Achieve Financial Freedom in 2018 - Find Out How!
How do you define success in property investment? A steady income? Long-term capital growth? Achieving financial freedom?
Many property entrepreneurs at the start of their investment journey have failed to ask themselves this vital question: What do you consider to be a successful outcome? This is a big mistake because you’re going to need motivation along the way. Knowing that you are gradually getting closer to your defined goal gives you the encouragement you need to persevere.
Here are a few tips to help you achieve your vision of financial freedom in 2018.
Create your business plan
Once you’ve defined your idea of success, your next step is to create a well thought out business plan – the how and why of what you’re going to achieve.
We use a business plan on our mentorship programme that covers the next five years but this can be broken down into bite-sized chunks. For instance, if you’re not sure of exactly where you want to get to, you can begin with a simple S.W.O.T. analysis.
- Strengths: What are your strengths and the strengths of your proposal?
- Weaknesses: What are your weaknesses and those of your proposal? (i.e. what could go wrong?)
- Opportunities: What is the opportunity you see? What is your USP (Unique Selling Point)?
- Threats: What potential threats could impact on the success of your enterprise?
Review your income and expenditure
Every property investor needs to control their expenses when they’re starting their business. Even if you are already a successful business person or have a high-paid job, don’t compare your current income with what you want to achieve from property investment.
First look at your expenses – can you reduce them in any way? Are they essential or just nice to have?
This is key if you want to change your current situation. You need to establish what your true financial freedom figure is.
Financial freedom = Passive income less expenses > £0
Passive income in this context is the income from your property. When it exceeds your living expenses, you could regard this as having achieved financial freedom. You then have choices. You can decide whether to work or not work, quit or stay in your job.
Remember, what you want to ultimately receive in income from your property may not be the same as your financial freedom figure.
Manage your debts
Unless you have a significant amount of cash to start your property business, you’ll need to borrow. Therefore, it’s essential to monitor your credit score. You can easily check this by using one of the credit reference agencies used by banks and lenders such as Experian.
Some credit reference agencies offer subscription services while others provide a free service. It’s worth monitoring your score as this will affect your ability to obtain lending.
You should also know the difference between good and bad debt. Good debt puts money in your pocket, such as a buy-to-let mortgage. Your rental income will pay this debt. Bad debt takes money out of your pocket, for example, credit cards, car loan, mortgage on your home.
The main thing to remember about borrowing is this: Never borrow to spend – only borrow to invest.
Want to learn more about property investment from our property mentors?
Look out for the next PMA Mentoring Programme; we’ll be running one in Jan/Feb 2018.
Our property investment strategies are designed to equip you with everything you need to get out there and make your mark in the world of property.
Join our Facebook Group to ask property questions, share knowledge, vent frustrations – and, you never know, it could also lead you to potentially lucrative deals.