We usually do not bother with answering questions we don’t know. In a rare exception we’ll go ahead and try because we receive the question at least 5-10 times every Q&A and are forced to delete them. As a point of emphasis all of this is opinion as we have never been forced to hit the hard reset button (early 30s with no money and low income). But. We’ll go ahead and outline our own strategy assuming we had nothing.
Make a Decision: After teaching your early 30s with nothing to your name, you have to make a decision. Do you actually want to be rich or do you want to live a simple life. This is not something we would be able to answer. A lot of people ask questions that we can’t answer as they are personal choices and this is one of them. If you’re in this position you have to decide “do I want to try against worse odds or do I want to go low risk?”.
People will read that paragraph, go watch a motivational YouTube video and say “I want to be rich I can do it too!” If that’s how the decision was made (through emotion) we’d recommend going the safe route and giving up on being rich. Anyone who is in their 30s and still has a role model/person they need for motivation will practically never make it. Now if someone simply read the paragraph and concluded that a stable life isn’t worth living then they are the ones who should actually try (a stone faced, emotionless response to trying to make it).
If you’ve decided that a stable life is good enough, then our answer is simple: government work or healthcare services. Both of these offer a lot of stability with no real inflection to get rich. Oddly, when we recommend these types of positions the response is “won’t I be giving up” and the answer is yes you are (in terms of getting rich). And. That was the point. If you’ve decided the suffering that it takes to get rich isn’t worth it then… you don’t get rich but your stress levels go down to zero: money for food, shelter, all other bills, healthcare and maybe a vacation here and there. Blogs like this are no longer relevant and you move on from the money chasing game. (Note: we do realize it is possible to work a government job and start an online business. However, we haven’t seen a success story with that strategy if the person starts that late… usually ends up being 1-2 good years followed by a crash in sales/income. We’ll cover it in this post anyway.)
Decided to Try and Get Rich: If you decide to go ahead and try, you’re going to go through many years (not months) of suffering. Simplistically, you should delete everything: social media, your tv subscriptions, your common friends, all your nights out, your current girlfriend etc. Sounds extreme? Great. That is your only chance to make it out of the situation. Successful people in their 30s are already rich and still pushing hard. Maybe not 80 hours a week, but many still push between 50-60 hours.
#1 Option Real Estate: Given no information, we would go into real estate. This is by far the most common way to accumulate wealth. Again. If someone does not beleive this, they can always call a wealth management company who will confirm this as common knowledge: small business owner and real estate are the most common ways to get rich. Our new age ways to get rich were set for people in their 20s (read efficiency, triangle investing etc). When you’ve got nothing you go down the highest probability path which is real estate.
Why real estate? You can also earn a decent income by learning a skill associated with real estate. We don’t care which one it is as all of them pay similar amounts of money: plumber, electrician and anything related to home construction. After learning the specific skill you’ll live and breathe the real estate game for the next 3-5 years. During this period you’ll live on next to $0 in income and simply pay for food, coffee, water and the cheapest housing you can get.
Save to Get a Fixer: In an ideal situation, you’re living in an area outside of a major metropolis (San Francisco, Los Angeles and New York would not be easy, places like Cleveland or Nashville would be a lot easier for example). This is also a hint that you may have to move to make all this work (we explained it would not be fun or easy already). Also, no, we do not know the exact markets to go into. Looking at cap rates and average selling prices would give a quick view of how hard it would be to save for your first purchase.
Back to the point. After living extremely below your means with no real fun (no one deserves to have fun if they are trying to get rich and have nothing as a starting point), you buy a fixer for you to live in. Guess what? You get to fix the whole thing by working every waking hour you can while you’re not on the job. The trick here? You’re able to do a large amount of the work yourself. It will take a year or more to save money and during that time you should have an ability to spot fixable vs. unfixable situations. We have no idea how this process works as we don’t do this (we only buy lower risk projects as explained in triangle investing), but, it will always be around. No matter what happens in the future, people need a place to live and many houses need to be fixed.
Scale: At this point you begin to scale up. There are several models: 1) rentals, 2) fix and sell, 3) apartment complexes, 4) going after more dangerous assets like short sales and homes with structural issues – we consider this separate from “fixer uppers” and 5) starting a completely different real estate company focused on selling homes. There are a lot of options here and we have no idea where you’ll sit. That said, the scale is here in various forms.
#2 Option – Looks Industry: We’ve already described this in a prior post and will be brief. There is a market for helping people get in shape, fixing their diet etc. The reason we’re not going to talk much about this? It requires far too much time, is too volatile and unlikely works if you’re starting in your 30s. What will happen is you’ll receive a few “good years” with low 6-figures followed by the inevitable decline to mid-5 figures and may not recover. Market gets saturated and there is no recurring income unless you own an actual gym for example.
The reason for the decline is 1) downturns absolutely dismantle the services industry, 2) there is limited “stickiness” with the product/market and 3) since the majority of people don’t actually stay in shape they are always jumping from band wagon to band wagon looking to fix their situstion with a magical solution that doesn’t exist.
The only reason we leave this here is that it is quite easy. Also, some people consider $1M in net worth at age 45 rich (if this is your definition of rich, the plan we outlined will work). We don’t consider this rich so we wouldn’t bother with it, but that’s an opinion. The math will show a path to $1M or so assuming mediocre results.
#3 Option – Internet Attempt: This is a more complicated attempt at our original strategy in efficiency. In efficiency we outline everything however, we assume you’re in a good career as well (people think it’s not possible to do both well concurrently, and these are the ones that don’t make it or don’t have any experience – politics can help you a ton). In this situation you’re going to try to go down the internet route while working a government job.
This is where the big warning sign goes up. From what we have seen, individuals who cannot break into competitive fields are unable to do well on the internet. Why? Well… the internet is no longer “easy pickings”. Everyone wants location independent income and anyone is allowed to compete online. We’re not backing down from our original plan in efficiency as it is pretty much an evergreen product for people with talent. Starting late means you’re well behind the 8-ball and gave intensely competitive (and talented) people a 10-year head start.
Assuming you would like to go down this route, then you’re going to have to do the same steps in efficiency. The trick is that you also have to find an extremely easy government job with a functioning internet connection. We do not know which positions are the easiest but we’d do research in your area to find the ones with the most bureaucracy and limited oversight.
One of the funniest things we see consistently on twitter is how easy it is to make money online. Anyone who actually makes money online knows it’s cut throat and disheartening for many months/years (depending on your skills/effort level). People with no experience only see the results and say “Hey I am smarter than him I can do it too” not realizing that they didn’t see the prior effort and may not actually be smarter.
Option #4 – Local Business: It is our opinion that this one should be number two for someone starting “late in the game”. We put fitness and online sales above it because no matter what we do we’d get questions such as “oh my does this mean you’re changing your position” since most cannot understand that views change based on circumstances. Anyway. Beyond that digression, if we were playing catch up we would either go into real estate or go into brick and mortar focused on the heirarchy of needs. A fancy way of saying, anything high margin related to food/drinks/homes etc. While we’re mentioning homes twice, this could be a plumbing company instead of using plumbing skills to fix homes. Or a private electrician business instead of using those skills to fix homes etc.
The point is simple, we’d actually go into location specific brick and mortar competition in a city you want to live. Why? Well competition is local and you won’t be fighting against brilliant people who decided to compete online. Online competition is reserved for people with niche knowledge and a person with no opprtunities in their early 30s probably doesn’t have niche knowledge.
Stay or Leave: No matter what you’re doing right now for money, you should take a pause and decide if you know your city well. This is where self-awareness becomes paramount. Ask if you truly understand the ins and outs of the local economy and begin looking for low risk higher quality cash flow businesses in the area. Clean examples are typically pizza establishments and dive bars. Generally, low end bars and pizza establishments have high margins and don’t look “sexy”. Many of the upper-middle range places have worse margins and are subject to fast closures as well.
If you decide to leave (and are able to), you want to focus on cities with notable population growth. You have to make a decision. Where are people going to move? An expanding market is a lot easier than a shrinking market when it comes to making money. A good example is Austin, Texas (we’re sure there are millions more) as many Californians move out to the more liberal city in Texas. This isn’t a political comment about Austin being a great city, it is a money making comment as you should be willing to live anywhere (even if you hate it) if serious about getting rich. After all of this work and research you should be ready to make an informed decision.
Two Jobs: Instead of making it complicated, you need to work at least 12-14 hours a day. This is a realistic number if you are trying to save a large amount of money quickly. Either learn a trade and find a night shift or… find a night time position (typically hospitals/health care) and find something else during the day. Other than working you should only have a bed with a place to sleep and that’s really it. You’re not going to have fun anyway, so no need to spend up for an expensive apartment. (Side note, the internet has been around for about two decades and there are still people who think they can “work smarter” than people who are more successful than them and catch up… completely illogical but that is how the average person still thinks)
This is a bit different from the housing example as you’re trying to maximize cash flow until you can buy one of the location specific businesses.
Before moving on here, a key reason why we think this is more viable than the other two options? You’ll be happier with your social life. Any time you buy something integrated with a community you’re forced to become part of the locals. This is more of a psychological item and it does matter. When you’re in the internet game, if you’re not doing well, your only interactions are between you and a computer screen.
Option #5 – High Risk Professions: To be clear, we would not do this. This is simply a Hail Mary for someone who does not want to do any of the above. High risk professions are things like underwater welding and other manual tasks where your life is quite literally at stake.
While people get a lot of entertainment out of things like the World Wide Wrestling federation, we always cringe inside when we think about the bodily damage they are taking. We find (after they retire) that people in positions with high physical stress (nfl, nhl, professional wrestling) suffer from serious long term injuries and potential brain damage. While this isn’t related to high risk positions (stunt person etc), it’s something to think about. Health is worth way more than money ever will be (something we’ve said numerous times to the surprise of readers) and we wouldn’t go down this route.
All that aside, if you’re an adrenaline junkie that could be a way to make it as pay can be quite substantial relative to the time frame. Offset of course by significant stress.
Don’t Care About Wealth: Once someone officially gives up on being rich they usually say “rich people are mean, unhappy, unhealthy” one of those three. They also say “it wasn’t worth the trade off, I’d never go through that for a million dollars!” The reality is that they likely gave a mediocre effort, didn’t make it and now need to say something to protect their egos.
Assuming that you’ve decided to give up on being rich we’d go ahead and take a low risk job in health care/government and move to an area with great weather. San Diego, Hawaii, Los Angeles and Miami most of the time are all good ideas (no tax issues in California if not making large amounts). Are you ever going to compete against the top there? No chance… you’ll be taking it easy and hanging out in a different crowd.
Oddly, we don’t think there is anything wrong with this, it just doesn’t fit with our personalities. We wouldn’t surround ourselves with people who want to live this life as the “vibe” or “energy” is always off. It does not feel good to hang out with people in this type of situation. Does it make them “bad”? No it doesn’t. It’s a different life choice. The idea of living in-between with a “balanced life” is dying rapidly as explained in a prior post and we’re all better off making a decision “make it by getting rich or live a comfortable basic life”
Concluding Remarks: We gave five different ideas but would probably only choose between two in 95% of situations where someone is far behind. As a point of emphasis this is all opinion based as we haven’t been in that situation. One thing we would end with is more of a warning. Believing that someone can suddenly learn internet sales when starting late (say mid-30s) is brutal unless you were already a gifted person. This is something that should be considered. If you were already a top lawyer/banker/engineer and decide to do this (somehow didn’t save money) then we’d say you have a good shot. If you were always middle of the pack, it’s going to be brutal, hence our view of going into real estate where the math is easier and time frames benefit you.
Some side notes somewhat related to this. One thing we’ve noticed is that people get upset that we don’t work “80 hours a week” anymore. This doesn’t make much sense as you shouldn’t be working 60-80 hours a week if you made it in life. You’d be *willing* to do it, but the chances that it is needed consistently is next to zero. Again. Willing to do it, but the opportunity must be there.
Another side note is that we’re seeing niche online sites become saturated (we have an idea to make money off this but will keep that to ourselves as we’ll probably do it next year). Niche online sites are seeing flattish trends and you don’t want to see the revenue numbers when the economy goes south, combine that with higher expense lines for the guys who thought the punch bowl party would continue… You know the rest
As a last note, a common complaint is that we don’t give rah rah positive feedback to people who are playing catch up. Why? It’s simply not a high probability chance that they make it. Sounds mean but it’s true. Instead we focus on young people 20s to maybe low 30s… since they have the energy to go through the pain and suffering. If we told everyone “don’t worry you can still make it when you’re 40 and have nothing!” what do you think the younger people would do? They would slack and ruin their futures/lives. So which one is the better message to send? We don’t sell dreams, we sell calculated risk adjusted decisions to maximize the one shot we have at this silly game called life.