Your Financial Bathtub
Everyone has a financial bathtub. We have a faucet that represents an income stream like a job or an asset. We also have a drain that represents our expenses and things that cost us money. The goal for our financial bathtub is to have more money coming in through our faucet than going out through our drain. The way we accomplish this is in a few ways:
-We can try limiting how big our drain is and make our expenditures as low as possible, but keep in mind we can never truly plug up our drain.
-We can try and make our faucets pour more water in the form of pay increases.
Both these ways are good, but the best way is to add more faucets. There are no rules stating how many faucets you can have pour into your bathtub. The way you add more faucets is investing in income-producing assets like real estate. The goal should be to keep adding these types of faucets where, eventually, you can turn off your “job” faucet and be able to live purely off of your asset faucets.
Properties Sold In February
Report Of The Month
Management Tip of the Month
Preventative Maintenance
I have seen landlords issue repairs where they put a Band-Aid on a bullet wound. They keep brushing off minor repairs and think to themselves that they can do the bare minimum, hoping to save a few dollars. But they need to be aware that preventative maintenance can save thousands of dollars in potential future repairs. As an example, I have seen damage to showers like cracked tiles or dried/removed caulk where water can seep into the walls and cause dry rot. Along with that, it could rust and damage the shower pan, which is expensive to replace. Make sure to correctly and fully repair things that could cause huge headaches later on. Also, make sure to tell your tenants to report any problems to you immediately so you can do the necessary repairs before any more damage can happen.
I give a lot of information about this process in my book: