“The government paid [Major Major’s father] well for every bushel of alfalfa he did not grow. The more alfalfa he did not grow, the more money the government gave him, and he spent every penny he didn’t earn on new land to increase the amount of alfalfa he did not produce. Major Major’s father worked without rest at not growing alfalfa.”
-Catch-22
This month, I had the pleasure of being interviewed by Dan Lane from Rental Income Podcast. If you are a real estate podcast junkie like me, add it to your weekly playlist. You won’t be disappointed.
As Dan asked me why I decided to 10x my portfolio to a million in rents per year, I started thinking about one of my favorite stories from Kurt Vonnegut and Joseph Heller. Two famous authors best know for the best selling novels Slaughter House-Five and Catch-22, respectively.
Let me set the stage for this short and sweet vignette.
Here is Kurt and Joe, sipping expensive scotch on the veranda of a hedge fund billionaire’s mansion. They are completely out of place.
It’s a Great Gatsby moment.
Joe Heller
True story, Word of Honor:
Joseph Heller, an important and funny writer
now dead,
and I were at a party given by a billionaire
on Shelter Island.
I said, “Joe, how does it make you feel
to know that our host only yesterday
may have made more money
than your novel ‘Catch-22’
has earned in its entire history?”
And Joe said, “I’ve got something he can never have.”
And I said, “What on earth could that be, Joe?”
And Joe said, “The knowledge that I’ve got enough.”
Not bad! Rest in peace!”
–Kurt Vonnegut
The New Yorker, May 16th, 2005
As you build your real estate portfolio, you may want to consider the knowledge of enough. While I could have easily stopped buying after hitting my ten-to-million goal (ten properties in ten years to eventually achieve a million net worth), I knew it would not be enough to replace one hundred percent of my income.
This is why I decided to pursue the million dollar goal. I knew that if I had one million in rents hitting my bank accounts every year, it would allow me the opportunity to wrestle with Joseph Heller’s concept of enough.
Better yet, I could easily retire early. Long before the traditional retirement age of 65.
It has been a few years since I hit the million dollars in rents goal. While this was a major milestone in my ten-to-million journey, it has now become more of a existential thought experiment.
Shall I continue down the path of buying one property a year and hiring more staff like I have over the last 20 years?
Or ease back on the throttle and coast to retirement?
What if I quit buying one property a year, like I have over the last 20 years?
After a bit of soul searching, along with cracking the whip on my ego (he always wants me to buy more), I’m gonna slow down and focus on “better is better”versus “more is better.”
It is time to optimize operations, initiate debt snowballs and continue with upgrades that will attract quality residents.
While I will never turn down a screaming multi-family deal that crosses my radar, the new focus will be quality of life for me and my residents.
Thanks to Joseph Heller’s quip, it’s time to pursue the meaning of enough. It’s worth more than a billion.
Thank you Kurt! Rest In peace!
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