How do we think of money anyway?
Many Americans have a limited and distorted view of money and how they choose to allocate, or "invest" it in their lives. At the core, we are either predominantly Investors, Spenders or Savers. To me, as an investor, I think of every dollar that comes through me as either a seed that is planted, with potential to grow (invested in appreciating assets), or simply a dollar spent. The choice is mine, though society and media advertising certainly try hard to sway me toward the less wise choices of consumer and lifestyle spending.

The monthly cash flow gap I might experience on a particular real estate investment property is money I view as seeds being planted.

Spending is not evil, and we all have expenditures that are required such as food, clothing, shelter, transportation, insurance, education, etc. But many people, I have observed, confuse their necessary life expenditures with consumer/lifestyle spending.

Essential expenses are necessary. All other expenses are discretionary, and one has to decide how those discretionary expenses will be allocated between lifestyle and investment or savings options.

If one chooses to scale back on lifestyle and consumer spending and reallocate more discretionary dollars toward assets that might grow in value over time, I think that person is thinking and acting like an investor, even if they purchase a negative cash flow rental property.

Some of the same people who choose to spend money maintaining a lifestyle that includes an overabundance depreciating/disposable assets ("stuff") and consumer junk (more stuff), are the ones who judge negative cash flow investors to be dumb. I think folks who think in those terms are off base in both their spending habits and their judgments of others.

This is not to say that real estate investing, and especially negative cash flow investing, is the best investment vehicle for everyone. It's not, and I talk a lot of potential investors out of buying. Some folks just don't have the financial strength or the emotional temperament needed. Real Estate investing is risky regardless of what the cash flow looks like, but it can also a powerful vehicle toward wealth building.

Also, there are probably few of us who could honestly examine our family budgets and not find hundreds, maybe thousands, of discretionary dollars flowing out monthly toward things less deserving than a real estate investment.

How many of the dollars that pass through your budget each month become seeds that are planted and how many dollars are merely passing through, never to be seen again?

Could you cut back enough spending each month to reallocate funds toward an investment property (or even a Roth IRA) without sacrificing too much in lifestyle? How might that affect your balance sheet in 10 years from now? It's just something to think about.