Many people who get into real estate investing are looking to it as a way of replacing their current 9 to 5 job. The common thing heard is "I need to reach the point where it pays me the same as my current salary." Anyone can dabble in real estate investing and hope to make some money. But actually doing well enough to quit your job and become a full time real estate heavyweight, that requires work, dedication, and a PLAN. Let's look at how to start forming your plan of escape. Remember, if you skip this part, you probably won't make as effective use of your real estate knowledge as you could.
The first thing you should do is determine how much money per month you absolutely must have to live on. This doesn't mean "what I'd like to have so I can take an extra golf trip." No, this is NEEDS only. This means making a budget and sticking to it, something that is VERY hard for many people. Don't skip this step, as it shows you where to start placing your goals.
Speaking of goals, the next thing you need to do is to write out a plan of what you want your life to look like in the future. I'm not referring to your retirement years, that comes later. I mean between one and five years from now. After all, if you don't have a clear goal in mind when you start, how can you ever reach it?
Next, get a handle on your spending and debt. Look through the budget you made above. What do your spending patterns say about you? If you have a large amount of debt or spend a lot of your cash on non essentials, you may not know how to work with money well and are going to have to make a few sacrifices. Learning how to make money work for you is critical if you plan on quitting your job and becoming financially independent. When you have lots of debt, it is holding you hostage.
When you start getting more income from your investments, fight the temptation to grow your spending. Lots of people, if they get an increase of, say, $5000 in salary, will simply up their spending by the same amount. This will put you no closer to being able to quit your job! Instead, use it to pay down and get rid of whatever debt you have.
These are just the beginning steps you need to take. The road from being chained to your job to being able to quit that job requires more work and planning. It will require you to make sacrifices and learn about how to make money work for you. There are no shortcuts. But for those who are looking to ‘fire their bosses' and become real estate heavyweights the rewards are well worth the effort.
This article is based a chapter of book Be a Real Estate Heavyweight, entitled One Year Job Elimination Plan by Steve Cook. For more information on the book, be sure to check out www.RealEstateHeavyweight.com.
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