Simple Changes To Quickly Improve Your Financial Situation
By Paul Esajian on February 16, 2018
We all want to make more money. If you are reading this there is no question that making money, and finances, are a big part of your life. As much as you may desire money the goal isn’t just to make money but to preserve it. Anyone can close a couple of deals and generate some revenue but if it is going out faster than it comes in you will ultimately be left disappointed.
The bottom line in any business is always the bottom line. It is not how much you make but rather how much you keep. In most cases the actions you take directly impact your finances. By tweaking your work ethic & daily habits you can quickly see a stark improvement in your financial situation. Here are five simple changes you can make if your finances are struggling.
- Find additional revenue streams. You can’t wait around for your real estate investing business to just pop. Investing can, and should, always be your primary focus but in the meantime, you should find other ways to make money. Real estate offers a handful of ways to earn income while still being in the business. You can start by getting your real estate license. Sure, getting licensed can be pricey and time consuming but if you can close just a few deals a year it will be worth it. You can also explore the idea of wholesaling deals, managing rental properties or working as a birddog for a hard money lender. Individually, these options probably won’t move the income needle too much but collectively they will have a real impact. If you want to change your finances the biggest thing you can do is find additional ways to earn income.
- Work every deal. The biggest thing that separates two investors in the same market is their ability to close similar deals. The average investor doesn’t follow up or isn’t creative in putting a deal together. The great investor knows what to say and how to say it and works to close every borderline deal they have. They never take no for an answer and exhaust every possible option. By closing just two extra deals a year you will see the impact in your bottom line. It can be frustrating working on deals that are constantly a dead end. However, just because the previous ten deals were a mess doesn’t mean the next one will be. You need to treat every new deal as an opportunity. Even if you can’t do anything with it you should be in constant communication with the seller and if possible refer them to someone who can help them. There is a way to gain value even from the deals you cannot do which will impact your business. Real estate investing is a numbers game in that the more deals you work on the greater chance you will find ones that end up closing.
- Monitor expenses. If you are struggling with your finances, you either have an income problem or a spending problem. If money is coming in and you are wondering why you don’t have as much as you should you need to look at your expenses. The word expenses almost automatically has a negative connotation. However, not all business expenses are bad ones. If the expense is used to help grow your business or provide you with leads it is a good expense. It is the expenses that do nothing for your business which need to be reduced, or eliminated. Look at the last 60 days of your business or personal checking account. Highlight every expense you make and see exactly what it is used for. There is a good chance that you can shave off at least 15% from the total amount. Starbucks coffee is great but at the end of the week you may be shocked at just how much you are spending. There are probably ten expenses such as that where you can trim the fat and improve your bottom line.
- Cheap vs. frugal. Just because you are making money doesn’t mean you have to spend it. Nobody wants to be labeled cheap but there is a difference between being cheap and being frugal. Cheap is not spending money on areas that you know you should. Frugal is finding better ways to spend the same amount of money. In your business there are probably a half dozen areas and expenses you can reduce today if you simply looked at it. Everything from your cable bill to how much you are spending on rental property lawn care can be reduced. Negotiating the best price on these items and saving a couple bucks is not being cheap, it is being smart and frugal.
- Think big picture. As a society, we are a nation of people that want everything immediately. We constantly look for instant satisfaction and gratification. When things don’t come as fast as we would like we are often left disappointed. If you are disappointed in your finances, it is important to consider the big picture. The investor from your favorite TV show is far from an overnight success. It most likely took them years to get to where they are today. They experienced the same struggle you may be going through right now. The difference is they continued to fight and look for ways to get out of their rut and earn income. If you think of where you want to be in 1, 3 or 5 years from now it can serve as motivation.
Most financial problems are temporary, if you don’t make them worse. If you are not where you want to be financially use these five tips to help quickly change your situation.