In friends, Virtue>Real Estate

[Maximilian Marck]

I've recently gotten a new roommate. I knew him in college (I just graduated in May), and he's  a great guy. He was an excellent soccer player, valedictorian, and I was vice-president under him in the Catholic Men's Household. He doesn't really have any entrepreneurial ambition, let alone real-estate aspirations. But him moving in has been a big boost in my commitment and motivation in real estate, but in everything else too.  

What I realized is that you need to find people who are more than just competent investors. You need people who share your values, and strive to habituate them. Virtue, as Aristotle says, is a habit in accord with reason. In other words, virtue is knowing what you should do, and habitually doing it. If you have people around you who are virtuous, it doesn't matter if they are entrepreneurs. My roommate knows that he should, say, go for a run, and he does it. I see that, and I am edified by it.

Beyond what virtuous friends can bring to your business habits, the more important reality is that the virtue that they inspire in you is more crucial for your happiness than any deal could ever be. The reason, of course, is that the happiness of virtue comes from an internal source. You can be virtuous in any setting, even if you have lost everything. There have been virtuous men and women in penthouses, but there have also been virtuous men and women in concentration camps and cardboard boxes. No matter what your circumstances are, virtue--courage, temperance, generosity, honor, friendliness, and all the rest can serve to make you happier in the most human way possible.

[Jim K.]

Huh. My life is a bit different from yours, of course. I'm in my mid-forties. I live with my wife, and we are both Eastern Orthodox Christians, (what you would probably call Orthodox Catholics). There are certain aspects of our shared faith that very much reflects our values in business. My wife is also very keenly interested in financial independence and building our business together. So we work together all the time.

I have a number of other friends from back in my high-school and college days. I would consider them virtuous people. As time has gone by and we've gone down our individual lines of development in our jobs and lives together, it's getting harder and harder to connect with some of them. A disturbing number of them are living in way too much house, driving way too much car, and are not saving or investing enough of their healthy paychecks. Sure, they talk about "independence" and "freedom," but when it comes to money, they are about as dependent as it gets on an employer and a job, usually two employers and two jobs. Three, four missed paychecks by either of them, and they'd be practically destitute. At the same time, they look at us, driving our paid-off utility vehicle, living in a modest home and planning to move into an even more modest home, with a touch of quiet pity. When I tell my friends that I'm leaving a $150K condo and moving to a $50K duplex and renting out half of it, some of them respond with concern. "Why are you downsizing?"

The answer is that we're doing it to funnel more money into our investments and decrease our reliance on our jobs for our income, but that doesn't always make sense to them. Plus that, we simply don't want a bigger, more expensive, more luxurious life. My wife's passion is her ceramics -- I'm looking forward to a retirement spent writing and building things. We want a little house with a big studio and workshop in an artist's colony overseas.

Money has become a thoroughly taboo topic with some of my lifelong friends. Sometimes, they talk about the money they have in their retirement accounts. Some of them play the stock market with an investment account. It's reached a point where I don't want to tell them how much we have invested in our properties and how I'm making that money work harder for us, and it's just getting worse. They ask me how many properties we own and I lie. They ask me how much we owe on them and I lie some more. It's just easier.

If you go down the REI path, I suspect you'll start seeing this, too.