Getting started as an investor in real estate is exciting and full of opportunities. However, a wise investor should also understand that there are risks in investing. One of the many reasons why newcomers in real estate investment fail is that they lack the ability to analyze various factors and situations.
One important factor to consider when starting to invest is to Identify Your Financial Stage and Your Capabilities. After all, investing is all about making a smart move to help you earn more money.
To start investing, Real Estate IQ together with Luke Watkins started a webinar series dedicated to beginners in real estate to help them become successful.
If you are planning to pursue investment in real estate, you should take a look at this first step that you need to understand:
Step 1: Identify Your Financial Stage and Understand Your Capabilities
You have to identify your financial stage before starting to invest. Your financial stage will help you make a smart dedication when investing. What’s good about identifying your financial stage is that it helps you see in which stage you want to go next. This is like a map of your progress in life as an individual.
a. Survival Stage - Survival stage is where you are living from paycheck-to-paycheck. You can manage to pay your bills and sustain enough money for your food and some luxury. This is the stage where starting in investing can be challenging since you have to work hard to get capital for your investment.
b. Stability Stage - This is the stage where you can save a little bit more money. You have a stable inflow of money and you can manage to pay your bills even for the next three months. Starting to invest at this stage can help you since you have more money to support your investment.
c. Saver Stage - This is the stage where you can manage to save your money for business, investment, retirement or for other reasons. This is the stage where it’s very ideal to use your money to generate profits for you.
d. Growth Stage - Growth stage is where you can manage to use your money to grow. You are more likely to have an existing investment or business to help you handle your finances. Being in the growth stage allows you to have a lot of options to invest in real estate.
e. Financial Freedom - This is the peak of all stages that all investors want to achieve. In this stage, your income can exceed your expenses.
Now that you have an idea on how to identify your financial stage, you can now manage to decide how to approach your next move as an investor. To easily decide your strategy, you will also need to assess yourself and understand your capabilities. Here are some useful guidelines to help you:
a. What are you good at?
- Understanding which set of skills you are good at can help you to follow various strategies to help your business grow. You should capitalize on your skills like communication, analysis and other skills to easily pursue your goal.
b. What do you like to do?
- Understanding what you’d like to do can help you make better decisions as an investor. More importantly, you will feel more enthusiastic about what you are doing if that is something that you really like, may it be through networking or making sales.
c. What are your strengths?
- Your strengths will help you determine how to assess in which strategy or situation you can excel. Knowing your strengths can also give you a lot more confidence to continue what you are doing.
d. What are your weaknesses?
Knowing your weakness is very vital to help you understand in which area should you avoid and how you want to improve it. A wise investor should learn how to use their weakness as their own strength to surpass beyond their limits.
e. What do you need?
- Understanding what you need as an investor will help you make wise decisions. Your needs as an investor should coincide with how you do your business to make sure that you can reach your goals.
f. What do you want?
- Knowing what you want is more of knowing how you want to approach your goal. If a certain strategy is what you want to do, it can help you approach it with more ease and confidence.
Now that you know how to identify your financial stage and capabilities, you are now ready to take your next step to be an investor. Understanding the two concepts will help you not lose your footing. This will help you know which approach, strategies, and decisions can work best for you to help you secure your success.
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