GET YOUR FINANCIAL HOUSE IN ORDER BEFORE INVESTING
Get your financial house in order before you invest.
Many people are paying off Credit Card debt, however, they also still want to invest in property. It would be very wise to get one’s own financial house in order before adding to the property portfolio.
Following are the three most impact suggestions that will assist you to get your financial health & sanity back.
1) Get your financial house in order & track your most important figures (at least monthly):
Getting your financial health back has to start with getting ones financial household in order. This involves budgeting, tracking expenses and best practice to SAVE 10% of your Gross Income before one spends a cent. Now, don’t clamp up, it doesn’t have to be complicated, it is not that hard.
The tracking can be in very rudimentary forms such as a scrapbook with pencil entries or a simple spreadsheet and ultimately ends up in a full-blown Profit & Loss, Balance Sheet, and Cash Flow. Hey–, if you want to be successful and in control of your finances, one has to treat it like a business…. – because it is a business… unless of course, you want to treat your financial sanity as a hobby and remember, hobbies COST money, we are only talking about your sanity/your life here…so do treat it as your business!
A great idea also is to put a savings plan in place, ideally put 10% away into a completely separate account, which is allowed to grow until at least 3 months expenses are accumulated, 6 months is better. This serves as an emergency reserve – for “just in case” scenarios, such as illness, loss of income, or the like. Note that this is emergency fund and is NOT to spend frivolously.
After that one is achieved, one saves to invest.
2) Be clear on your Budget and follow it (Do not buy the next shiny object – Do not get sidetracked (and buy things that are not in your budget…), for this determines your failure or success:
There are many ways to “make it in financially”. The very best way is to educate oneself about the various strategies and to work out a system that works for you, remembering that what works for you is what you actually apply.
From there you will find the strategy/application that suits you, the more you are working it, the more it will work for you. Once decided on a tool, from a simple scrapbook where you write things down in pencil, via a Spreadsheet, to a cloud-based App, we all are well advised to “make that tool your friend”. The intent has to be to know as much as is helpful to know about your chosen Strategy/Tool.
Note however that it is generally suggested to START OFF, by knowing as much as to be able rudimentary run your tool, a start with a scrapbook that has handwritten entries is better than a sophisticated App that is NOT being used. Just make a start, ANYTHING is better than NOTHING. You will learn while you are doing it and you will refine it as you go.
3) Have a mastermind/mentor and align yourself with other people to get support and accountability. On your own, it’s too easy to let yourself off the hook.
Knowledge is power and if I have learned one thing over the last 13 years as a full-time property investor, that is that one person CANNOT know it all. Hence, as often is said, we are only as good as your team. Everyone remembers the old adage…It’s hard to soar like an eagle when you are surrounded by turkeys…
So, if you are surrounded by turkeys, or when you start and you are surrounded by no one (LOL), go and find a (new) group of advisors/mentors/like minded people (ideally more advanced than you are).
A group makes you more powerful. Leverage (through a group) both in knowledge as well as in ideas & accountability exponentially speeds up your success.
Agree to meet at a regular time. Remember that this can be in person or with technology these days online (takes less time…). We suggest, in the beginning , to meet weekly, until you are used to it and the system is running smooth, in which case the minimum I suggest is monthly.