How to Apply Financial Planning Wisdom to Real Estate Investment

Posted by Chris Clothier on Fri, Dec 21, 2018

financialplanning-realestateinvestors-financialfutureWe all want to secure our retirement. After all, if you’re here you are no doubt in the market for some sort of security for your financial future. If that’s the case, you have to arm yourself with more than just some real estate investing know-how. While beginning to understand the wild west that is real estate is part of your success, another huge piece of the puzzle comes down to your financial savvy.

Financial planning plays a critical role in how you manage, plan, and prioritize the wealth that you accumulate through your investments.

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While it is always wise to get the advice of a CPA or other professional to help you navigate your finances, it’s wiser still to begin to understand some of the core principles of financial planning and how they can relate to and guide your investment career and investment goals and decisions along the way.

Learning these principles for yourself, combined with professional guidance, can help you make the most informed, educated decision for wealth-building.


3 Ways to Apply Financial Planning Wisdom to Real Estate Investment

Trust your numbers, trust the results.

Financial planners are numbers people. They know good data when they see it. They are all about looking at portfolios, seeing money, data, and carefully plotting what is a smart allocation of your resources. What is too risky? What is a smart investment? How should you achieve your financial goals? What is the best strategy? These are some of the questions asked, then answered.

One thing you must remember as a real estate investor is the value in the numbers and in the results. In this business, it can be easy to be swayed by a lot of promises and a lot of conjecture. We inhabit a space where things are more real than in other investments. It’s not stocks, where things can rise and fall by the whim of so many incomprehensible factors that it seems random, or by something that we can’t see or touch.

Real estate is real. Tangible. That makes us feel safe. Secure.

But there is a danger in allowing the reality of real estate to make us feel as though we are unstoppable and as if our assets are always locked down. We can let our guard down. We can forget the liabilities at play.

A financial planner always trusts the numbers when the numbers are right. Don’t feel complacent in real estate investment just because it’s real estate. Be diligent. Protect your assets. Do your due diligence. Mitigate your risk.

Put your faith in proven methods, proven results, and proven people. Nothing less.

Related Article: Top Financial Strategies to Go from Property Owner to Real Estate Mogul

Reevaluate your trajectory.

Financial planners aren’t of the mindset that a portfolio is set in stone. They reevaluate and revisit their goals, the investments within the portfolio, and the performance therein to ensure that everything is moving in the right direction.

For the passive real estate investor, particularly one who is busy or looking for a more “hands-off” approach to investing, it can be all-too-easy to let time slip by you. Have the mindset of a financial planner. Work with your adviser to ensure that your investments are in sync with your financial goals and desires. You must work towards portfolio growth. Remember: you want to approach and accomplish specific financial goals.

This can’t happen without their active pursuit and it is an area where you can’t afford to be passive. 

Always look ahead.

One of the biggest takeaways for real estate investors is in the name: financial planning. Plan. Don’t underestimate the ability of the future to motivate you. In fact, it can be one of the most compelling motivators there is. Too many investors fail to plan ahead because they prefer to think and live in the moment and worry only about their finances for the present.

However, if you stay future-minded: whether it is a goal for the next five years, or ten, or twenty: you will find that this target helps you stay on track and moving forward. You will find yourself feeling better prepared and more secure knowing that you are building towards a larger, overarching goal, even as you adjust to meet other goals along the way.

Planning for your financial future can be daunting, but it often starts simply with figuring out how you will provide for that future.

Diligence here is key. It is not simply enough to begin investing in something—but rather, determining what investment method suits your goals and lifestyle, and having the forethought and follow-through to plan and secure your financial future.

The best news? You don’t have to navigate real estate investment alone. Our team of experts is waiting to partner with you.

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Topics: financial planning, Retirement planning