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rp

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Posts: 26
Reply with quote  #1 
I have a theory.  

I love real estate investing.  I love everything about it... finding a property, using a bank's money to buy it, letting someone else pay off the loan, the customer service aspect of the work, etc.  I even enjoy the home repair/ maintenance work, and this is weird, I actually enjoy the paperwork that comes with buying a property.  

I enjoy real estate investing way better then throwing money at market based investments or savings accts.  I was never good at saving money.  I'm not an undisciplined, extravagant, big spender... I am very responsible ... just bad at building savings, and not touching it.  (When I do save money, it's only to be able to buy another property.) ***

I am however, really, really good at paying bills.  In my 52 years, I have never, ever, paid any bill late.  True!  

My theory... is that I'm not alone.  I think that, generally, us real estate investors are good at paying our bills (and there are alot of them in real estate).  But.. we are bad at saving money.  

In fact, I think that if you are a saver, you may not have the "grit" to do real estate.  I mean... are you going to feel pain, having to pull all that hard earned money (10-20% down payment) from your beloved savings acct to plunk down on some property?

So... if you are thinking about going into real estate, are you a saver or a bill payer?

Let me know about the theory!

-RP

***Disclaimer:  I'm not advocating you don't have any savings. Having savings is an important part of your investment plan.  At a minimum, you should always have on hand cash available to pay all of your bills for at least 3-4 months of 0 income.   I call it a "reserve acct".  
BritneyR

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Posts: 227
Reply with quote  #2 

Saving money and timely bill payment are both equally important.


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OHlandlord

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Posts: 3,734
Reply with quote  #3 
These aren't mutually exclusive.  One can be good at paying bills AND saving money.  Likewise, I know landlords who can't seem to save a dime or pay a bill on time.  [biggrin]
BritneyR

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Posts: 227
Reply with quote  #4 

Couldn’t agree more OHlandlord.


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rp

Registered:
Posts: 26
Reply with quote  #5 

Great points! Thanks for having fun with me on this one. :-)

So OK- Above footnote section of theory updated to:
1. You should always have enough cash on hand (liquidity) to pay all of your bills for at least 3-4 months of 0 income
2. Saving money and timely bill payment are both equally important and not mutually exclusive.
3. You're investment portfolio should include a wide array of investments (i.e. Don't put all you eggs in one basket)

Theory refined:
1. Generally, real estate investors value income generating investments over market based (i.e. "Wall Street") investments.
2. Income generating investments usually requiring BUYING something (i.e. real estate, a business, something that produces royalties/ licensing fees, etc).
3. Market based investments usually involve SAVING money (i.e. in an account which accumulates interest or growth capitalization.)
4. People who are good at SAVING have a harder time SPENDING and are therefore less apt to BUY income producing real estate.
5. People who are good at BUYING have a harder time SAVING and are therefore less apt to put  (i.e. SAVE) money into market based portfolios.

 

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