This is our new section called “Money Tips“. We are going to look far and wide for the best money tips out there and bring them to you. Our goal with this is to provide you with as much information as possible so when it comes to your real estate investing, personal finance and general money decisions, you make well informed decisions.
So let’s get started.
1. Pay yourself first.
I am sure you have heard of the “pay yourself first” mentality. Well if not let me explain. You should always take at least 10% of any money you make and save it. If you can keep yourself disciplined regarding this you will find yourself having a nice nest egg for all those real estate investments you would like to make.
2. Stay ahead of inflation.
When you get a raise put 10% towards saving. If you do this with your long-term savings like retirement plan, your contributions will increase automatically in proportion to your pay increase. This will help ensure you stay ahead of inflation.
3. Can you sleep at night?
When making investments you use the “Can I sleep tonight” test to make sure that the investment is in-line with your risk tolerance. If you lie awake at night thinking (worrying) about the investment, you probably should not have any money in the investment.
4. Diversify, diversify, diversify.
If you want to manage your investment risk you need to diversify or as the saying goes: “Don’t put all your eggs in the same basket.”. By doing this you limit any damages that might occur if one of your investments goes bust. Now some people will argue that you can not become rich if you diversify, but I must say I like having more than one type of investment, but still like to keep most of it in real estate.
5. Too good to be true.
There is a saying that goes: “If it is too good to be true than it probably isn’t true.” Now there are two sides to this one. One, it’s a scam or two it really is an opportunity of a life time. So how do you know which is which? My advice is research, research and then more research. Find out as much as you can. If the deal is of such a nature that you have to decide then and there I found then the deal is usually “dodgy”. Just don’t dismiss everything as being “too good to be true” before you did some homework but be careful at the same time.
Until next time.
“You can only become truly accomplished at something you love. Don’t make money your goal. Instead, pursue the things you love doing, and then do them so well that people can’t take their eyes off you.”
- Maya Angelou quotes (American Poet,1928)
