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Today we will talk about how to make money for the next ten years. There are many signs that we are in a recession and not heading for a recession. I know, you’re thinking the stock market is doing well and unemployment is low. That’s misleading.
I’m in the process of looking for warehouse space for a client. I noticed there is an abundance of warehouse space. I’m going to give you a little context. In 2002, I rented a warehouse and it was about 3600 square feet. It was $1000 a month.
Fast forward fifteen years into the future. I found a better warehouse that is cheaper and was recently built out and remodeled. Here is another thing that happens. You won’t hear a lot of people talk about this if they haven’t had this type of business. I had to have a warehouse in 2002 because I was bringing in large 50-foot containers of furniture from China.
We were able to move into a larger space because a big corporation had closed out their lease and left early. So, I went over and talked to my landlord and was able to get in. I saw a lot of big companies getting rid of their warehouse space and breaking leases. That is usually a big sign that bad times are coming. Wealth is what you make based on output. When companies are constricting, that’s a sign the wealth isn’t there. I see it everywhere, since I’ve been looking at a lot of warehouse space.
Another thing to remember is that with this meltdown, there is opportunity. There is a lot of opportunity, if you’re positioned and you’re capitalized well. You used to be able to get a lot of business credit off your EIN number without them checking your personal credit scores, but that game has changed. A lot of that stuff is going to go off your personal credit scores even though it doesn’t show up on your personal credit file.
If you want to get into this deeper, join Hustle Camp. We will discuss wealth building through entrepreneurship. I think it is the fastest way to get wealthy. It is the fastest way to leave something to your kids. It is the fastest way for you to get out of the hell hole you call your life.
Let’s get into the first thing you need to do. I’m talking about debt. You’ve got to work on getting out of debt. You have to raise your income, so when you pay more than the minimum payments, you still have money to put in the bank as “attitude money.” It’s going to be very important to have access to cash.
When things constrict, your dollar is going to go so much farther. I’m seeing this with this warehouse space. This warehouse space should cost about $3K a month, but it’s a third of that. That is telling me that when this recession hits, the people who are making it rain with their businesses are going to be in a position to leverage that dollar times five or times 10 and in some cases times 100.
The thing that is so disheartening for many people is they are trying to get out of this cycle of going to work and paying bills, get a little money and have a little fun. You’ve got to start taking steps now. We’re already in a recession. These things can go on for a long time. This is going to be like what happened in Japan. It’s going to be like the lost decade.
There are going to be many people who are caught short because so many people are living on credit. They’re not living on cash flow. They’re not living on earnings. They’re living on credit. They’re leveraging themselves so that if anything happens, they’re in trouble. The whole house of cards comes tumbling down.
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Question: Are big limits still available on business credit cards?
Answer: Yes. Let me tell you how the banks are doing that. The banks that are going to offer you the best bang for the buck is the ones you have an account with. The branch manager is going to be monitoring your account. They’re looking at your income instead of your credit score to determine the credit amount they will give you.
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Question: What happened in Japan?
Answer: Japan had this ten-year period of economic nothing. They had no growth, no appreciation, no increase in wages. It hit the whole country. It’s going to be worse here.
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The second thing you have to do is raise your income. If you’ve got a job, keep your job. You need to start a hustle that is going to put $2K to $3K a month in your pocket in addition to your job income. You need to do that now.
Once you get $10K to $20K from your side hustle, then you start yourself a business. You need to have high income and low expenses. You want to be able to live on 30% of your income. If you’re crushing it, you should be able to live on 10% of your income. That’s where you want to be.
Everyone is going to be constricting. There will be massive layoffs as the holidays come around and companies try to make their balance sheets look good for Q4 and Q1. That’s going to create opportunity. That’s going to create cheap employees. That’s going to create cheap inventory. That’s going to create cheap warehousing, office space and retail space.
So, if you’re living on 10% of your income, with 90% going into an account, opportunities are going to be there for you. I’m going to tell you something that happened to me in the storage auction business years ago. I had plenty of cash. I was on Craigslist and noticed there was this office that was closing. They had nice furniture. He had Ecospace which is a high-end brand of Herman Miller. The dude was in the position where he couldn’t give it away because he owed money. He told me he needed to sell it all.
I asked him if he would take $15K for everything including me moving it all. He said if you give me $15K, it is all yours. It was two floors of furniture. I sold it to a guy for $50K. Because I had the money, I was able to make this deal.
You’ve got to be positioned to win. While this was going on, I was still out there buying units. I was still out there doing my regular thing. This was a one-time thing. I took the money and reinvested it in the business and kept working.
You have to develop financial discipline. You must do this. What’s going to happen is those people who can’t be patient and wait for delayed gratification are going to be eaten alive by those who are prepared. There are going to be deals all over the place. People will be selling cars to feed their kids. It’s coming.
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