A note on building leverage:
My own journey towards leverage was a slow, tedious grind that took place over 10+ years.
During the first years of both Storage Squad and my self-storage business, I spent many hours on the phone with annoying customers who yelled at me.
No matter how worn out, frustrated, and beaten down I felt at the end of one of those days, it didn’t matter.
I couldn’t afford to hang up the phone on them or fire them because I desperately needed the money they had. And they knew it.
The same thing with investors. In the early days of real estate, I took money from anybody and everybody. I offered the terms they requested.
When they told me to jump, I asked how high.
They knew they had the leverage and could treat me that way. I needed their money more than they needed me.
But today I own a handful of companies that produce hundreds of thousands in monthly income for me personally, and I have a unique skillset.
People need me more than I need them. And where I used to have no leverage at all, in more and more situations, I find that I have it all.
For example, I had an investor a few years ago who was being a complete pain in the ass.
Not disrespectful, just a pain. Asking a ton of repetitive questions.
Constantly emailing us asking us what we were doing to improve operations at a specific storage facility.
He kept asking for calls with me personally, and we’d spend 30 minutes on the phone talking through the intricate details of every deal he was involved in.
No matter how much attention we gave him, it wasn’t enough, and I could tell from experience that he was stressed and was likely in a bad situation financially.
At the time we had more than 300 active investors, and this one guy was about 50% of our email inbound over the course of a few months.
So I bought him out. I offered to buy his shares and return the $300,000 he had invested. He accepted, I cut him the check, and we removed him from our database.
He wasn’t an asshole, but the whole interaction was more trouble than it was worth.
Luckily, I had the leverage (personal cash flow) to remove him from our company and buy him out.
Here’s another story:
Several years ago, a guy approached me and mentioned that he wanted to buy one of my self storage facilities. He offered a price that I believed was higher than its actual value so I agreed to sell him the property.
About a week into discussions he began acting totally unprofessional.
Calling me at random hours and yelling at me for not providing certain documents or being unavailable at specific times to show him a building.
Now I’m not one to get my feelings hurt, but he was borderline emotionally abusing me on the phone. I could tell this was his plan all along and he does this in many areas of life and business.
He was an asshole.
So what did I do? I terminated the contract. Sorry, bud. I don’t need your money bad enough to justify this headache. See ya!
We still own the property today, and it is performing well, making me money each and every month.
Finally, we had a customer at my web development firm throw a fit half way through a project. He told us our work was horrible. This part of the website was bad. We needed to improve this, that, and the other thing. He said our work was totally unacceptable.
Before you assume the worst, let me tell you, I can handle feedback.
My employees can handle feedback. We welcome collaboration with customers, want to do the best work in the industry, and have a ton of happy customers at our firm.
I couldn’t help but think that something was off about the whole tone of the conversation.
My partner and operator at the business filled me in on the details.
I looked at the work. It was good. The customer was in the wrong and was the only unhappy customer the company had had to date. We had done over 40 projects from start to finish.
Ten years before, I would have done whatever it took to satisfy this client. But some people won’t ever be satisfied. They enjoy having power and abusing it.
This client didn’t realize that we have a lot more leverage than we let on, so we immediately decided to fire the customer and send them their money back. We didn’t need their money enough to put up with their abuse. See ya!
So you see, operating from a position of leverage is a cheat code to a happy life.
When you have leverage, you have options. You have your own capital. You can pay your own bills.
You can do what you need to do not just for your business but for your peace of mind.
If you don’t need to take money from assholes, you can rid your life of them completely.
And when you never have to do what another grown human tells you to do if you don’t want to, that’s when life gets really fun.
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A few tweets from this week:
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Onward and upward,
Nick Huber