Get in the Flow
Making Your Money Work for You
There’s a preconceived notion about money that too often takes people from payout to broke in no time flat. If you’re living paycheck-to-paycheck, you’re not operating in the velocity of money. And even if you’ve done a successful property flip, wholesale deal, or broker transaction but become immediately stressed because the money you made disappeared faster than you could find your next deal or transaction, then you might be operating against the flow of money.
But how do you get into money’s “flow” so it starts to work FOR you and not against you?
It’s all about the financial current.
If you ever went to church camp as a kid or attended Sunday school, you may recognize these lyrics from the old Malvina Reynolds’ song “Magic Penny”:
“Love is something if you give it away,
You end up having more.
It’s just like a magic penny,
Hold it tight and you won’t have any.
Lend it, spend it, and you’ll have so many
They’ll roll all over the floor.”
The principle of the Money Flow is so universal that it expands to the reach of children’s songs, yet we just because something is common knowledge doesn’t mean it’s common practice.
What is Money Flow?
Having money and having an income are two different things. Currency is a current, and we want to make sure the current is flowing to us and not away from us.
You’re always going to have money going out; bills, lifestyle, etc. These are the “waters” you won’t get back. But if you don’t funnel some of the “waters” back into your flow (invest), then your river will dry up.
Spend all your money on expenses and liabilities and you can’t set up ways to make residual income, let alone passive income.
How Can You Get in the Money Flow?
When you have money, even if it’s the smallest portion possible, you need to reinvest. Money will not come back to you if it stops at an expense. So, even if you only have $50 left over after you’ve paid your bills and fed your family, if you take that $50 bill and buy yourself a new t-shirt and a ball cap, the buck stops there. Literally. But if you invest that small amount into a CRM system to help you manage your leads and be more efficient with your time, then you’ve multiplied those funds by creating more opportunity for income.
The same is true for those who close on a deal where they made 40, 50, or even $60,000 on a property flip. If you see that at 100% spendable profit, then you’re looking at it all wrong and your business won’t be sustainable. You should predetermine what percentage of your anticipated net income on any transaction and use it to scale your real estate business. Otherwise, you’ll be stuck painstakingly chasing one good deal after the other instead of getting to a place in your area where people know you as the go-to real estate investor.
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Keep your money moving and working for you, especially if you get a big chunk of it. Invest back into your business and into yourself. The moment you stop investing your time, efforts, and finances into growth, that’s when the Money Flow stops.
And “saving” the money doesn’t do you as much good, either. Reread the lyrics above. If you hold on tight to your pennies, you have a just those pennies (okay, if you put them in the bank, you could get a whopping 1.5% return, but please don’t think that’s going to help you retire). Saving money isn’t investing. It’s taking the money you have now and SAVING it for the future to spend on disposable things. But it gets spent eventually.
Track your income and your expenses, determine your desired worth and how much you’ll need to invest to get there. It doesn’t happen right away, but the sooner you work toward your bold money goals, the sooner you’ll reach them. Just don’t let shortsighted financial decisions derail you. Lower your operating costs if you must (both in business and in your daily drive thru run), but never cut back on your smart investing.
If you’re ready to start investing wisely in your real estate career but don’t know where to start, visit FundingTour.com for information on the next Funding Tour in your area. Others are taking action toward their financial future, securing private money financing for properties, and getting in the Motion of Money.
Are you going with the right flow?
I’ll see you there;
To Your Success;
Lee A. Arnold
The Lee Arnold System of Real Estate Investing
Follow me on Twitter: @CogoCapital and @LeeArnoldSystem
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