. Even the wealthiest and most powerful people only have 24 hours in a day.

Because of this, the wealthy think in five currencies. And those currencies have a very particular order to them. The most important is time, then comes knowledge, relationships, credit and money. You'll notice that money's last, it's the wealthy - business owners that create and own all the jobs. And they're just shoveling the money over to the employee mindset saying “You guys take the money! We want the time!” Maybe there's something to that. Now, I also noticed that as you get those five currencies in that particular order in your life, you'll have an abundance of ALL of them.

Secret #2 - Savings

Another thing I learned from my study of the wealthy, was that the wealthy and the employee mindsets have different ideas about how to save for emergencies, and about how to save for retirement. You see, the employee mindset individual was taught about and uses what I call an “accumulation strategy”. They build nests. And every month, they'll go to work so they can put an egg in the nest. Over years and decades, they build a pretty tall stack of eggs in the nest. Then you hit 65 years old, you've got a lot of eggs in that nest, you're feeling pretty good... and now it's time to retire. So, in retirement, you start taking eggs out of the nest, and you'll crack one open and use it, and the next month you take another egg... You hit 75 years old. The nest is still looking pretty good. It’s shrunk a little bit, but you’re still good… You hit 85 and the nest has dwindled quite a bit, but you’ll probably be fine. And then you reach about 90, and what happens? Yeah, you look at the nest and you start thinking “Holy Crap! Well, hopefully I die before I run out of money!”

“Hopefully I die before I run out of money” is a terrible retirement strategy. But that’s what they teach us in school: Go to school, get good grades so you can get into a good college, get a degree so you can get a JOB… and save for retirement. The problem with any Accumulation Strategy is that it’s finite. You only have what you have and usually it’s not being replenished.

In contrast, the wealthy just buy FREAKING chickens, because chickens lay eggs every month! Whether you're sick, or if you decide to go on an extended vacation… You could be dead and the chicken will still lay an egg, because it has nothing to do with you!

Now, of course, I'm not talking about chickens, what am I talking about? Assets! Cash flowing assets! Rental properties are a great example of that. A well-managed rental will pay you even if you're sick for more than two weeks out of the year. A well-managed rental will pay you even if you decide to go on a six month vacation. A well-managed rental property will pay you even if you're dead! It's a legacy you can pass on to your children and their children, and, as long as it’s managed well, it will never run out with time. You can retire as early as you want, and it will keep going.

Secret #3 - Making Money

We already talked about why trading your time for money is not a smart way to make money because it’s not an equal value exchange. In my study that led to the writing of Mindset to Millionaire, I found another amazing consistency among the successful people I studied: the wealthy are business owners and real estate investors. And when I first discovered this, I thought, well, sure that's the case, because those activities make a lot of money, right? Well, that's true. But what I found was there's layers to it. One of those layers is taxes. We've all heard that the wealthy pay less in taxes, yes? Did you know that MOST of them do it legally? It's because they understand the tax law. You see that second currency, knowledge, that's an important thing to the wealthy. They have this funny attitude of: “If I'm going to pay into a system, I’m going to understand it!” And what happens when they start to understand it is they find that being a business owner and a real estate investor carry with it more deductions than any other activity. There's nothing else you can do that has more tax deductions to it than being a business owner and real estate investor. The reason for this is the difference between being a creator and a consumer. It’s simple: if you’re creating jobs and housing for people, the government doesn’t have to. So the government provides an incentive to do these things in the form of a tax deduction.

The employee mindset individual was taught all their life to be consumers. To buy liabilities instead of assets. To be scared of finances. They don’t understand it. They don’t want to ask questions about it. And most of them (with the exception of maybe accountants) don’t study the tax law to gain understanding. They trade most of their time for money at a JOB, where they are required to file taxes as a W2. W2 is the most expensive way to pay your taxes! There's not another more expensive way to pay your taxes than the W2 form. The reason being it has the fewest deduction categories. It's also the only way whereby the government gets paid first - you know: that withholdings thing that they do… That's the government getting their money first before you get your check.


Of course, I’m not your attorney or your accountant, so I can’t give you legal or tax advice. These are just some of the things that I’ve picked up along the way and have found success with. There are always risks in any of these strategies, so make sure you’re educated before you go out and try any of them on your own!

A great place to start is our weekly live education webinar! Get access to our nation-wide community of real estate investors! We meet on Zoom every Wednesday at 7pm Mountain Time for exclusive trainings, real deal walkthroughs, question and answer, guest speakers and all around real estate investor shenanigans. Beginners, experts and everyone in between is invited. Just go to Wednesday at 7pm MST. There is no better place to start getting your investor legs! Best of all - we made it FREE just for you! Can’t wait to talk with you live!

I’m curious what you thought of this article. If you have any thoughts you’d like to share or if you would have done things differently, please reach out! I’d love to hear from you! We’ll be bringing you some more amazing content very soon! See you on the flip side!

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