Three Simple Steps to Real Estate Wealth

If you're new to a real estate investment career, you may wonder, "What's the best way to build wealth?" The answer is that there are several ways to do it. However, in this article, I'm going to concentrate on only onethe net worth model. If you'd like to read about all the models, I recommend buying Gary Keller's book, The Millionaire Real Estate Investor. It presents an excellent approach to building wealth as an investor.

As you'll see, the net worth model is an effective approach to investment because it's low risk and implementing it involves not "re-inventing the wheel!"

A Simple IdeaCopy Successful Strategies!

Why flounder about trying to figure out your real estate career path when you can analyze what successful real estate investors and use their proven strategies? It's an effective and efficient method of getting on the path to a great investment career.

All you need to do is to look at investors who've made fortunes in real estate, study what they do, and then implement their strategies. They've already done the work for you, bless their financial hearts!

Different investors use different models to achieve their financial objectives. The only problem you have is to choose the model that best fits your circumstances!

The Net Worth Model

Net worth is your worth in financial terms. The basis of the model is assets minus liabilities. It's a proven system for increasing net worth over time, and it has three steps:

Know the flow your money.

Budget, budget, budget.

Track and measure your net worth.

Let's look at these steps in more detail.

Step 1: Know the flow of your money

This is a simple but powerful concept. If you don't know where your money is going, two things occur. First, you end up wasting it on disposable items that take valuable investment money out of your account. Second, you end up not directing important monies into important real estate investments.

When you know the flow of money, you can direct that money into real estate investments that will eventually turn a trickle of income into a flood of wealth. Of course, in order to create wealth, you have to have money in the first place, and there are only two ways to do that: Earn it by working or receive it from assets.

Most of us aren't fortunate enough to start out with a considerable amount of assets. So, we have to work hard and use that earned money to acquire those assets. With the money you earn from working, you have four choices:

You spend it, which leaves you nothing to invest.

You save it, which is safe but not dynamic in terms of growing wealth.

You donate it, which is a good thing to do once you've accumulated wealth.

Or, you can grow it through investmentthe obvious best choice for creating a solid financial future for yourself and your family.

In order to grow your real estate investments, you need to start with the simple next step. Step 2: Budget, budget, budget! Yeah, I know, budgeting is a boring and obvious step, but it's so important to your success. And here's some proof to convince you. To write his book, The Millionaire Real Estate Investor, Gary Keller interviewed millionaires for the secrets of their success. Guess what? Every last one of them had personal budgets!

So, as I said above, do as millionaires do: create and maintain a personal budget. Always plan for the future; in other words, don't spend today; save for tomorrow!

Step 3: Keep track of your personal net worth with a balance sheet A balance sheet is a proven method for keeping track of your progress (or lack of it) toward your financial goals. A balance sheet lists your assets, your liabilities, and net worth on a regular basis (weekly, monthly, quarterly, etc.). It's an instant snapshot of your financial condition, and it tells you what you need to do in order to increase investment monies or fix problems that are costing you money.

Pretty fundamental, huh? But, remember fundamentals are what count most in success. Just as athletes practice fundamental skills over and over again to achieve professional excellence, you need to do the same in order to build a secure financial future for yourself and your family!

Key Point: Learn and practice investment fundamentals; it's the proven and low-risk way to create a profitable real estate career!

Jack Sternberg