Budget for Real Estate Wealth Building
November 21, 2015 |
President, Genesis Strategic Planning, Inc
Wealth building through real estate continues to bring results for those who choose to participate. Studies show that home equity is a large contributor to retirement options. That is to say, homeownership is an important step for wealth; yet studies also indicate American youth are not taking advantage of this important portfolio element.
I continue to believe the most important component to bring to the table is a budget. Even the most seasoned professional may not have an effective, personal budget. A realistic budget informs our present decisions and our future income. If budgeting isn’t your thing (or your client’s thing), learn how to make it be a focal point. Dave Ramsey’s, “Financial Peace University,” is one of the best approaches out there for getting a bit more sophisticated around financial basics.
Once the budgeting piece is managed, let it speak to the right real estate opportunity. If you are in the real estate industry or not, be patient – analyze your resources, risk level, and your stress tolerance. It is not a fail to discover if paying down more debt or saving more money before jumping into an investment is needed; it is a CLEAR ROAD MAP for your wealth building journey.
Double check your budget to make sure there are categories that include obvious items such as insurance and property taxes if that is not included in your payment. Be realistic with the necessary purchase price, it is okay to move into a higher price point one day. In order to step into other investments, we need to keep cash growing and working. Successful investors don’t put themselves in what I call investment poverty. That is to say, every dime goes toward the basics; the stress level is much too high and it is always a losing strategy, because real life brings unexpected expenses.
When you manage your money, it doesn’t manage you. When investments are realistic, we get to do life at a lower stress level. When we persevere, consistent small choices turn into big returns. So invest wisely and allow yourself to enjoy your wealth building journey or help someone enjoy theirs by making budgeting a priority.