When the phrase “leisure class” comes to mind, most people picture private jets, large mansions, and vast family fortunes. They envision people who hold careers as an investment banker, surgeon, or tax lawyer. In short, the general conception is that the leisure class comprises an exclusive group and reflects an unattainable status. This is patentably false. For one, any person who has a passive income that exceeds their expenses can join the leisure class. Secondly, as illustrated by my experiences, the group is far from exclusive.
An immigrant to the United States, I arrived two decades ago in this country with little money and a mediocre education. After a brief search, I found work in a grocery store that served a diverse ethnic community. The store was independently owned and had carved out an ethnic niche in the area, but it was also poorly managed and could not make substantial profits. I was assigned to shelf cans, boxes, and other products. The job paid minimum wage.
After a few years of work, I had saved some money and the store had continued to decline. The owners were looking to sell, and a friend and I pooled our entire resources and went for the purchase. After acquiring the store, we sought to revolutionize our layout, change our cost structures, and bring in more high-margin foods. The store soon became profitable and prosperous. We then bought another store nearby.
A few years later, I opened a third store, closed my second one, and began investing more heavily in real estate. I started small with apartments and gradually moved my way up to strip malls. My time spent at the grocery store gradually decreased as my investments grew. I began to take longer and more frequent vacations. One morning I woke up, looked in the mirror, and suddenly realized – I was a member of the leisure class.
It certainly took a lot of luck for me to get where I am today, but this does not mean that my experience is impossible to replicate. In fact, I learned several valuable (and replicable) lessons along the way:
-Take risks with your money but not with your investments. Putting all of my money into a grocery store was certainly a big risk, and if not for that risk I wouldn’t have had many other investment opportunities. But when it comes to management or real estate, it is the safer investments that are usually more dependable and profitable in the long term.
-Grow your investments, not your lifestyle. Our Western culture implicitly teaches us to spend more money when we make more money. This is imprudent. Instead, when your revenues increase, reinvest those earnings into your business or put them in new investments. There’s always time to live large later.
-People matter. It may sound cliché, but it’s impossible to get anywhere in life without relying in part on the people around you. I have been fortunate to surround myself with smart and talented investors, store managers, and employees.
I invite you to join me as a member of the leisure class. I don’t own planes or have an indoor swimming pool in my house, but I’ve reached a point where I can live comfortably off of my investments. With some diligence and luck, hopefully you can reach a similar point.