100 Percent Financed
This is part 3 of our blog series on The Road to Financial Freedom. Click here to read parts 1 and 2 on how to calculate your starting point and financial destination.
Now that you've calculated your financial starting point and financial destination, it's time to start your engines on the road to Financial Freedom. Your success comes down to you and the principles that you set in action to make your dream a reality. Here are 10 key principles that have helped many accomplished investors, entrepreneurs, business owners, and leaders on their financial journey. We hope that these principles will help you on your journey as well.
10 Key Principles to Guide You on Your Journey:
1. Ignorance Is Not Bliss, But Knowing Is
Know your finances so that you can continuously improve them.
2. Sweep Your Own Porch
You have to sweep your own porch before you can sweep someone else's. You must manage your personal numbers before you can do the same for your business. If you don't know your own, personal finances (credit score, net worth, etc.), how could you possibly analyze the financials of a multi-family apartment building? Remember, you are your most important business.
3. Maintain the Right Mindset
Every deal, every market, and every financial instrument are different. Regardless, you will make money in every market as long as you maintain the right mindset.
4. Don't be a Copycat
Don't just "copy and paste" someone else's route without first understanding how they got started. Your resources, including level of education, finances, and available time are likely different. You can bet that the other person you're considering copying considered this. So you should too. Nothing is wrong with following the path that was laid in front of you. Just make certain you are equipped properly prior to starting. If not, you may have to create your own unique route based on your own goals. It's okay, you can do it!
5. Make SMART Goals
If your goals aren't specific, measurable, actionable, realistic, and if you don't have a deadline associated with them, then you are living a fantasy if you think you have any chance of achieving them. So start today, create your goals and write them down.
6. Don't Be Lazy
You may not be a numbers person. You may even have a hard time coming up with the numbers. But you must make sure you take the initiative to learn and understand the numbers before you begin your journey. If you let fear get in the way, then you may never be able to take the first steps on your road to Financial Freedom.
7. Search for More
What if you found a 10-unit apartment building in which the total cash flow was $800 ($80/unit), requiring none of your money in the deal (refer to our previous blog)?
Would you turn this deal down, assuming there were no other deals on the table? We would hope not! Even though it's only cash flowing $80/unit and not $150/unit, there is still an additional $800 cash flow per month in your portfolio that you didn't previously have!
Don't pass up on a deal that works, you just have to look for more rental units. The more deals you analyze, the higher the chances of you closing on the deal that fits your pockets and income goals. Look, look again, then look harder.
8. Find a Mentor
Yes, this can be difficult but there are many people who would love to bring more value to your life. The key is that you'll have to bring value to their lives first. Anything from a cup of coffee to your attendance at a charity event can help you bring value. Just like any relationship, you will get out what you put it in. Start your search for a mentor with this in mind, and you will find the right mentor who is ready and willing to help.
9. Evaluate All Consequences Up Front
Every action has a consequence, and each consequence has another consequence. Have you ever thought about that? Because it's true. Take the time you need to consider what you plan to do and the intent behind your future actions. And don't stop at the first, inherent consequence. Be calculated and think deeper to avoid undesirable outcomes. To sum it up, look before you leap.. then think about what will happen once you land.
10. Reinvest Your Earnings
The average millionaire possesses 7 streams of income. We think it's safe to assume that these individuals didn't settle with just one passive check or just one good investment idea. They kept it going and so should you. Put your money to work so that you can do more with less effort, less sweat equity. It takes the same amount of time to make $100,000 as it does to make $1,000. There are millionaires doing it everyday and many of them do so by reinvesting their earnings.