Never Walk Past a Problem

Being diligent is a necessary financial truth to build wealth on a worker’s budget. Last week I introduced this truth and asserted that financially successful people are diligent in most every aspect of their lives.

This not only includes the most obvious examples of diligence, such as paying bills on time, working efficiently and making wise use of  free time, but also a more broader interpretation. Simply put, diligence is fixing what’s broken now, not later. Stated another way, being diligent means never walking past a problem.

We’ve all done it. Ignored those missing shingles on the roof, disregarded the small oil droplets on the floor of the garage or pretended the tiny leak under the sink would eventually disappear. I’ve learned these little “leaks” turn into big financial messes over time that can derail our wealth building plans.

Real estate investing and rental property management provide the maximum opportunity to learn diligence as a financial truth. In real estate, there are “leaks” encountered near daily. I’ll share two quick vignettes that illustrate how not being diligent ended up costing time and money on two of our real estate investments.

In 2016 we found an excellent for sale by owner duplex at a great price. While there were some evident issues that would need to be addressed, it was just too good of a deal to pass up. The most serious problem was the location of the water meters. For whatever reason, the builders placed the meters almost in the middle of the asphalt parking area with the water supply lines to the units running under the asphalt.

It doesn’t take a rocket scientist to realize vehicle traffic continually running over and sometimes parking on top of the casements surrounding the water meters could put pressure on the supply lines causing them to crack. There was even visual evidence where a failure had occurred in the past.  

The obvious fix would have been to relocate the meters in a grassy area off the parking lot and reroute the water supply lines where they were not constantly exposed to vehicular traffic. This would take some time and a few thousand dollars to repair, but not the most difficult job for trained professionals.

Of course, the point of this vignette is to illustrate how not being diligent costs time and money! I didn’t make the required repairs after we closed on the property.  About six months later I got the call, on a Memorial Day weekend of course, that water was pooling up in the parking area. Sure enough, the water line was cracked at the meter due to the constant strain from vehicles driving over it!

Nothing better than a Memorial Day weekend spent busting asphalt and covered in mud to focus the mind! A handy man friend of mine helped me dig up, repair and re asphalt the water line on the cheap but I had blown a whole weekend and still spent about $500. The featured pic is an “after” shot of our handiwork.

We had only made a temporary fix, the problem wasn’t resolved. A few months later I spent the time and money to fix the problem correctly. It wasn’t the easiest job but I haven’t had to worry about it again. If only I’d just done the diligent thing and fixed the problem when I discovered it!

You’d think I would have learned my lesson but sometimes we are all a little hard headed. Just a couple of years later, another example of my non-diligence at one of our other properties proved even more catastrophic! A substandard water supply line from the kitchen sink supply valve to the dishwasher popped loose leaking water at 50psi pressure for a number of hours! This resulted in significant water damage to our condo unit as well as the two units below.

The condo was pretty small and I thought I knew enough about home inspections to forego paying a licensed inspector $350 to check out all aspects of the home. During the do-it-myself pre-closing inspection, I noted the dishwasher supply line was simply plastic tubing held onto the valve by a compression fitting.  Common sense dictated that a good bump of this shoddy plastic tubing could cause it to pop loose and leak water everywhere. A $20 steel braided dishwasher supply line would have solved the problem quickly and cheaply.  

Of course, I walked right past the problem and it cost me dearly. I was too focused on closing the deal and getting a tenant into the residence instead of being diligent and fixing discovered problems. Even though my gut told me take action, I was not diligent.

The fallout from this leak episode took over two months to fully remediate. Although I was able to make lemonade out of lemons with the insurance settlement and get a new kitchen for our unit, we ended up coming out of pocket several thousand to keep peace with the neighbors. More impactful was the incredible stress placed on my family as well as our tenant during those two months. 

I walked past what appeared to be small problems and it cost me in time, stress and money. We have to trust our gut and when we feel there is a problem, immediately develop a plan to remediate. That is the essence of being diligent.

Although the vignettes I shared relate to the material / financial world, it should be evident, diligence is not only a financial truth. Diligence equally applies to those problems in our personal lives and relationships. Never walk past a problem! I am quite certain not espousing diligence as a financial truth will make the journey to build wealth more difficult and perhaps impact other aspects of our lives.  

Next week I’ll share some thoughts on my fifth and final financial truth, knowledge is money. If you’ve enjoyed reading blogs about financial truths, be sure to check out my new book “Millionaire on a Worker’s Budget: Five Financial Truths to Build Wealth” available for pre-order now by clicking here!

The commentary provided in this blog is for informational purposes only and is not intended to be a source of financial or investing advice.

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