You should put your money to work for you. Then your money will buy that TV etc… for you. If you can’t distinguish between necessary and unecessary expenses, you’ll find yourself back where you were. I’d hate to see that happen to you. I know from experience. I’ve since changed my ways(now I’ma tightwad) :shocked.You have to commit NOT to buy anything that you don’t truly need. There are a lot of people who spend like they have more money than they actually own. Buy ASSETS THAT PRODUCE CASHFLOW!! I can’t say it any better. The cost of the TV does not justify the purchase. My wife saves me so much buying stuff we don’t need that we should MILLIONARES in just a few months! :shocked :banghead.
Now you know why I didn’t want to get into my justifications for buying the consumer items. I am back on track, and my goal has been to become fiscally responsible, and to save $100k so I can invest in real estate.
But here is the question… when do you spend your money on the fun stuff?
j
When you find someone else to pay for it. If you have to finance your lifestyle you can’t afford it. Are you’re saving money so you get into REI? If you say YES to that, you’re saying NO to anything that doesn’t accomplish that. If you’re saving money to buy stuff, this site and all the wisdom on it will not help you. I know you want to buy nice things. I understand that. When you’re making enough unearned income to finance the lifestyle you want without having to work at a job, then you can spend it… wisely.
Unearned income. That’s something I don’t think I really understood until just now. Is that really the game? To make money from the investments so that you don’t need to work a job? I have said that a lot of times but I don’t think it clicked until just now.
I have always thought in terms of making a pile of money and living off that pile of money. In other words, buy investment, sell investment, save profit repeat until I hit my number and then spend.
I have some thinking to do…
j
Buy investments that provide cashflow(unearned income) to finance the lifestyle you want… If you want more income, buy more properties. When you work for money ( trading hours for dollars), your income potential is limited by how much you can work and if there are any hours to work for. When your money buys assts that pay you money, it’s your money that’s working… not you… Keep reinvesting your money and its earnings to get more money… That’s how its done…
I am trying to picture what cashflow scenario would give me $10k a month. That’s the hurdle. I can picture flipping and stacking, but I need to be able to realistically see the $10k a month to be able to work towards it. And 100 SFH earning me $100 a month, doesn’t appear to be worth the effort. And 10 SFHs earning $1000 a month seems unlikely.
Like I said, I have some more thinking to do, the only certainty I have is to stack my money for the next few months and get rid of debt.
j
Soholingo,
How do you eat an elephant? One bite at a time. Do you need to earn $10k/month right now? Just concentrate on one property at a time. You have to be in it for the long haul. Just think of owning 20 properties that are paid off and giving you $1500/month. You keep about half of that for your income. Then you have $15k/month. That takes time, but it will happen.. Of and don't forget all the equity built up. Keep your eye on the prize. :beer
Ok, THAT I can see, its been a good dialog.
There ya’ go. Good luck soho. :beer
I am on the last chapter of this book and for some reason I thought I had read it before. I may have, but I certainly don’t remember it. Or either I wasn’t ready for it. In either case, this book as made quite an impression upon me.
I have done all of the bad things and only now am I just starting to see the good things that I have done, and need to get back on course. Borrowing the $12k was a huge mistake. Even though its free money, and I still have 6 months to pay it back, I simply was not ready to borrow that kind of money.
Knowing what I know now, I would have just paid the IRS off in installments. Had I done this my credit score would be higher, I would have no other outstanding debts, and I would have half of the the IRS paid off, and I would not be another 6 months to a year behind. And you know what, being 6 months to a year behind schedule is what’s really starting to P!$$ me off…
I need to redouble my efforts and make the money’s back pronto. At any rate, I may start another thread on “The Richest Man in Babylon” but I just wanted it noted that it sure opened my eyes and veered my to the right course.
j
Soho,
I just read that book recently. It was a little hard to read because the wording was much like reading the bible. But I kept at it and itis a great book. I find it amazing that these simple rules about money have been around for so long. I really like the part where it discusses the value of work. Many people avoid hard work but the guy (i forgot his name) welcomed it, he loved it. It's an attitude that helps you work overtime, get a second job etc.. in order to raise the money you'll need to invest.
Don't get too down yourself about that 12k. Treat it as learning experience and move on.
Jay,
Last year when you started this thread, you had a goal of raising your credit score to 650. I suggested that you should really shoot for 720 to be an “A” credit borrower.
Well, in today’s lending climate, the “A” credit score now seems to be 750 and up. Time to revise the plan.
I am trying to picture what cashflow scenario would give me $10k a month.
Soholingo,
Here is a REALISTIC scenario that you can achieve in 5 years or less IF YOU WORK VERY HARD. You can buy 50 rental units with a positive cash flow of $100 per unit per month. That gives you $5,000 per month. Then, you do all the management and maintenance, which will earn you another $100 per unit per month. There’s your $10K per month and you’ll end up about 12 hours per week to do the work (after the business is stabilized). The question is whether you’re willing to work hard enough to do it as you’re building the business (most people are not).
Good Luck,
Mike
Mike,
I’ve never really seen it put that way before. That is a great way to put it. And either way you look at it, whether you do maintenance or not, that is an excellent income from rental properties.
I was wondering if you don’t mind divulging personal info, are you on track to accomplish that, or did you accomplish that in 5 years? Not being skeptical at all, just really curious how it started for you.
Steve
stevie-o,
I dont think what Mike wrote is difficult if you have target area that can produce good cashflow (buying right)…I’m doing on average a net of $200 per unit per month…And thats after everything is taken out,including prop management and mortgage,repairs,water,insurance,taxes etc…Buying right is the most important factor in this game…I’m at 14 units in about 15 months and ready to close a larger property in a month…I don’t know when I will stop buying…I have come to love real estate and knowing myself I won’t be happy until I have 10k a month in net cashflow…I’m only 1/3 of the way there…
Way to go RookieNYC! You go on wit yer bad self! :biggrin :beer
You know it just dawned on my that I am lazy. I am doing the bare minimum to survive and provide for my family. To be honest, the more I think about it I am doing little more than rookie-nyc’s friend who is fat and happy to stay on the couch.
Case in point:
I bought 5 laptops for $399. I thought I could sell them for $499 or somewhere from $400 - $500. Well all I have encountered are scammers and lowballers. In other words I paid too much for the laptops. I am now offering them for $395 so that I can get my money back. I have two bites, one guy wants to buy two, and one guy wants to buy all four but at a discount. And while I am going to call them, I should have called them by now.
I can only imagine how I would be performing if these were homes. These are the things that I am coming to realize about myself. I have been lazy, a slow/poor goal setter and a poor money manager. The sad thing is I haven’t always been this way, and its killing me to figure out why I am like this now. At anyrate, I am just posting my revalations, nothing has changed other than I know myself a bit better.
Jay
The other thought is that I could keep the computers and make $500 a weekend by teaching classes on them. At least that’s the vision. I am a very good instructor, and now I have the machines to teach. The “work” comes in finding clients, a location and a system to teach.
Thanks for listening…
j
Soho,
If you give a "just enough" effort, you're cheating your family! I say that to myself all the time. Just ask yourself, "Am I doing the best I can to provide for them?" always put forth your best effort and you can hold your head up.Give yourself credit for recognizing your mistakes. What I see you doing is that you're easily distracted from your goals. You need a definititive goal and a plan with measurable results. I'm sure I suggested some good books that will show you some guidelines. aplan will guide you and keep you on track... IF you keep yourself on course. Buying & selling laptops and/or teaching to recou the money is taking you so far away from your actual goal.. STAY FOCUSED! :biggrin Good luck man. :beer
To be honest, the more I think about it I am doing little more than rookie-nyc’s friend who is fat and happy to stay on the couch
For what its worth that guy had lunch with me today and begged for his position back (which I gave to him)…
People can say what they want about money but the line that stays in my head is simple…Boiler Room and Wall street
They say money can’t buy happiness? Look at the smile on my face. Ear to ear, baby.
Anybody who tells you money is the root of all evil doesn’t have any.
Gordon Gekko: Greed is good. :bobble