We’re all familiar with the saying, “If you fail to plan, you plan to fail”; a particularly poignant and well-used maxim in property investment circles…But what about the follow through?
While planning is obviously a critical first step when building a lucrative investment portfolio, it’s logical that without action, those well laid plans will only ever amount to good intentions.
So what actions does one take in order to make their blueprint for property investment success into a tangible, income-producing portfolio?
1. Write it down
First and foremost, commit to your plans and goals by writing them down. This simple act in itself can be the biggest differentiator between success and failure.
All too often people fail to construct a personal financial plan, even though doing so has reaped demonstrable rewards, time and time again, among many of the world’s top entrepreneurs and financial success stories.
Writing down your intentions provides a psychological element of commitment. As soon as you put pen to paper, it’s there for the world to see. No longer just a fleeting thought or emotion, your plan becomes an enduring entity that you’ll be far more compelled to act on.
Be as specific as possible when noting down your investment goals in particular, as this will enable you to visualise the outcomes of certain objectives, whilst creating measurable markers of your success.
2. Measure the milestones
This leads me to plan empowerment tip number two: make sure everything is measurable, because when you can measure it, you can manage it. This is simple business planning 101.
Being vague and applying guesstimates to your investment targets, or making general sweeping statements such as “I want to be financially free in 10 years,” is not going to give you any clear incentive, guidance or direction.
How are you going to measure what that outcome looks like in hard numbers? Get specific. What does financial freedom mean to you? What does it look like? How will you measure your degree of ‘freedom’ to know whether you’ve achieved this goal?
3. Take stock
Humans gain a great sense of satisfaction from seeing our plans emerge into physical reality. Tangible outcomes provide a sense of gratification as you strive to realise your goals. This is particularly the case when you have to spend money to make money, and it can seem like you’re financially foregoing an awful lot on occasion.
A great way to keep your eyes on the prize and chart your progress is to maintain a personal balance sheet that you updated every quarter or six months, allowing you to literally watch the change happen.
Just as beneficial can be your own private profit and loss statement, so you can assess your income and expenses and see exactly how today’s financial sacrifices culminate to an increase in your net worth tomorrow.
Focus on the cumulative effects of your investment accomplishments, particularly in the early days, as the sacrifices and investments made in those beginning, active investment stages are critical to your long term outcome.
4. Make it visible
You know how you write things down, shove the piece of paper away somewhere and then promptly forget about it? There’s a reason humans use calendars; we are generally a very visual bunch and need frequent reminders to keep on track.
In the same vain, it’s important to keep your investment plans and goals somewhere you can see them at least once a day.
The capacity to visually review and interact with your plans every day ensures they’ll always be in the forefront of your mind and, more often than not, when you maintain focus on something you’re far more likely to achieve the desired outcome.
In his book ‘Think and Grow Rich’, Napoleon Hill speaks of some of the world’s top success stories, and specifically how their habit of daily visualisation is one of the most powerful means to ensure success.
5. How can you make your money work harder?
This requires an honest assessment of where you could cut back financially in order to have more disposable income to invest in property. You don’t have to go so far as to live in a cardboard box, but scrapping some of your superfluous expenses and making a few short term sacrifices in the here and now can reap significant rewards in the future.
That extra cup of coffee a day might only represent $5 out of pocket at point of purchase, but when you multiply that one cup over 365 days, suddenly it’s cost you $1825.
And when you add the concept of compounding to that cup of coffee, and the fact that you could have invested that $1825 into something that would provide a net return, well…you get the picture. Now that $5 coffee could be costing you thousands in future earnings.
This is all about intentions, and determining what’s more important in your life, both now and down the track.
6. Share the journey
An excellent way to stay on track and empower yourself to reach your goals is to find a mentor or coach, ideally someone who has ‘been there and done that’, having travelled a similar path you intend to go down. Although this isn’t absolutely essential.
Learning from other’s experiences and having someone you’re accountable to can be a great motivator to stay on track.
It’s also important to get your spouse or partner on board, ensuring the path you intend to take won’t create any friction in your relationship by maintaining open dialogue throughout your journey and keeping everyone committed to the same outcome.
7. Reward yourself, because YOLO
Importantly, make sure you’re kind to yourself along the way. Build specific, goal-related rewards into your overall plan to keep you motivated and give you something to strive for in the short term. It’s all well and good to know that in 10 or 20 years you have an ultimate financial and lifestyle gain to look forward to, but that can seem a long way off when you’re making sacrifices and plugging away diligently today.
Of course you’re not going to squander every cent you make, but it’s important to have a little fun and give yourself a financial ‘pat on the back’ for taking the necessary steps and sacrifices to get you into a better future financial position.
You never know what tomorrow might bring, so you may as well enjoy some of the short-term benefits from investing in the here and now, within reason of course.