Is there a way to protect yourself from being laid off? Absolutely! Discover a safety net that not only protects you from financial hardship but also sets you up for long-term success.
Downloadable PDF to Track Your progress:
How To Protect Yourself from Being Laid Off Action Plan
Facing the Reality of Layoffs
Layoffs are a common source of anxiety, especially for those in their forties, fifties, or sixties. The fear of being replaced by someone younger and cheaper can be overwhelming. In the tech industry of Northern California, the number of job losses is alarming, with over 130,000 layoffs since last August and a total of 240,000 in the sector within a year. Whether you’re in senior management, a high-paid individual, or a tech worker in Northern California, the threat of being laid off is real! But what if you could set up a safety net that not only shields you from financial hardship but also sets you up for long-term success? One that relieves you of the burden of relying solely on your job for survival by generating passive income and can replace traditional long-term retirement planning. What is this safety net? Income producing commercial real estate.
2 Common Sense Moves to Protect Yourself
Given the potential risk of being laid off, it’s crucial to take proactive steps to protect yourself. But before diving into our detailed action plan, let’s start with two essential moves you can make right now to safeguard against layoffs:
Create a Backup Plan
Consider this your contingency plan should you get laid off. My engineering career taught me the unpredictability of job security. In fact, it was my boss’s layoff that propelled me into commercial real estate investing. I figure if they can do that to him, they could do that to me! So, the first move is to assess your situation and start making a back up plan, much like I did when I shifted from engineering to investing full-time.
Build an Emergency Fund
Having an emergency fund is a fundamental yet often neglected aspect of financial planning. When students tell me they want to quit their jobs and pursue investing full-time, I always ask, “Do you have an emergency fund?” Having a reserve of funds to cover expenses in tough times is essential. It could be in the form of cash, a Home Equity Line of Credit (HELOC), or retirement savings. The important thing is to have a financial buffer that provides you breathing room while you transition or in case you are laid off. Remember, this is an emergency fund, so don’t touch it until it’s absolutely needed!
6 Step Action Plan
Let’s dive into our six-step action plan. This is a clear, concise, and compelling plan of action to provide you with a safety net, and it’s the same formula I used to protect myself and my family. This plan takes time and focused effort, but has produced life changing results in my life and the lives of our students.
Step #1: Financial Self-Assessment
Begin with a thorough financial assessment to determine your absolute minimum monthly expenses in dollars. This includes mortgage or rent, insurance, taxes, phone bills, and other essential costs. Only include your essential expenses in your calculations, leaving out non-essentials like vacations, lattes, and dining out. Starting here is key because this figure will be the cornerstone for your financial goal-setting. From there, you can outline the necessary actions to reach that target.
What’s your number? What’s the least you need to get by? When I began, it was just my son and me. I had a mortgage, his schooling, groceries, and other bills to pay. My layoff protection number was $4,220 per month at that time. I wrote my number down and then followed this six-step action plan to create a safety net for myself and my family. So, write down your number; it will be pivotal in setting and meeting your financial goals. Remember, 45% of individuals who write down their goals are more likely to achieve them, while for the remaining 55%, it remains a dream.
Step #2: Education and Skill Development
Learning a new game means acquiring new skills, and this is particularly true for the game of income-producing real estate. My wife and I recently took up pickleball. It’s a great sport, but more challenging than I expected because it requires new skills. There are players who, despite being older or less fit, are better at pickleball than me because they have the knowledge and skills that I’m still learning. The same principle applies to investing in income-producing real estate.
The next step is to start educating yourself through resources like books, online courses, and instructional videos. Commercial Property Advisors offers a wealth of free educational content to help you master real estate investing:
- To get started, read my complimentary book, available for download here: Commercial Real Estate for Beginners
- Further your education by enrolling in our free online real estate investment course: Commercial Real Estate for Beginners Course
- Our YouTube channel is a treasure trove of information, offering videos on all facets of commercial real estate.
- Text PETER to 833-942-4516 with any questions about getting started in commercial real estate.
These resources will equip you with the foundational knowledge and skills you need to enter the game of income producing real estate and build your safety net.
Step #3: Build Your Support Team
Real estate investing is a team sport, which means you need to start building a team. Your support team should include a local property manager, lender, real estate agent, and contractor. But most importantly, you need to leveraging someone else’s experience to accelerate your success, which is why having a mentor on your team is so important. When I got started in commercial real estate over twenty years ago, I was already in my late thirties or early forties. I didn’t have a lot of time, and I couldn’t afford to make mistakes. Once I finished step one and step two, I needed help to get to step four: buying income producing properties. It was then that I decided to hire the sharpest commercial real estate mentor I could find. In retrospect, that was one of the best decisions I’ve ever made!
Step #4: Put Theory into Action
Having completed the initial three steps, it’s now time to shift from theory to practical application by investing in income producing real estate. This is the moment for action and tangible results! The goal here is to create a steady cash flow that helps you achieve your financial goals and reduce your vulnerability to layoffs. Remember the financial self-assessment in Step #1? With the purchase of your first property, you begin to fulfill that goal. For instance, if your essential monthly income is $6,000 and your new property generates $1,000 monthly, you can now revise your target to $5,000. This is the strategy I used until my required income was fully covered by my investments, providing me with a safety net and allowing me to leave my job. It’s a gradual process. Rome wasn’t built in a day, but with time, you’ll be amazed at what you can build.
- Starting local is best.
- Beginning with smaller investments is perfectly okay.
- Your best deals will always be off-market.
- Can you do this without having a lot of cash? Sure! You must learn 3 things: Creative financing, wholesaling, and raising private money.
Still think commercial real estate is out of reach? Watch my video Can You Afford to Buy Your First Commercial Property? where I explain that all you need is a shift in your perspective to acquire income producing commercial real estate.
Step #5: Achieve Invincibility from Layoffs
The fifth step is developing a mindset of invincibility against layoffs. As you progress through the action plan, you’ll start to feel empowered. With each step you take, you’ll become less vulnerable to layoffs and more in control of your financial security. With your back-up plan already in motion, this sense of empowerment will drive you to keep moving forward. I became successful because took action, closed my first deal and never looked back.
Step #6: Transition to Full-Time Real Estate Investing
The ultimate goal of our action plan is to become a full-time real estate investor. This transition occurs naturally as you build your portfolio and increase your cash flow. Eventually, your job will start to interfere with your real estate business, and you will need to make a decision: Do you continue in your career, or launch into commercial real estate full-time? Many of our students have completed steps one through five and chosen full-time commercial real estate investing because of it offers tremendous benefits.
Unlimited Tax Advantages: By achieving real estate professional status with the IRS, you can enjoy the benefit of incredible tax advantages that you can only get from owning commercial real estate.
Better Cash Flow Management: As a full-time investor you can focus all your attention asset management, improving the performance of your property and maximize your cashflow.
Execute Exit Strategies: Once you have optimized the performance of your property, you can execute your exit strategy. Whether you choose to sell and reinvest the profits with a 1031 Exchange, or structure a cash-out refinance, as a full-time investor you can dedicate all your time to building a profitable real estate portfolio.
Leave a Legacy: One of the goals of real estate investors is to leave a legacy to their children. Start teaching them the business now so they can continue to benefit from your legacy down the road.
Paid Vacations: Sound too good to be true? One of the many benefits is that your vacations are paid for by your real estate. It’s a benefit many of our students take advantage of, so ask your tax accountant about it.
Track Your Progress: Downloadable PDF
To make things even easier, I’ve compiled all these steps into a downloadable PDF, which you can use to track your progress. Remember, writing down your goals makes them tangible and significantly increases the likelihood of achieving them!
How To Protect Yourself from Being Laid Off Action Plan
Every Successful Commercial Real Estate Investor Has a Mentor
Questions or Comments? Text PETER to 833-942-4516.
Every successful commercial real estate investor has a mentor. Get your mentor here: Commercial Property Advisors Protege Program
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