Each geographic area has its own unique dynamic, its own zoning regulations and its own distinctive resident, so it’s a good idea to focus on one particular area.As you become an expert in one investment area, you will be more apt to learn another area quickly. You will make mistakes, so make them early on, with low-risk, low-end properties in which there isn’t as much at stake for you.
It is not only the fastest method, but is also the easiest, because it means other people’s money, time, and energy are working for you.
If you’re like most people, your financial report card reveals that zero percent of your income is passive. Remember that your goals are dependent on what you’re willing to do to make them happen.
Your assets, as you’ll recall, are the things that generate wealth for you, such as investments, savings accounts, stocks, 401(k) plans, mutual funds, real estate, or a business that you own.
Your liabilities are all the things that take money away from you, which might include your credit cards, the remaining balance on your car loan, or the mortgage on your home.
The income statement will show you your monthly financial activity.
Next, you’ll create a balance sheet, which lists your assets and liabilities.You’ll see where your debt is concentrated or how to pay it down, and you might see where you could bolster your asset column.(Here’s a list of 29 small business financial resources.)It may lead you to form a plan to decrease expenses or increase income.One final point about why it’s a good idea to stick to the same game plan when you’re investing in real estate: When you assemble your team of advisors, one of them will be your real estate agent.He or she will be an expert in one particular sector—the one you’re investing in—but most likely won’t be an expert in other sectors.The only real way to significantly improve your income will be to increase your passive or portfolio income.Passive income is the suggested method for growing wealth.Beyond that, you have other decisions to make: What kind of properties you’ll invest in, where, and what to do with them. Are you looking for properties nearby in your town, in a neighboring town, in another state, near water, urban, rural? You could: The Rich Dad strategy is buying and renting, which maximizes short- and long-term income potential.The following are your numerous real estate options: Each of these has its own choices as well—apartment complexes vary in size, so are you interested in 20-unit complexes, 100, or more? Because the real estate world offers so many options, it’s a good idea to focus on a particular area of specialization.Start creating your financial statement by developing an income statement that lists your monthly income and expenses.Most of us are checkbook-driven; we put our paychecks into our checking accounts, pay bills with that income throughout the month, and, if we’re lucky, we have enough income each month to pay those bills.