Match Investment Strategies With Your Goals

August 25th, 2020

People sometimes fail to meet their financial goals despite working hard all their lives. Others achieve remarkable investment success seemingly with little effort. What’s the difference? Why do some people build wealth while others struggle without getting anywhere? One of the keys is matching investment strategies with your goals. This won’t happen by itself. It takes planning and commitment. Nearly everyone is capable of becoming financially successful. The path to building wealth begins here.


Ensure Personal Financial Security First


You should only invest when you already have money reserved in savings for your personal financial security. Experts say that you should strive to have between three and six months of living expenses saved up. That money should stay liquid so it’s ready to use if you need it. The nest egg is there to pay for emergency expenses, not investments. This should always be your first step when implementing investment strategies. If your investments don’t pan out the way you’d hoped, you can rest assured that you and your family are still financially secure. 


Sit Down and Figure Out Your Goals


The next step is to determine your future goals. If you’re with a spouse or life partner, you should be doing this step with that person. Both of you should work toward common goals for maximum efficiency. You’re also going to want to consider your personal goals in concert with your financial goals, because the two are nearly always intertwined. For example, if one of your personal goals is to own a villa in the South of France, you’ll need to work your finances in order to achieve that goal. Make a list of your personal and financial goals and be as specific as possible. “Invest $75,000 in turnkey rentals by the second quarter of 2021” is better than “buy turnkey rentals.” Your personal goals may seem more vague, but if you really are serious about reaching them, you should be specific with them, too. “Retire in France” sounds amazing, but “Have X amount of money in passive income by 20__” is better. 


Determine What You Can Afford to Invest In


Now for the real eye opener. If you only have less than $20,000 to invest, you’ll need to save up more before diving in. But that’s okay. Everyone starts somewhere. Keep saving and while you’re waiting for your investment money to grow, spend your time wisely by learning as much as you can about real estate investing. If you have between $20k and $50k to invest, you won’t be buying that French villa just yet. You won’t even be buying an apartment building in Jersey. But you can start buying one or two turnkey rentals to get your real estate portfolio going. This will start bringing you some passive income each month and give you a taste of being a turnkey rental property owner. If you have between $50k and $100k, you can buy more turnkey rentals, flip a property yourself or do a BRRRR project. If you have $100k plus, you could do any of the investment strategies already mentioned, or you could even get into that apartment building in Jersey (or not). The point is, you basically have more options. More money equals more options and more freedom. 


Match Returns With Goals


Each type of investment is suited toward a particular kind of goal. If your goal is to increase your passive income, then you should be focusing on finding investments with positive cash flow, like our turnkey rentals. If your goal is to make a ton of money in a lump sum, then you might want to consider flipping a house. If your goal is long-term and you just want your money to grow passively, then you should be focusing on ROI (return on investment). Choose an investment strategy that aligns with your goals. And, every so often, review your goals and strategies to make sure they are still aligned. 


Things to Remember


Whenever you’re investing, you need to remember a few things to keep your investments sound:


Don’t Get In Over Your Head


Always start out slow. Real estate investment opportunities will always be available. You don’t have to rush things or worry about others “scooping up” all the good deals. When you’re ready, there will be deals for you to leverage.


Educate Yourself First


Don’t rely on others telling you things. Vet everyone and question everything. Ask lots of questions and then verify the answers with your own research. Check out customer testimonials and ask for client referrals whenever seriously considering working with someone. 


Take Action


Don’t miss out on opportunities out of fear. At some point, you need to take action on your plan. Once you are well-educated and have a sufficient amount of money, dive in. 


Investing in real estate isn’t only one of the most lucrative ways to build wealth; it’s also very fun and exciting. Nothing feels better than to be able to say that you’re a rental property owner. It’s a real, tangible asset that almost always appreciates in value, can offer positive cash flow and is something you can pass on to your heirs. As long as you match your investment strategies with your goals, chances are very high that you’ll be able to attain all your goals.


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