Knowing Your Numbers
This blog post is repurposed from an IG LIVE found on @MahekSV.Official.
I posted a story on Instagram about knowing your numbers and how to figure out what numbers to put on your real estate investing, and I realized that I was kind of vague and should give you guys a little bit more detail.
I've been talking to a lot of people recently and asking them what their numbers are, and everyone I get to answer is often $10,000! They say things like once I start making $10,000 a month in real estate I know that'll be time to go full-time or that's what I would be happy with or my first goal is to start making that 10,000 number!
Why $10,000? Where is it coming from?
Those people often say “Well, it feels like a good number!” and as much as I love that and I'm happy that everyone has great investment goals, I think it's really important to understand where your numbers are coming from.
Anyone can work any job and make $10,000 a month, so why real estate? Why is that different?
It's important to know your numbers and also the why behind them.
For example, how do you want to live your day-to-day life? You may decide that you want to spend time with your family, you want to take more vacations, travel with your partner, or you may just want to be able to go shopping more! Whatever that lifestyle is that you want to live, you have to understand the finances that go along with that.
If you want to be able to travel all the time, what is your schedule? What is your day-to-day going to look like? Are there some weeks where you need to pile on more work so that you can have a completely relaxing vacation, or do you prefer working part-time and traveling part-time?
If you want to live your life so that you're spending a lot of time with friends and family and a lot of time traveling, how much time does that leave you for work?
Say you're working an 8-hour workday for 4 days a week instead of 5 because that's the way that you decide you want to live your life! You're spending that 8 hours adulting and working, what is that going to support? What are you doing with the rest of your time?
If you want to be spending time with friends and family, what type of activities are you going to do? Do you know how much that’s going to cost you?
Your numbers should be your new best friend! They are the key to not only finding your break-even point but then finding your new goal number to make sure you can afford to live your day-to-day life the way you want. Otherwise, you're not going to enjoy your real estate journey and you might not be able to achieve what you want from it.
Now that you know how to find your numbers and what's behind them, the next step is figuring out what real estate asset classes match the financial goals you have for yourself. I’ll be diving deeper into that part a little bit later! For now, we’re focused on getting to know our numbers.
