Personal Finance

[Orb]

This is such an overlooked aspect of life, like Jesus christ NO ONE in my family has even mentioned this to me, I was at a library today and stumbled upon a finance book and I was like woah mastering this can change everything.

 

So I'm feeling inspired to learn personal finances.

 

A big lesson on being an entrepreneur is that the first business you will ever build is you! Your own personal business involves learning how to handle your own finances, how to put food in your belly, etc. Then you can build another business. 

 

Feel free to share anything related to this subject.

[Blessed2]

Have you read Rich Dad, Poor Dad?

[Orb]

5 hours ago, Blessed2 said:

Have you read Rich Dad, Poor Dad?

Ive heard about that book a lot, I haven't read it though.

[Mandy]

Building your cushion/emergency fund is the most important piece starting out. Shoot for around 6 months of living expenses saved. That account is not your spending money, it's your emergency fund. The balance needs to stay high. If it goes down, your priority is to get it back to what it was. Use the snowball method to pay of debts as fast as you can, make it a game. I had to pay a lot for a car unexpectedly last year and almost everything I make that I can put on it goes on it. Once that is paid off, then I have an extra $470 a month to work with and I've already saved thousands in interest. 

 

Know that interest is more costly than you might believe or want to think. Do the math and figure out what you're paying if the loan doesn't show you up front like many websites now do thankfully.  It's APR, (annual percentage rate)so you don't just pay 7% of whatever your loan, you pay 7% every single year. If you're buying an asset, you can use loans for leverage in many cases, but if you're buying a vehicle, or paying interest on credit card debt, not so much. 

[Phil]

One of the best finance strategies I’ve experienced is in real estate and utilizing county & state first time home buyers programs and then parlaying the proceeds into more profitable investments.

 

As a first time home buyer, bought a 50k house (long time ago)… out of pocket down payment & closing costs was about 5% / 3k (first time homebuyer). 

From county & state programs I received 45k in reimbursements for work down to the house (was deemed a ‘hud’ house / needed a lot of work) which I did myself except for cement work which cost about 10k.

In a few years I sold the house for about 80k. Paid off 50k mortgage, netted 30k from the sale in addition to the 45k of reimbursements from the state & county programs. 

 

Then (the parlaying aspect) I rolled that net of about 75k into a new construction house of around 200k. Then rented that house out and bought another house. Then saved the rent money up alongside income and used it as a down payment for another rental house. Did the same thing over & over with rent money as down payments for a while for years with more & more rentals, airbnb / vrbo and that initial 3k outlay is now over a million dollars in cash & equity. 

 

With you working in real estate I thought that one might be worthwhile to hear. You wouldn’t even have to pay a realtor.