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Ready to invest in real estate? Not so fast! Before you get started, make sure that you’re not making any of these 15 stupid financial mistakes that will prevent you from achieving the success you deserve! In today’s show, we’re going to show you how to overcome these obstacles and make truly great real estate investments.
1. You have no real reserves to speak of. It’s feast or famine, 3 am real estate night sweats and feeling stressed all the time.
Goal #1: Save 6 months of actual hard cash. Get a safe and have real money in there, or even gold. No check book, no debit card attached to this absolute savings.
Goal #2: Save a minimum of 10% off every single check or other stream of income into a non-touchable account. This goes to ‘old ME and MINE fund!’
2. You have no health insurance or inadequate health insurance. One of the #1 things that ruin people financially at any level of income is health care bills. Get real insurance.
Hack: You or spouse have a tiny part time job with a company which has killer benefits, such as Fed Ex or Starbucks, at least until you get your consistent income in real estate beefed up and can handle a higher health insurance bill.
3. You are living way above your means, paying only minimum payments on credit cards and are highly leveraged with no hope of getting ahead.
(Dave Ramsey Total Money Makeover recommended!)
4. You Think your accountant is a financial advisor and knows what’s best for you.
Question: Do they bring YOU ways to mitigate your taxes or are you just doing what they say and paying what you pay?
Examples: Health Savings Accounts, 529 plans, 179 heavy vehicle write off, etc.
5. You don’t understand the power of compounding interest.
6. You don’t understand that one day even if you CAN, you won’t want to work like you are now. Time will become incredibly more valuable. How will you pay bills when not from the sweat of your brow? Will you say ‘thank you, past (insert your name) for having your financial plan together!’ or will you hate your former self for NOT taking those steps?
7. Not realizing that Financial retirement calculators are a mirage. They change the closer you get to retiring. Are they accurate for YOU and your lifestyle?
8. You don’t realize that the Financial services industry’s job is to hedge your fear.
9. You believe you should have it all in one bucket. Diversify your savings! Rentals, retirement accounts, metal, real savings, other ‘spokes’. Play the ‘what if’ game… what would happen if we have another big recession? etc.
Example: Current annual income 10x saved and or rentals throwing off 80k yearly or ideally both!
Add social security benefits (maybe, depending on your age).
10. You get distracted by ‘pretty shiny things’, ie, new business trends, fads, branding, QR codes and the like. Thinking if you just do ‘this’, that your company will magically be worth ‘that’ and you can have your ‘exit plan’ with someone writing you a huge check.
11. Not embracing the fact that your product is profit!!
12. Believing that if you just get one more designation that the world will rain leads upon you.
13. You are confused about being a sales person.
14. You think you already know it all and you’ve heard it all, which makes you unwilling to change, grow and expand your thinking.
15. You believe that prospecting is just for new agents and that buying leads and marketing your way into business is the solution. (Check what your net is to see if you’re right).