What is a High Performer?
The first thing we need to do is dispel a myth: “The high performer has high income”. It’s true that high performers achieve a high net worth, but they may have a very low income. Remember what I’ve said about your real estate investments: The high performer looks for ways to build equity and is willing to give up cash flow. It’s the same way with a high performer’s personal finances. In personal finances, we don’t call it equity, it’s assets. Cash flow becomes income after expenses.
The high performer might have a high income, but it’s not necessary. The high performer is someone who has the mindset of assets first, the nature to take appropriate risks, and the motivation to work to achieve these things.
Low performers might also have high income. Look at one of my tenants. He is a great guy, pays the rent on time. He inherited a plumbing business from his parents and he seems to be running it well. He doesn’t do much plumbing work himself, but manages his employees. He is comfortable. He makes a lot of money. The problem for him is he spends his money on toys. He is always looking for a place to store his new RV or side by side. He has a great income but doesn’t have the high performer mindset and so is not a high performer.
This could be the same way with my physician colleagues. Some of them drive some fantastic looking pickups to work. They have all the best hunting gear. They have great income, but their expenses always keep them from building up money to invest. Their idea of investing is whatever their employer puts into their 401k and they assume it will get them through retirement. It won’t.
That kid working at the drive-thru might be a high performer. You don’t know it when he smiles and hands you that supersized value meal but he’s going home tonight to evaluate real estate deals that his assistant has found for him today. After doing that for an hour, he’s off to mow lawns for the landscaping business he started himself. He’s taking every dollar that he earns and putting it into an easy-to access bank account to be ready to buy his first deal. He will need cash flow to get started, but as soon as he can, he will be quitting his fast food job and going out on his own as a wholesaler. He will be keeping the best properties for himself and will slowly build his assets while he is eating ramen noodles and reading real estate books instead of paying for Netflix. He is a high performer and you would do well to emulate him.
How Do I Get Started as a High Performer?
You first need to make sure you are a high performer. You need to reorient yourself to understanding that 401k is not retirement, it is an emergency fund, and it won’t keep you in the lifestyle that you want. Stocks are good to have, but they are not assets (unless they produce dividends). You need to obtain the mindset that working hard today is good but is not enough. That income you have today needs to go into assets, not toys. If it doesn’t produce income for you, it is not an asset.
You may be a high-income earner. That’s fantastic. You may love your job. Also great. But if you are not of the mindset that your job may end at any time, you are not a high performer. Getting started means taking that huge income and investing now so it can produce you income in the future, when you don’t have your job any more. Getting started is all about mindset. The quicker you can adopt it, the quicker you will become a high performer.