How to Achieve long-term Financial Independence as a Real Estate Agent?
I believe that all the people, especially real estate agents need to develop their financial system. Following efficient methods and strategies results in achieving long-term financial independence more easily. The plan is to have enough money to pay all your financial needs including your home mortgage, health insurance, income taxes, having a savings account, driving a nice car, going on vacation and also devoting a part of your income for your retirement. Though achieving all this doesn’t look easy, successful real estate agents can gain all of this and even more. In this article, I will help you to plan your salary in a way to become financially independent fast.
1. Increase Your Passive Income
Passive income is actually an amount of money you receive each month whether you work or not. I believe an agent is financially secured when his passive income exceeds his monthly expenses. The best way to have a good amount of passive income is to save during your better months and potentially invest secondary activities. After reaching your monthly target, instead of celebrating with throwing big parties or running for jewelry or brand-new cars, try to save more. I know it is not easy but after calculating your passive income amount at the end of the month, surely you follow the same path regularly, even with more enthusiasm and satisfaction.
2. Avoid Debt
Stress can cause lots of troubles, lead to disappointment and result in leaving your career abruptly. Being in debt makes stress. Debts make you distracted, causing you to miss opportunities and finally diminish your energy and effort. The best solution, especially during your first days, is to always think this way: if you can not pay for something in cash, it means that you can not afford it. So, don’t buy it! Avoid getting into debts and relying on your credit cards. If you want to get financially independent, pay off your debts as soon as possible and just plan according to your available cash. After it becomes your attitude, you become relieved.
3. Save Consistently
In order to gain luxury property deals, many agents think they need to live luxuriously to attract the attention and trust of property owners. I believe this is completely wrong unless you are closing deals that are so niche that they talk for themselves. You need to save consistently from the very beginning of your career. Let me give you a simple example of saving here: instead of paying $4 each day on your latte, you can prepare it from home and drink it on the way to your office! It is not easy for all the agents to follow this rule but the ones who do, they see the results undoubtedly.
Here are two of many reasons that real estate agents should consider:
A: Cash flow
Cash flow is the amount of money coming to your business after paying everything and everybody. It can be small or huge. Agents need to pay tax and interest like anybody else. If you own property as an investor or manager, you might consider refinancing on it This way you can save some money on interest and reinvest it somewhere else.
B: Controlled debt
Another strategy that can help you invest wisely is controlled debt. I explain it by giving you an example: imagine you buy a house and your tenant helps you to pay it off by paying the rent. You finally own the house without paying your debt yourself. So, although you were in debt, it was controlled from the beginning. This is why we call it controlled debt and I highly believe this kind of debt can help you on your path to financial independence.
There are many more strategies and methods of saving money and becoming an independent real estate agent. But by following the ones listed here, I assure you that you will become financially independent quickly. Being sure about your future well-being and that of your family helps increase your life satisfaction and the quality of your present life.
What do you think? Comment your ideas below.
For further study, you can also read the following articles as well: Top 29 Secrets to Become a Successful Real Estate Investor and Top 10 Strategies for Investing in Real Estate.
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