Change your mindset
Get your finances together. You can invest in real estate without having your finances together but I don’t recommend doing that. It’s irresponsible. Most successful people do what others won’t today, so they can do what others can’t tomorrow.
For many of us, we go through life hoping our paycheck covers our expenses for a given pay period. This isn’t unique to an economic class either. There are doctors making $250,000 to $500,000 a year who are spending every check. I’m not saying don’t spend money – I’m saying find out what brings value to your life, spend money on that, and cut ruthlessly on everything else.
Listen, I’m not going to cover debt payoff in this post. The truth is, the average American has about $38,000 in debt. You have to get this under control. I recommend reading Dave Ramsey or following Paula Pant over at Afford Anything. Get your debt under control.
The 4 keys are this simple
- Know where your money is going
- Increase your income
- Decrease your expenses
- Invest the gap
The greater the gap, the more you invest, the faster you’re in a financial position of advantage.
Know where your money is going
When is the last time you printed your bank statements out and categorized all your expenses to understand where all your money was going? This is the first step and I guarantee you’ll find money going into places that aren’t necessary and they certainly don’t bring value to your life. If you’re not into bi-weekly or monthly budget management, use Mint and allow the software to do all the work. Now that you have a good grasp of where your money is going, it’s time to start making moves.
Decrease your expenses
Americans spend the largest portion of their check on their house, food, and car. This is a good place to decrease expenses. Answer these questions honestly.
Do you need a brand-new truck or BMW with a $500 car payment?
How about your groceries?
Are you eating out all the time or cooking in your house?
Cut back on eating out and put a little more work in the kitchen. If you can downsize your house you can save a ton of money. These are big ask, I know.
How many subscriptions do you have? Did you uncover subscriptions you don’t use? Great, cancel them. Create an “acid test.” If the small things you’ve come accustomed to purchasing daily do not bring value to your life, change your behavior. If they do bring value that’s OK. Remember create an acid test for value.
Increase your income
This is easier than ever if you’re willing to put in the work. You can learn new skills like building websites, ghostwriting posts, managing social media accounts, real estate closing notary, and many more. The options are limitless. Just go to Upwork or Fiverr and see what people are getting paid to do.
You can also drive for one of the car services like Uber or Lyft. If you don’t like that idea, deliver pizzas. Where there’s a will, there is a way.
You can also go the traditional route of performing well at your current job. If you’re already performing well, negotiate a raise. Don’t wait for someone to give you’re a raise. You may be waiting for a long time.
Invest the gap
This is how wealth-building begins for most of us. Your will can lead to something greater. If real estate is your passion, like it is mine, this is where you can gain some serious momentum. It doesn’t happen overnight; these things take time. Once you’re operating from a financial position of advantage you can purchase your first rental property. You can do this by saving for a 20% down payment on a $100,000 turkey rental or invest with no or low-money down using a VA loan or an FHA loan (3% down).
You’re here reading this so I know you have a will to win. Start taking action toda
