The Stress-Free Guide to Getting Your Finances in Order
TL;DR - It’s as simple as saving more than you spend, budgeting, eliminating debt, and then investing.
A real estate-rich investment portfolio is on your time horizon… you can almost feel the passive income dripping into your bank account.
You’re laughing in pure joy as the multiple properties you own provide for not only your retirement but for your significant other and your children as well.
Life’s good – and then you’re brought back to the present.
Where you barely have any savings. And the only rental income in your life is the one going to your landlord. Oh yeah… and the college debt. Can’t forget that.
Unfortunately, this is the story for a majority of people around the world. The good news is that it doesn’t have yours anymore.
If you want a life where you don’t have to stress about your finances - and can invest in real estate - then buckle up. Because we’re getting you into the fast lane.
9 Simple Steps to getting started investing in real estate
Get Ahead of the Pack
If there’s only one thing you take from this article, let it be this: SAVE MORE THAN YOU SPEND.
It’s really as simple as that.
You’d be surprised (or maybe you wouldn’t) at how many people blow every bit of cash that comes their way.
In fact, 54% of Americans live paycheck to paycheck. And it isn’t just people with low income that live this way. About 40% of people making $100,000 or more have the same problem.
So just by saving more than you spend, you’re already ahead of 54% of Americans!
Don’t fall into the trap of keeping up with the Joneses, as it’s called. If you’re unfamiliar with the term, it means trying to impress everybody around you. Buying that brand new BMW. Getting a new smartphone every year. Basically, it’s spending above your means.
Live within your budget, save up money, and one day you’ll be financially independent. Imagine having all those real estate properties we mentioned earlier!
The Impact of Saving - In Numbers
One of our favorite books on the subject, and a highly recommended read is Seven Dollar Millionaire’s Happy Ever After.*
It is an extremely easy read and does a fantastic job explaining financial concepts, dumbing them down as fairytale stories so you can read them to your children and educate them on financial basics.
The book presents the reader with a freedom formula which we will not butcher here and let you:
Money
Income
Saving
Spending
Investing
Owning
Now!
In the book, there are several illustrations. Some of the most impactful are how impactful the rate of saving is to reaching financial freedom:
Years you have to work based on how much you save
The book’s rough guide:
Saving 0% of your income will get you 0% freedom.
Saving 10% of your income could set you free by 80.
Saving 20% and you could be free by 62.
Saving 30% of your income and you could be free by 52.
Saving 40% of your income and you’ll be free by 44.
Saving 50% and well… well done you! You should be free by 30.
Some people do it in less than 10 years.
Another great resource for this topic is Michael Zuber’s Get Your Money Right course.*
*Note that we are not affiliated to the author and get nothing for recommending this book.
Plan Out A Budget
This is a key step for saving more than you spend.
As many financial gurus would tell you, you’re probably spending way more than you’re aware of.
To become aware, track your total expenditures for an entire month. We’re talking everything. Rent, gas, streaming services, coffee, and even that cute little muffin you got for a quick snack at work. Every single time you spend money, write it down.
We recommend tracking income and expenses on an Excel spreadsheet. It’s just the easiest way for most people. There’s a video on how to do this linked in the “Citations & Resources” section below. You can also jot it down in a journal or on your phone if you prefer that.
Now that you know how much you spend, you’re probably shocked. That’s okay. Because now you can fix it.
By now, you should have your total income and total expenses for an entire month figured out.
From this, create a budget. You can be super aggressive and try to save 50% of your income. Or you may enjoy some comforts and opt for 20%. Whatever you feel comfortable with saving works.
If you save more, your finances will be awesome but you will have to sacrifice. If you only save a little, then it’ll be longer until you can invest. It’s all up to you.
We personally use and like the Truebill app*. Not only is it great for budgeting purposes but it can also automatically negotiate the price of any subscription you have.
*Note that we are not affiliated to the developer and get nothing for recommending this app.
Tackle Your Debt
You’ve started savings more than you spend - and you’ve even managed to save up a thousand dollars in the bank.
Congrats! You’re doing great.
The next step is to eliminate any debt you have. It’s annoying and it also just weighs heavy on your mind.
Dave Ramsey would suggest attacking the debt from smallest to largest. This method allows you to see results and get rid of any interest as quickly as possible. It also snowballs nicely.
Prepare A Rainy Day Fund
Did you ever think you’d actually save money for a rainy day?
A rainy day fund is an account with 3-6 months of living expenses saved up.
This is incase you ever get sick and can’t work, need a break, want to shift career fields, or otherwise have an emergency in your life.
If an emergency were ever to occur, you know that you could go 3-6 months without doing a thing. And that will ease your mind substantially.
Invest
This is what you were waiting for, right?
Once you’ve reached this step, you’re in a great spot financially. You’ve learned how to budget and save. You’re debt free. And on top of that, you could live 3-6 months without working. Great job!
At this point, you want your money to make money for you. That’s how the wealthy do it - and so should you.
You can invest in stocks, crypto, whatever you want! But at Undoor, we recommend real estate.
That’s because real estate is the surest way to obtain passive income and build your wealth for retirement.
And we have tons of resources to help you make a killing with real estate. So if you’re interested in investing for your future, we’d love to help. Don’t hesitate to reach out!
How We Can Help You
Does investing in real estate sound intriguing to you? Would you like to learn more? We’d love to be of value!
At Undoor, we pride ourselves on teaching new and experienced investors how to maximize their gains with minimal stress. Our goal is to help you fall in love with real estate and real estate investing. What we’re most passionate about is maximizing investment gains for people like you.
Do you want to get key insights and advice that’ll help you get ahead of the game? Don’t hesitate to contact us for any and all real estate wants or needs.