Did you choose to get into property investment for the potentially large amount of money that you can make?
Most people did – including me!
Money is something that we all need to survive. We use it to buy food, warmth and shelter but what happens when we have money left over once we have covered our basic needs?
What are you going to do with the money that you make from your property investment business? Have you thought about this? It took me a while to work out what I was going to do with the money that I made.
This is a strange situation when you think about it. You go into property investment to make a lot of money but you have no real clear idea what you will do with the money once you have it. If this is you then don’t worry – I will provide a number of ideas for you in this post so that you can make the right decision about your money.
1. What do you really want?
At the end of the day money is just pieces of paper or coins. It is never a good idea just to focus on amount of money to have in the bank. If you are not going to do anything with the money then it is all pretty pointless.
You need to decide what you really want in your life. Most people do not have a clue when you ask them this question. That might tell you that they want to be happy or that they want to cram as many things into their life as they can.
But what does that really mean?
The reason that most people cannot tell you what they want is because it takes effort to work this out. They need to think, which is far too much work for most people. As a reader of my freedom blog you are a cut above the rest. You are happy to put in the effort to make your freedom dreams come true.
To work out what you really want you need to think about the different aspects of your life and ask yourself the question “what do I really want?” You will need some quiet time to do this and a pen and paper. So put your phone on silent, switch off the TV and your computer and tell other members of your household that you do not want to be disturbed.
Here are some important life areas that you need to consider:
- Financial (business etc)
- Health and wellbeing
- Family and friends
- Skills and hobbies
- Giving and contribution
- Material things
- Learning and education
This is by no means an exhaustive list. Feel free to add to it. Once you have established your important life areas then ask yourself what you really want in each of these. Write everything down and do not concern yourself about how you are going to achieve these things at this stage.
If you find that your mind wanders when you are doing this, just refocus on the question. After a while you should have a number of different “desires” in the different areas of your life. Now you need to go over each of these and experience how they make you feel.
Look at each of your desires and imagine that you already have them in your life. How does that make you feel? Write this down and note the intensity of the feelings. The idea here is that you want to discover what you “really want”.
If your feelings are very intense and strong about a specific desire then this is something that you really want. Where the feelings were not so strong you can classify these as “nice to have”. This is important because these days people want things all of the time. But when they get them they are often disappointed.
Your inner feelings will tell you what you really want, so be guided by them. There are only likely to be a small number of desires that you uncovered that create the most intense feelings so these are the ones that you need to go for.
2. Set Goals around your Desires
If you do not already have challenging goals established then be sure to read my post on goal setting. Even if you have established goals, it is a good idea to check that they align with what you really want.
Goals are there to inspire you and drive you forward. If they are not aligned to what you really want in your life then you need to adjust them. Any challenging goal is going to test your resilience and motivation levels. So if they do not fit with your desires then you are going to have a tough time achieving them.
You need money to do most things in life. If you want to get in shape then you will need to invest in a gym membership and a personal trainer. If you want to acquire new skills then you need to invest in the best training and possibly a mentor. If you want to give some of your money to a worthy cause then you need to have the money in the first place.
So when you have created your goals (or checked that your current ones align with your desires) think about the amount of money that you will need to achieve them. Yes you can do some things for free and sometimes this is a good thing to do. But money usually speeds things up.
3. Specific Financial Goals
Are you in control of your money? Do you have credit card debt? You need to take a critical look at your money and how you manage it. If you do not keep a check on your spending then this is the best place to start.
You need to create a simple budget. Just use a spreadsheet to record your income and expenditure. Take a look back over your outgoings for the last couple of months by reviewing bank statements and credit card bills. What did you spend the money on? Was it really necessary?
You need to involve your partner and family in this too. They are not likely to take this very well but explain to them that you are looking at the bigger picture here. People often find that they are spending money on things that they do not use any more. Gym memberships and other monthly subscriptions that you no longer use are a classic example.
Think about your budget as the tool that you will use to build your wealth. It will provide you with the financial control that you need to make the right decisions. You need to prioritize everything and create a wealth building structure that will support you.
If you are in debt then you need a plan to get out of it. Paying credit card companies ridiculously high APR rates is not going to help with your wealth building. Make a commitment to pay off your credit cards over a specific period of time.
4. Make your Money work for you
There are a number of ways that you can make your money work for you. If you are not saving any money for your future now then I strongly recommend that you get in the habit of doing this.
From your budget determine how much you will save every month. Then determine where you will put that money. The safest thing to do is to put your money in a bank or building society savings account. But the interest rates are so low at the moment that you will not make much from this.
Talk to your financial advisor about other forms of investment. You have a lot of options here and some are riskier than others. Diversify your risk by investing in different opportunities.
I want you to make a lot of money with your property investment business but I urge you to take this advice seriously. There have been many successful property investors that have made a great deal of money and then lost it all very quickly. The one thing that I really want you to take away from this post is to make your money work for you. When you have money make it generate more money passively.