Ms. Financial Literacy

Money Habits of a Spender

I Am a Spender

If I have unlimited access to money, I would be doing a lot of shopping—from picking up a croissant (and a scone and a brioche and a slice of bread pudding) at a bakery to browsing on the web to purchasing flight tickets (and fancy lodging) for my next vacation to shopping wardrobe items for my daughter and husband (and my next designer bag). I would be purchasing beautiful furniture pieces (and other home décor items) and putting an offer on our next house (and vacation home).

money habits of a spender

However, I don’t shop just to shop. Shopping in generally (even just the thought of it) is both physically and mentally exhausting for me. When I shop, I shop with a purpose—I shop for the experience (what I can enjoy immediately and what I can enjoy weeks, months and years down the road) and a lifestyle. Emotions draw me in. Show me something pretty or something that smells good (hello, fresh baked goods!), and the money in my wallet is already half way out.

With the combined incomes in my household, I can afford to buy lots of things and services. Yet, if you look at my credit card and checking account statements, I don’t spend much money relative to the income. This is especially true in the past four years. How have I been able to resist the strong urge to spend money during my adult years thus far?

Spread the message. Encourage others to begin their financial learning!

Real Estate Investing

Building Your Team: Real Estate Agent

One of the first things I learned about real estate investing is having a business plan. In a previous article, I wrote about narrowing down on niches and strategies. Today, I’m sharing another component of the business plan—building your team. More specifically, this post is on finding a real estate agent (your realtor).

real estate agent

Your Working Relationship with a Real Estate Agent

Having a real estate agent who goes above and beyond to represent and advocate for you can greatly affect your investing experience. This is especially true if you are doing out-of-state investing (as it is the case for my husband and I). You should expect much more from your realtor than just getting you set up on auto searches, providing you comparisons and signing the necessary documents. If you aren’t familiar with the landlord/tenant laws in the area you’re looking to invest in, turn to your realtor for insights and resources. If your realtor happens to live in the same area or neighborhood you are doing your searches, ask them questions about growth (e.g., jobs in the area and area amenities), ease of commute and rental potentials. In other words, turn to them as your resource guide.

Spread the message. Encourage others to begin their financial learning!

Real Estate Investing

Using the 50% and 1% Screening Rules to Quickly Sift Through Real Estate Potential Deals

Rules of Thumb

In an older article, I wrote extensively sharing my views on conventional financial rules of thumb. In general, these rules are shortcuts allowing you to quickly analyze a situation (with an anchoring point) and determine if that particular situation merits further consideration. They should not replace the need to do research, do math, or evaluate if a short-term financial decision aligns with your long-term financial goals.

As I started learning about real estate investing, it turns out that many real estate investors use a number of rules of thumb to help them narrow down the number of potential deals and determine which ones they should spend more of their time focusing on. To give you an idea, the numbers showing up on our auto searches for one county are 182 (2 bedroom single family homes), 315 (3 bedroom sfh), 48 (4+ bedroom sfh) and 31 (small multifamily properties). That’s a lot of potential properties to go through! As our time is a limited resource, we will spend it on potential deals that can bring in the most profits. In addition, with the ‘buy & hold’ strategy, even putting 20% down on the cost of a property can be a lot of money. Thus, my husband and I definitely want to do our due diligence. During my research, such a process is very time and labor intensive.

In this article, I’m sharing two rules of thumb real estate investors use to sift through hundreds of potential deals. Just like other conventional financial rules of thumb, these guidelines are not “rules” per se. We use them only as screening rules to help us narrow (filter) our search. Even if a property meets one or both of these rules, it doesn’t mean we hurry to make an offer. This simply means that particular property merits further consideration (I’m currently learning about the more advanced and detailed strategies, and will be sharing them on the blog soon).

As aforementioned (and stated in the previous article), my husband and I are only interested in the buy & hold strategy at this point. So the focus here is on screening rules for investors who use the buy & hold strategy to build wealth.

The 50% Rule

Spread the message. Encourage others to begin their financial learning!

Financial Planning, Investment, Real Estate Investing

Real Estate Niches and Strategies

Year 2016 was a year full of financial learning for both my husband and I. Early this year, we learned the importance of financial planning (which I talked about in this article). Towards the close of the year, we learned about the importance of having a business plan when investing in real estate. Part of getting started on real estate investing is to first decide on a niche (or two) to get into and which strategy to use to build wealth.

real estate niches and strategies

Real Estate Niches

When I started researching on real estate investing, I was only interested in single family homes. I was aware of other investors buying up small and large apartments, commercial real estates and notes (the buying and selling of paper mortgages). However, my husband and I never paid much attention to those kinds of real estate investing. These types are only for investors who have lots of money. Even if we have the cash or leverage (securing loans), my husband and I aren’t interested in venturing into that kind of large scale risks or work. We’re looking for something much smaller in scale and more manageable. As I wrote in the previous article, we aren’t looking to become multimillionaires through real estate investing. We are interested in portfolio diversification and additional stable monthly cash flow.

Small Multifamily Properties and Their Appeal To Us

Spread the message. Encourage others to begin their financial learning!

Financial Planning, Investment, Real Estate Investing

Real Estate Investing: Building Our Monthly Cash Flow and Passive Income

In the upcoming year, on this blog you’ll be seeing many articles on real estate investments. It’s a new investment area my husband and I are planning to venture into. There are some things we already know about this asset allocation, but we have a lot to learn, too. We plan to share our research and adventures with you along the way. If real estate investments are in your horizon either now or in the near future, we hope this series will be useful to you as well. Through rental property investing, our goal is to build our monthly cash flow while increasing our passive income.

cash flow passive income

Passive Income

Spread the message. Encourage others to begin their financial learning!