I have made a lot of mistakes over my business career and done a few things right.
Fortunately, it only takes a few good decisions and some grace from the universe to be successful. But if there is one lesson I wish I had learned early in my career, it is this:
- Always have reserves to fall back on.
Another way to say this is to save money from the start. I had the mindset early on that I would start saving, or setting aside reserves, once I was making enough money to do so. That is not the best way to think. It is valid, but more often than not, it pushes setting aside reserves or saving in one’s personal life into the future.
I developed this habit early, and it has haunted me for most of my career. I have learned the hard way: pay yourself first, in the form of savings.
Fortunately, in the self-storage business, the reserves needed are not that great. I developed the practice there of setting aside each month 1/12th of, let’s say, 0.15 cents per square foot per year, and it was very powerful. Capital expenditures and insurance deductibles were never paid with operating cash flow.
I sure wish I had done this as powerfully in all my other businesses and in my personal life as well. I am certainly better at it than I was earlier in my career, but I can still improve.
A Story
The reason I am sharing this is because I learned by watching someone I have a coaching relationship with. This is also an example of how I learn from almost everyone I work with.
One of the people I work with owns multiple businesses, like many of us. He also owns and has developed real estate and wanted to break into self-storage. He contacted me to mentor him because, although he was very successful in other asset classes, he had never done storage.
He had humble beginnings and started with very little. Everything he has, he has created and worked for.
He purchased a portfolio in a smaller market, as well as started a self-storage ground-up development in the same market. In other words, he entered the market with a large footprint. He purchased the portfolio right, upgraded it, and drastically increased the NOI and cash flow.
On the development side, everything went well until the roofs went on his new climate-controlled buildings. With the first big rain, bam…water everywhere. In development, stuff happens. This was his curveball, and I learned a lot by watching how he operated with this issue.
He took all the right steps, contacted the system manufacturing company, got validation that the roofs were not installed to specs, notified the contractor and subcontractor responsible for installing them of what was going on, and sought relief. He was not overly lawyered up, but enough for the parties involved to know he meant business.
It is still ongoing.
But here is where he separates himself from many others.
The person I work with knows how critical speed to market is and decided to use his reserves to repair the roof so he doesn’t lose a lot of time hitting the market. He will replenish the reserves when the issue is settled.
Now he, like many of us, was not given a lot of money to start off with. If he had, I’d say he most likely wouldn’t have the reserves he has today.
He has spent a lifetime putting away money, both in his businesses and in his personal life, so when these issues arise, and they always will, he is ready.
Boy, I wish I had developed that habit earlier in my life.
Start Where You Are
It is never too late. Just start where you are and make a decision—a promise to yourself—that you will set aside a percentage of all income you receive, starting now. Not when things get better. Not when you make more. Now.
Pay yourself first.
With every business, do the same.
What my client showed me wasn’t just smart financial management. It was freedom. When that roof failed, he didn’t panic, scramble for loans, or lose months waiting on a legal resolution. He wrote a check and kept moving. That is what reserves buy you—not just money in a crisis, but the ability to keep playing the game on your own terms.
The people who build real wealth in this business—and in life—are rarely the ones who made the most money the fastest. They are the ones who were ready when the roof leaked. Who could move when others were frozen. Who had the patience and the resources to wait for the right opportunity and execute when it came.
That is the power of a habit that starts small.
It still hammers me that I didn’t develop it sooner. But I can tell you this—every dollar I set aside today feels like a gift I am giving my future self.
And there is no better business to build this habit in than self-storage.
Start today.
