Fight Self Limiting Thinking

Our brains are hardwired to protect us from things that scare us.  On an evolutionary level this fight of flight instinct exists to keep us from dying.  In the modern world we have to make decisions to move forward when in hunter gather days the same processes that would say yes to those decisions would lead to our deaths.  You are fighting 200,000 years of evolution to get outside of your comfort zone.  I’d like to share some of the self limiting thinking I have had that have held me back through the years.

Getting A Real Job Isn’t Possible:

I didn’t think I was good enough for a “real job”.  I graduated high school in 2004 and worked at a fast food restaurant for 3 years.  During that time I was going to community college to earn my associates degree.  The local community college had a satellite program with another college to offer 4 year degrees, which I pursued.  Even though I earned my bachelors degree I felt like because I didn’t go to real college I couldn’t get a normal real job.

At the time Michigan was also in the deepest period of the great recession and was hit harder than the country as a whole.  This was also compounded by my subsequent career choices of working as a nuclear plant contractor.  All of these jobs were decent paying on a dollar per hour basis, but no one has a real long term job.  These are 3 week to 8 week temporary jobs that you string together.  The only options in this field to get a real job are to work your way up to management or get an in house job at a plant.  I applied for several jobs early in my career and didn’t even get an interview so I gave up on trying for a “real job.” Ultimately my contract jobs have provided a decent income for my family and provided us with a work life balance that is virtually non existent in the American economy. This has become more valuable than a full time salaried position with benefits. I work less than half the year, that’s a pretty good deal.

Today I watched a TikTok about an intern at Apple earning $41 per hour, which is above my hourly rate in jobs where I have a leadership role and over a decade of experience.  This also doesn’t include benefits.  There is a large economy out there and my self limiting thinking prevented me from seeking roles that I probably could have secured, greatly increasing my yearly income.

Buying Rentals Quickly Isn’t Possible If You Aren’t Rich:

When I was working in fast food around 2007 I had heard the concept of buying 1 house a year for 15 years to build wealth.  You get the houses on 15 year mortgages, get maybe $100 to $200 of cash flow per house and then they start paying themselves off.  I was 100% convinced that this wasn’t possible.  No way could someone buy a house a year.  You can’t save up down payments that fast, the banks wouldn’t allow it, it would be too difficult to manage, etc.  I 100% KNEW that this couldn’t be done.  Fast forward to present day and I’ve been buying at a clip of 2 houses a year and should be able to speed this up to 4+ houses per year.

The BRRRR (Buy Rehab Refinance Rent Repeat) strategy allows you to use the same down payment, or in my case 100% purchase price over and over again.  High linear and almost exponential growth of real estate is possible without having a high salary or hundreds of thousands of dollars. In addition to being able to buy more than 1 house a year I also cash flow closer to $400 per house, even with them all on 15 year loans.

A First Loss Is A Permanent Road Block:

I let a failure stop me for a decade. I bought a house at the tax auction for $6,000 when I was 21, had a new baby, no job, a total net worth of around $20,000, no credit and only around $10,000 of liquid cash.  I didn’t know enough about how to fix the issues with the house, I had no where near enough money to fix it, and it was a constant strain on Mrs. C.’s and my relationship.  We ended up selling the house about a year later for $6,000.  We had spent probably $3K on repairs to the house, not including labor, plus property taxes and utilities.  With closing costs and an extra large fee due to not understanding we didn’t have clear title to the house I walked away with a check of around $1,800.  I sold a paid off house for $1,800.  This was such a painful moment and the strife Mrs. C. and I had kept us from investing in real estate for a decade.


You Can’t Beat Index Funds:

Getting better than 8% returns that index funds provide is impossible.  There’s no point to try because even the best professional fund pickers can’t beat the market.  I’ve only recently learned this self limiting thinking is wrong despite so many red flags that showed it just isn’t true.

Professional managers can’t outperform the market because they have too much money to invest.  When you have to invest $1 billion it’s really difficult to get those returns.  You need to be in dozens if not hundreds of stocks and if you buy a significant amount of stock in a small company you can distort the market price.  I’ve personally owned 4 stocks that have greatly out performed the market.  I bought Redhat in 2003, Hansen Natural which became Monster Energy in 2007,  Tesla in 2016, and Whirlpool in March of 2020.  My dad had advised me to buy AMD several years ago and I didn’t (up over 10X since recommendation).  My sister and her husband own a good chunk of Apple stock through his employment there, and my wife previously worked at Autozone.  All of these stocks have blown away the S+P 500 by a major factor.

It is irresponsible wealth management to not invest in individual stocks.  I recommend investing 10% of your savings into stock index funds, 10% into real estate, and the rest into individual stocks.  If you have a 30% savings rate, then this should equate to 10% of your income going to individual stocks.  Diversification is still important.  This strategy also means you must learn how to evaluate companies and do deep dives into financials.  Index funds are great for people who don’t want to learn or take on the responsibility to learn. Up until the last year roughly 80% of my portfolio and 100% of any new contributions was going into stock mutual funds.

Retail Arbitrage Is Too Difficult:

My first experience with retail arbitrage was way back in 1999.  My mom set up an eBay account with me and I used it to sell CDs and video games I didn’t use anymore.  For some of these I convinced myself I was making a profit, when I was actually losing money on packaging and shipping.  I bought bubble mailers one at a time.  I also didn’t purposely buy things to resell, I just happened to resell things I had grown out of.  For a brief period of time I had the idea to buy up all the Mario / Duck Hunt NES cartridges from Funcoland and resell on eBay.  Funcoland sold these for 9 cents a piece and had several other games that were under $1.  In retrospect I should have executed on this and bought them all up.  Even back then you could sell them on eBay for $5.  Today they sell for around $9 a piece.  Even after fees, packaging, and shipping this is a $4 profit on each one.

Fast forward 20 years and I hadn’t touched eBay for anything more than getting rid of excess crap. Reselling felt like it would be too much work for too little reward.  We were looking for a side hustle and watched some videos of people doing it and decided to jump in.  We learned a ton about keeping shipping costs low and getting inventory.  There is a learning curve but sticking with it for a couple months irons out all the kinks.  We are now able to quickly pivot what we buy and sell and sell on both eBay and Amazon. Our little side hustle is on track to be able to fully fund all of our kids (who are employees in the business) Roth IRAs.  

We started out buying and selling stuffed animals from thrift stores.  We paid roughly $1 each and resold for $12, after shipping and fees netting a profit of around $6. We bought packaging material in bulk and shipped out daily.  We maxed out at around $200 per month.  When covid hit the thrift stores were closed and when they finally did reopen we had a difficult time finding the inventory we needed.

Right after Covid hit and I got laid off we purchased a 3D printer and started selling ear savers. We were making decent money off of this and in our best month hit $1,400 in profit.  Unfortunately I let my main listing lapse and it lost the SEO it had coming to it.  We went from sending out 10+ shipments a day to 1 or 2.

This winter we pivoted to Amazon FBA reselling, focusing on books.  We can scan books and get a green light or red light with a scouting app.  We ship everything into Amazon and they fulfill the orders.  This is much better than individually handling orders.  Each iteration of reselling we learned more and more.  The more action we took the more we learned, and the easier it got.

I Can’t Be A Millionaire:

A million dollar net worth is a lofty goal, for the vast majority of people it is a dream and not a goal.  What separates the two? concrete action steps with timelines.

Start with a known timeline and a known interest rate and we can work out how much we need to invest every month to become a millionaire.  If we assume 8% annual compounded returns and we have a 35 year timeline, we only need to save $440 a month, $110 per week.  That’s $15.70 a day.  $15.70 a day can make you a millionaire in 35 years.  With a 40 year timeline only $290 a month is needed, just under $10 a day.


Are you letting self limiting thinking hold you back? What self limiting thoughts have you had to fight?

John C. started Action Economics in 2013 as a way to gain more knowledge on personal financial planning and to share that knowledge with others. Action Economics focuses on paying off the house, reducing taxes, and building wealth. John is the author of the book For My Children's Children: A Practical Guide For Building Generational Wealth.

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