Are You a Consumer or an Investor?

You're about to have a moment of self discovery, where you find out who you really are. And this understanding could have major implications on your financial destiny and whether or not you become rich. Two simple questions will help you find out if you are a consumer or an investor. And its not about where you are today, but it's really about where you are going. Consumers eventually go broke (or close to it) while Investors eventually thrive financially. Have the courage to find out which one you are in this video:

Are You a Consumer or an Investor?


I am going to share with you two questions that's answers will help you determine which one you are. This is important information because consumers are broke or they're about to be, while investors are wealthy or will be. In this blog you will learn to determine the differences between the two, so that even if you're a consumer now, you will know how to become an investor.


Question 1: What Do You Do With Your Extra Cash?


I want you to picture the last time you had some extra cash. Extra cash is any money you have leftover at the end of the month after you've paid all your bills. It could be from a work bonus or big tip night, or even a lower monthly bill than usual. The question is, "What did you do with that extra cash, the last time you had it?" I am not talking about what you would do with extra cash in the future, I am asking what you've done with extra money in those past situations where you had leftover funds at the end of the month.

If you spent that money on something that has absolutely no chance of any financial return, then you are a consumer. This would include splurging because you deserved a big vacation, taking a hot girl on a big fancy date, or buying your friends a round of beers. If the last time you had extra cash you spent it on anything without a financial return then you are a consumer.




If the above does not describe you, and you spend your extra money on things that have a good chance of financial return, then you are an investor.  This could mean investing in yourself by buying education and training like this, or books like the ones I have written, it could mean purchasing real estate or stocks, or anything else that has a fighting chance at having some form of financial return,.

In this example we will assume that you have passed question one and are an Investor. Question two is where we separate the men from the boys. When looking at an investment, you should focus on the price of the return first. This is what you could potentially earn by investing in the project.


Question 2: Are You Focusing on Your Return on Investment?


I've seen people save up to purchase stocks, but then they buy penny stocks, because that's all they can afford. Or if someone that lives in the Bay Area of California, wants to get involved in investing, they find that even the single family homes are a million dollars plus. So they will go to a site like and purchase a single family home of the same size in some terrible part of Detroit just because it is only $10,000. They think they are getting a cheap investment that they can afford, but they are actually purchasing a terrible investment. They were only focused on the price of the property instead of focusing on the returns first.

A true investor focuses on the return on investment (ROI) because they know that if the returns are strong enough, whether you can or cannot afford it is not a problem.  There are many options available for financing good investments.  There are many ways to acquire an asset if the return is high enough like:

  • Banks
  • Private Lenders
  • Angel Investors
  • Venture Capital
  • Creative Financing (which is what I teach in many of my videos)



I know a guy working on a deal using creative financing that could generate $600,000 or more per a year net profit The crazy thing is the development cost may actually be less than a million dollars. Many people would be intimidated by the idea of a million dollar investment, but an investor will look at it and say, "If  I can bring in a net profit of $600,000 a year on a million dollar investment then the cap rate would be 60%."

Let me put this into perspective for you. The next time you see a class A apartment building, it might trade for as high as 6%.  In other words, you'd have to have a $10 million apartment building to bring in the same $600,000 return on investment that this one deal could bring in net positive returns.  Focusing on your returns first does not mean that you ignore the price and costs of taking on the investment.  Those numbers actually help you determine your ROI. Focusing on the ROI first is like focusing on what is possible prior to figuring out how to structure and make a deal happen. A common mistake many people make is to assume that the investments they find are the only ones out there. As Henry Ford once said, "Whether you think you can or you think you can't, you're right."


Price Vs Return


Another challenge is figuring out whether you have the ability to afford a deal or not. The first step is to  look at your finances to figure out how much of a down payment you can afford. Then you need to assess your finances and bills to determine what monthly payment you can pay. Next you have to look at the returns which are a lot more complicated to calculate because there are a lot of factors involved in determining an investments ROI. You have to calculate in any risks, costs, and tons of other factors involved in purchasing an investment.

Henry Ford said, " Thinking is the hardest work there is, which is why so few people do it". You have to use your brain when it comes to figuring out the return on investment. That is the biggest difference between an investor and consumer. An investor doesn't just put their cash towards the purchase of just any stock or real estate. They figure out the ROI and determine if it is a wise investment.


Make Smart Investments


It doesn't matter which way you choose to invest your money, if it's going to produce a financial return, you have to ask yourself: "What is that return going to be?" And, then spend the time and energy necessary to finding out the answer to that question.

A real estate investment is not just about the price of the property. You can acquire a property with creative real estate by structuring a deal creatively through creative financing. I have some great videos  and blogs on how to purchase real estate with little funds by structuring creative financing. My team and I do this all of the time, every single day of the week, including today. Creative financing always works but there is so much more to it then that. There are many banks and hard money lenders looking to invest in good real estate deals and smart investments. If you can find a good deal, you can get the deal funded, all it takes is some creativity.

So those are the two questions to ask yourself, to determine whether you are a consumer or investor. I have also provided you with tools you can use to become an investor if you are  a consumer that wants more.  If you want to become a first class, market leading, real estate money making machine, check out my apprentice program.  My coaching staff and I, work directly, hand-in-hand to transform people into real estate entrepreneurial professionals.



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  1. Richard SHAW says

    Make money using. Other people’s money!!!

  2. Adeniji Williams says

    Thanks Lord Jesus! I am an Investor and not a Consumer.
    Thanks for your question!

  3. Devon Lairmore says

    I’m interested in the apprenticeship, How or where do I get started. thank you for the awesome video. -Devon

  4. DJ Mikosz says

    Great video ! I have a opportunity that has many different variables and I would love to work with one of your mentors to sort it out correctly.

  5. Bakir Ebrahim says

    I am considering of applying to your apprentice program. I have a real estate license too in Florida.

    Thanks for sharing the videos.. They are awesome.

    • Freedom Mentor says

      Glad you are enjoying my videos! Consider making application to our Apprentice Program so you can continue your education and decide if this is what you are looking for.

  6. Sam-Emuwa Samuel says

    Phil, if I don’t do anything but watch and listen to your videos one hour everyday. I am made!

  7. I am ready to become Phil’s Apprentice! The student is determined!

  8. David Martineau says


    What a great video and a killer tie.

    I am re-positioning my current situation to take advantage of coming on board your mentoring program.

    Thanks again for sharing the wealth!


    Consumer of Investing.:)

  9. Thanks a lot for the video
    You are a great teacher.

  10. Thanks a lot for the video
    You are a great teacher

  11. You hit the nail on the head.

  12. Michael Lee says

    I have been listening to you about for 3 years.Since I am still medically recovering and not working right now. I am 61 years old and I have been learning as much as I can about real estate investing for about 3 years. That is about 10 hours a day, 7 days a week. I may call you someday because you are one of the few I have trust in. I also had a Texas real estate broker license for about 30 years. I do not get any benefits because my wife makes too much money. My older brother recommended that I be a real estate investor when I’m ready because of it’s potential to be more flexible.Instead of real estate I went into construction when I graduated college in 1980. I have read many of your free things and I look forward to learning more from you.

    • Freedom Mentor says

      Have you considered making application to our Apprentice Program? So much of the research of finding leads can be done from your computer at home.

  13. This is great and informative thanks Phil.

  14. Lisa Kelley says

    I am going to come into some money in a few months and have started up a small business…im about to invest in another business with my brother..i’ve always wanted to get into real estate investing..tried to get on your apprentice team but didn’t make it…but it didn’t kill my determination to succeed..i love your videos they are very educational and attainable goals
    ..hoping to continue building so I can meet you…

  15. Cool presentation, show me the money…

  16. Francis Horne says

    Hi Phil, your videos are very good , explained with such clarity, keep up the good work.

  17. Love your videos Phil

  18. Danny Trujillo says

    PHIL, oh man, you present your info just right!…….

  19. Salva Wright says

    Thank you so much for these videos.

  20. Great video Phil.

  21. Cliff Fung says

    Phil, thanks for sharing this video is awesome. Love it.

  22. i am a investor Mr. Phil and this info is awesome you are amazing i love your energy

  23. CAROL HAYS says

    I am trying to learn how too become a real estate investor. I will get your book and, study. thanks carol

  24. Anil Kumar Kapuwan says

    Great knowledge.

  25. Danny Medina says

    Phil, you’re invaluable. Thanks for another awesome video!

  26. dwan ford says

    Excellent video

  27. dwan ford says

    Excellent video

  28. Edward Gombeda says

    Can you send me the information I just watched your video about training to become an investor thank you

  29. Tusingwire Julius says

    For sure,You are the man.
    I have learn about a consumer,i spent all my youth as a consumer but from
    today on I AM an investor.

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