Let’s dive into how interest rates are affecting the real estate market, particularly from an investor’s point of view. I’ll use an upcoming property purchase as an example to show how high versus low interest rates can make or break an investment.
Table of Contents
Video: Does it Still Make Sense to Invest in Rental Properties?
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The Property: A Rough Aplex with Opportunity
I’m about to close on an 8-plex (eight-unit building) that’s seen better days. It’s a rough property, but it has a lot of potential. In real estate, you make money by adding value, and that’s exactly what I plan to do. In today’s high-interest-rate environment, it’s nearly impossible to make rental properties cash flow without taking steps to improve them, either by increasing rents or enhancing the property.
This particular property was listed on the MLS, and it’s a rare find in Northern Colorado. Even at $600,000, which is very cheap for an 8-plex in our area, the numbers aren’t great under current conditions. However, that’s why it’s available at a lower price—because it needs work. Let’s look at how interest rates play into the decision to buy a rental property like this one.
InvestFourMore Cash-on-Cash Calculator
How Interest Rates Impact Cash Flow
The cost of borrowing is a huge factor for investors. With interest rates as high as they are today, the numbers on many rental properties simply don’t add up. For this example, I’ll assume a $600,000 purchase price with a 20% down payment, though in reality, I often use private money and refinance later.
Purchase price: $600,000
Down payment (20%): $120,000
Loan amount: $480,000
Monthly rent: $4,000
With a traditional 20% down payment, this deal would be tough to justify right now. The property brings in $4,000 per month in rent, but the mortgage and expenses eat up nearly all of that income, especially with current interest rates. If you were to pay all cash for the property, your return on investment (ROI) would be an abysmal 2.2%, which is well below inflation and far from ideal for any investor.
InvestFourMore Cash Flow Calculator
Additional Costs to Consider
Investors should also be aware of additional expenses beyond the down payment. You’ll need to factor in closing and loan costs, which can add up quickly. These might include:
Appraisal fees
Prepaid interest
Insurance
Taxes
Loan origination fees
Title costs
Improvement Location Certificate (ILC)
In total, you’re looking at an additional 3% of the loan amount, or about $15,000, bringing your initial cash outlay to around $134,000. If you’re financing through a bank, you’ll also need reserves on hand to cover unexpected costs like vacancies or maintenance.
InvestFourMore Cap Rate Calculator
Ongoing Monthly Expenses
Here’s a breakdown of some estimated monthly expenses for this property:
Insurance: $500
Property taxes: $500 (this is in a small town, so taxes are relatively low)
Property management: Even if you manage the property yourself, you need to account for your time.
Maintenance: Given the rough condition of this property, maintenance costs could be high, particularly if the property isn’t fully renovated.
Vacancies: Vacancies are always a factor. Lower-quality properties tend to have more tenant turnover, while renovated properties attract longer-term tenants.
Before financing, this property is already costing about $2,900 a month to operate. If it brings in $4,000 a month in rent, that leaves just $1,100 a month in profit, or $13,200 a year. For a $600,000 investment, this results in a 2.2% ROI—not nearly enough to make it worthwhile.
The Impact of Financing
Let’s assume you take out a $480,000 loan with an 8% interest rate on a 30-year term, which is typical for investors right now. Your monthly mortgage payment would be approximately $3,522. Combined with the operating expenses of $3,000 a month, your total expenses are $7,000. Since the property only brings in $4,000 in rent, you’d be losing $3,000 a month!
If you plan to hold the property and fix it up, you might be able to increase the rents to $7,000–$8,000 a month. In that case, your cash flow would improve, but you’d still only be earning around $1,000 a month, or a 5% ROI—still not great for the effort and risk involved.
How to Qualify for a Loan on an Investment Property
When Interest Rates Drop
The real opportunity comes when interest rates fall. If rates were to drop to 5%, your monthly mortgage payment would decrease to around $3,000. Now, with $8,000 a month in rental income, your expenses would total $6,000, leaving $2,000 a month in profit, or a 10% ROI. This scenario shows how significantly lower rates can change the profitability of a property.
Building Equity and Future Appreciation
Beyond cash flow, there’s another reason to invest in rental properties: appreciation and equity growth. If I fix up the property and raise rents, other investors may be willing to buy it at a higher price, accepting lower returns in exchange for the improved condition and potential for future appreciation.
For example, if the rents reach $96,000 annually, and the property sells at a gross rent multiplier of 9, the value could increase to around $860,000. After accounting for $100,000 in repairs and additional closing costs, that’s a potential $316,000 gain in equity—a strong outcome for a value-add property like this.
Conclusion
Buying rental properties in today’s high-interest-rate environment is challenging, but there are still opportunities for investors who know how to add value and improve properties. High rates may deter some, but if you can weather the storm and improve the property, you stand to benefit from future rate cuts and potential equity gains. The key is finding the right property, knowing your numbers, and being prepared for the risks and rewards that come with real estate investing.
Gross domestic product Gross Domestic Product, or GDP, is a metric which takes into account the value of end-user goods and services in a given survey period, whether quarterly or annual. It can be calculated in three ways by focusing on production, incomes, or expenditures and it is used to provide insight to the size … [Read more…]
When it comes to real estate investing, the 1031 exchange is a powerful tool for deferring capital gains taxes. But did you know there’s a variation of this strategy called the Reverse 1031 Exchange?
Imagine you find a great deal on an investment property that you don’t want to miss, but you haven’t sold your current property yet. Don’t miss the deal! A Reverse 1031 Exchange allows you to secure the new property while deferring capital gains taxes on the eventual sale of your existing one.
If you’re not familiar with it, this article will provide you with a detailed understanding of how reverse exchanges work, their benefits, and some key considerations to keep in mind.
Disclaimer: A 1031 exchange has many rules and regulations and you have to make sure you complete the exchange correctly to avoid a large tax bill from the IRS. I am not an accountant or an attorney, please consult your attorney or accountant for any specific tax or legal advice.
Table of Contents
What is a Reverse 1031 Exchange?
A reverse 1031 exchange allows you to acquire a new property before selling your current investment property.
This is particularly useful in a hot real estate market where you find an ideal replacement property before you can sell your existing property.
In a traditional 1031 exchange, the process is straightforward: sell your property first, then use the proceeds to purchase a new one. But in a reverse exchange, the sequence is reversed, offering investors flexibility but also adding complexity.
How does this compare to a regular 1031? How 1031 Exchanges Work with Rental Properties
How Does a Reverse 1031 Exchange Work?
Here’s a step-by-step breakdown of a reverse 1031 exchange:
Identify the Replacement Property: You find and decide to purchase the replacement property.
Engage a Qualified Intermediary (QI): Before closing on the replacement property, you must engage a QI who will facilitate the exchange process.
Create an Exchange Accommodation Titleholder (EAT): The QI sets up an EAT, which temporarily holds the title to the new property.
Close on the Replacement Property: The EAT purchases the new property using funds provided by the investor.
Identify the Relinquished Property: Within 45 days of acquiring the new property, you must identify the property you intend to sell.
Sell the Relinquished Property: You have 180 days from the acquisition of the replacement property to complete the sale of your current property.
Complete the Exchange: Once the relinquished property is sold, the proceeds are transferred to the EAT, who then transfers the title of the replacement property to you.
Benefits of a Reverse 1031 Exchange
Market Flexibility: Allows you to secure a desirable property without the pressure of selling your existing property first.
Time Efficiency: Reduces the risk of being unable to find a suitable replacement property within the IRS’s strict deadlines.
Tax Deferral: Like a traditional 1031 exchange, it allows you to defer capital gains taxes, freeing up more capital for investment.
1031 Exchange Savings Calculator
Key Considerations
Financing Challenges: Financing a reverse exchange can be tricky since you’ll need funds to purchase the replacement property before selling the old one.
Higher Costs: Reverse exchanges tend to be more expensive due to the involvement of QIs and the complexity of the transaction.
Strict Deadlines: The IRS mandates strict 45-day and 180-day deadlines, similar to traditional 1031 exchanges, which must be adhered to avoid tax penalties.
Conclusion
Reverse 1031 exchanges can be a valuable tool for real estate investors looking to upgrade or diversify their portfolios without the immediate pressure of selling their current properties. However, the process is complex and requires careful planning and coordination with experienced professionals.
As always, feel free to reach out with any questions or to discuss how we can assist you with your real estate investment journey. Happy investing!
Want to know how to make $2,000? Here’s how you can make extra money online and offline. Whether you’re a stay-at-home parent looking to bring home more money or saving up for a large purchase, making $2,000 can make a big difference. In this post you’ll learn: Making an extra $2,000 can seem like a…
Want to know how to make $2,000? Here’s how you can make extra money online and offline. Whether you’re a stay-at-home parent looking to bring home more money or saving up for a large purchase, making $2,000 can make a big difference.
In this post you’ll learn:
Ways to make $2,000 fast
How to make $2,000 per day
How to make $2,000 online
Making an extra $2,000 can seem like a big goal, but it’s definitely achievable with the right approach. Whether you’re looking to pay off debt, save for a vacation, or just make more money, there are many ways to reach your goal.
How To Make $2,000 Fast
Here’s a list of ways to make $2,000.
1. Freelancing
If you have skills like writing, editing, programming, bookkeeping, digital marketing, data entry, SEO, graphic design, or transcribing, you can find jobs online. You can also find jobs if you know how to use software like Adobe, Canva, WordPress, or email marketing tools.
I recommend checking out UpWork to see which skills you have (you may be surprised to see what’s listed there) and start applying for jobs.
I’ve done quite a bit of freelancing and have found jobs on UpWork, Fiverr, and FlexJobs. This is a great way to make money since it’s flexible and usually done on your own schedule. There are many other freelance platforms as well!
Recommended reading: 16 Best Freelance Jobs & How To Get Started
2. Blogging
I started a blog back in college and it’s still one of my favorite ways to make semi-passive income. I currently make between $2,000-$4,000 a month on my blog and it’s entirely passive, meaning I no longer do any work on it.
There are tons of ways to make money blogging including affiliate partnerships, sponsored posts, ad revenue, and selling your own goods or services.
You can create your own blog here with this easy-to-use tutorial. Michelle also has a Free How To Start and Launch A Money-Making Blog Course you can join, and it will help you start and launch a successful blog! Once you start a blog, you can learn how to monetize it with affiliate income and sponsored posts.
You can learn how to start a blog with the free How To Start a Blog Course (sign up by clicking here).
3. Proofreading
If you have an eagle eye for detail, love finding spelling or punctuation errors, and want to learn how to make $2,000 online, you may want to become a proofreader. Working as a proofreader is generally quite flexible and you can work from anywhere in the world since your job is done from a computer.
You can find jobs proofreading for authors, law firms, blogs, and more. This is a great way to make a side hustle income or a full-time living as proofreaders can make around $50,000 a year.
Here is a FREE 7-day course just for people who want to stop wasting time and start making more money with their proofreading skills. I definitely recommend that you check it out.
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This free 76-minute workshop answers all of the most common questions about how to become a proofreader, and even talks about the 5 signs that proofreading could be a perfect fit for you.
4. Flip items for resale
You’ve likely seen TikToks where people flip stuff for profit. In case you don’t know what a flipper is, this is someone who buys something at a lower price and sells it at a higher price for a profit. This can also sometimes mean fixing up the item in order to sell it at a higher cost.
This is a great side hustle that can turn into a full-time job and is perfect if you want to know how to make $2,000 without a job (well, a traditional 9-5 job!).
A ton of people do this full-time!
This job is quite flexible because you can find stuff to flip on your own schedule. If you have kids, you can even take them along to garage sales and flea markets to score items to flip. This side hustle takes about 5-10 hours a week for beginners which can earn you up to $1,000 a month in the beginning.
Here is a free webinar, Turn Your Passion For Visiting Thrift Stores, Yard Sales & Flea Markets Into A Profitable Reselling Business In As Little As 14 Days, that will help you learn how to make money by flipping items as well.
5. Transcription
A transcriptionist is someone whose job is to turn files into text documents. You listen to what is being said in the file and type it into a text format. Transcriptionists usually make between $15-$30 an hour on average.
This job is flexible because you can choose to work part-time as a freelancer or full-time with an agency. As a transcriptionist, you must have good typing skills and a fast typing speed. You need excellent listening skills since you’re listening to files and having to type them up quickly.
A great free resource to take is FREE Workshop: Is a Career in Transcription Right for You? You’ll learn what transcription is and why it’s a highly in-demand skill, who hires transcriptionists, what it takes to become one, and more.
Recommended reading: 18 Best Online Transcription Jobs For Beginners
6. Pet sitting
One of my favorite side hustles is pet sitting. I’ve found all of my pet-sitting jobs on Rover, but you can also check out other dog-walking apps like Wag, Care.com, PetSitter, and more. Finding jobs can be hard at first if you don’t have experience, so it is usually important to set your rates lower than your competitors (this way you can get some reviews!).
Once you get jobs and reviews, you can slowly increase your rates and build your clientele. This is a great way to make a few hundred a week on top of a full-time job or other side hustles.
Recommended reading: 7 Best Dog Walking Apps To Make Extra Money
7. Sell crafts
If you have a hobby or craft you enjoy, you may want to try selling your items on Etsy. With almost 100,000,000 active Etsy buyers, Etsy is a great website to sell your handmade goods to people all around the world.
Here are some things you can sell on Etsy:
Printables
Stickers
Rugs
Soaps
Bath bombs
Crocheted and knitted items
Jewelry
I shop on Etsy all the time, and I love it!
Recommended reading: 16 Best Things To Sell On Etsy
Do you want to make money selling printables online? This free training will give you great ideas on what you can sell, how to get started, the costs, and how to make sales.
8. Virtual assistant
A virtual assistant is in charge of all kinds of tasks including:
Email management
Customer support
Graphic design
Social media management
I’m currently a virtual assistant and love it. The pay is high and I get to work on my own schedule. To find jobs, I recommend checking out UpWork, FlexJobs, and Fiverr. Type in “virtual assistant” on any of these job boards and you’ll quickly find tons of job listings with details including pay, benefits, work tasks, hours, and more.
9. Writing
If you have any kind of writing experience, try finding writing jobs online. There are thousands of online writing jobs out there from companies that need help creating blog posts and content for their company.
Even if you don’t have writing experience, I still recommend checking out job board sites and applying for low-paying jobs. This will get you experience as you build up your portfolio and help you land more jobs down the line.
I have been a freelance writer for years, and it’s a great way to make extra money. In fact, I’m writing this article as a freelancer!
10. Find Craigslist gigs for extra money
Craigslist is still quite popular in cities and there are always new jobs popping up. You’re most likely to find jobs in:
Labor (construction, warehouse work, landscaping)
Customer service (call centers)
Tutors
Short-term freelancing gigs
Moving
Always remember to be careful on any website, especially Craigslist. If anything ever feels suspicious or off, listen to your gut.
11. Delivering food
One of the easiest ways to make money is by delivering food with DoorDash. This is because they are always in need of new DoorDashers.
With DoorDash, your job is to deliver meals to customers. You can work on your own schedule and work as little or as many hours as you want to. Depending on where you live, you can deliver food by bike, scooter, or car.
How much you earn depends on each delivery, how much you earn in tips, and how fast you deliver items. The DoorDash app makes it convenient to accept delivery jobs, find out where to go, and how to get there.
12. Invest in real estate
Though it’s not a quick way to make money, you can make money in the long term by investing in real estate. When done right, real estate investing can be a lucrative way to make passive income and help diversify your investment portfolio.
There are many ways to invest in real estate including:
Buy REITs (real estate investment trusts)
Buy a house and flip for profit
Buy a house, live in one room, and rent out the rest of the rooms
Use an online real estate platform like Fundrise or Crowdstreet
Recommended reading: 23 Best Real Estate Side Hustles To Make Extra Money
13. Develop apps
There are a few ways to make money developing apps including in-app purchases, in-app subscriptions, advertising, affiliate links, and sponsorships.
You can test and research ideas that might do well in app form. Ask yourself what people need help with and how your app can solve their problems. Then, validate your idea by having people fill out a survey to get a better idea of what kind of app you should create.
You also need to figure out how you’ll market your app and get new customers. This might require you to reach out to blogs in your app’s niche, influencers, and media outlets to get coverage for your app.
Also, there is a side hustle related to this – you can test and try out new apps with Freecash. You can get paid from $1.00 to $75 per app. Some apps listed on Freecash (these numbers may change) include TikTok, which pays $8 if you’re a new user, and Upside, a gas cash back app, which currently pays $24.01 to new users. HBO pays $3.96 for new users subscribing to a free trial. There are many other apps you can earn from as well. Click here to sign up for Freecash (it’s free!).
14. Online surveys
Getting paid for surveys is not going to get you rich, but it’s an easy way to make money in your spare time. Companies pay people to fill out surveys because they need opinions on products and services. Once you finish filling out a survey, these survey sites typically pay you with cash, via PayPal, or gift cards.
Surveys aren’t full of hard questions that take hours to complete. The questions are usually short and straight to the point. Companies are trying to better their products and services, and surveys help them do this.
Here are some of the top surveys that pay in cash and free gift cards to sign up for:
Swagbucks
Survey Junkie
Branded Surveys
American Consumer Opinion
InboxDollars
Pinecone Research
Prize Rebel
User Interviews
Recommended reading: 21 Best Free Surveys That Pay Cash Instantly
15. Social media management
Working as a social media manager is a job that seems to be always hiring. I did a quick search on Fiverr and found many job listings pop up. This is because companies look to hire out for their social media management.
To find jobs in social media management, go to job boards like UpWork and type in “Social Media Management.” You’ll see posts from entrepreneurs and companies looking to hire a social media manager. These job listings will tell you what they need, like scheduling posts on Instagram and Facebook, creating visuals using Canva, and responding to comments from followers.
16. Babysitting
One of the easiest and quickest ways to make money is babysitting. I’ve found all of my babysitting and nannying jobs on Care.com, but you can also check out SitterCity, UrbanSitter, or Babysits. People are always looking for babysitters for date nights, errands, and special events.
To increase your chances of landing jobs, make sure to get a background check on the website (Care.com has this option) as this will make you stand out from other candidates. If you have previous experience babysitting, ask for references so hiring parents can see that you’re a good candidate for their job listing.
17. Bookkeeping
Becoming a bookkeeper can be a great way to learn how to make $2,000 from home.
A bookkeeper is someone whose job is to maintain clean and organized financial records for a business. Some tasks can include sending invoices on your client’s behalf, running payroll for your clients and their team, preparing state tax filings, and helping the client make business decisions for future expenses.
A bookkeeper’s income can vary depending on how many clients they have, how much experience they have, and how much they charge. On the low end, bookkeepers can earn $2,000 a month, while on the high end bookkeepers can earn $16,000 a month. Bookkeepers are in demand. According to the Department of Labor and Statistics, about 200,000 new jobs open in the US for bookkeepers each year.
Here is a free training – How to start a profitable bookkeeping side hustle, that can generate $2,000 to $16,000 a month (part-time)!
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This free training will show you how to start a profitable bookkeeping side-hustle in the next 30 days—even if you have no prior experience!
18. Online tutoring
An online tutor is a teacher or expert who helps someone in a particular subject through the internet. This is done through video calls on a computer. Online tutors can make between $15 an hour to well over $100 an hour. Tutors are most often in needed in subjects like math, science, and foreign languages.
Many sites are hiring online tutors such as Tutor.com, Varsity Tutors, and Outschool.
19. Sell old electronics
Before throwing away your old electronics, consider selling them or trading them in.
Best Buy and Amazon both have trade-in programs and many other places are always looking to buy electronics. Electronics that are most easy to sell include smartphones, tablets, laptops, gaming consoles, smartwatches, digital cameras, and e-readers like Kindles.
You can sell electronics on sites like:
Decluttr
Facebook Marketplace
eBay
Gazelle
If you want to learn how to make $2,000 in 3 days, I usually recommend finding stuff to sell!
20. Photography
There are many ways to make money with photography including freelance photography, portraits, real estate, and product photography. You can also sell your photos to stock agencies like Shutterstock or Unsplash if you want to run an online business that makes $2,000.
To get started selling your photography, build an online portfolio of your work. This is going to help you attract new clients and customers. Always keep your customers satisfied and happy as word of mouth makes a big difference in the photography business.
It’s important to market your services on social media and have a professional website so people can get in contact with you easily.
Recommended reading: 18 Ways To Get Paid To Take Pictures
21. Rent a room
If you have a spare bedroom you’re not using, renting out that spare room is an easy and convenient way to make extra income.
It’s important to do a few things including cleaning and decluttering the room, researching market rates, taking high-quality, well-lit images of the room, and checking local laws to see if it’s legal to rent out a room where you live.
You can potentially rent out your room short-term on sites like Airbnb or find someone who is looking for a room for the long-term. If you find someone renting out a room for the long-term, it’s important to get a security deposit, a contract in place, and references from the renter.
My sister (the owner of this site) has rented out spare rooms in the past, even to me!
22. Rent your car
Renting your car can be a great way to earn extra income, especially if you’re not driving it that often.
First, you’ll want to check with your insurance to see if you’re allowed to rent out your vehicle. You’ll also need to see if you need a special license to rent your car. Once you have those things dialed down, choose a rental platform.
There are many platforms including Turo, GetAroundUSA, and HyreCar.
23. Work overtime
Working overtime is one of the best ways to make the most money. This is because employers usually pay a higher hourly wage for overtime hours. There are tons of jobs that pay extra for overtime including working as a plumber, pilot, home health aid, electrician, automotive technician, and so many other jobs.
Frequently Asked Questions
Below are answers to common questions about how to make $2,000.
How to make $2,000 in passive income?
There are many ways to make $2,000 in passive such as blogging (via affiliate marketing or ad revenue), selling crafts like printables on Etsy, investing in real estate, and renting out your room or car.
How to make $2,000 a week online?
To make $2,000 a week, you need to make about $285 a day. Breaking it down this way makes the number seem less daunting and more achievable. To make $2,000 a week, you’d need to pick up quite a few freelancing or Craigslist gigs, flip high-profit items, or rent out a room on Airbnb or your car on Turo. Doing multiple things will increase your odds of making $2,000 a week online.
How to make $2,000 per day?
Making $2,000 per day is going to require a lot of work and even then it’s not always possible. After all, $2,000 a day would be $60,000 each month! Working gigs won’t be enough and instead, you’ll have to get lucky by flipping a high-profit item (like real estate) or starting your own business.
How to make $2,000 online?
There are many ways to make $2,000 online, such as with freelancing gigs, blogging, virtual assisting, social media management, and selling crafts on Etsy.
Best ways to make $2,000 – Summary
I hope you enjoyed this article on the best ways to make $2,000 fast.
Making $2,000 can seem tough at first, but once you start trying out different side hustles and get into a groove, making extra cash gets easier.
Want to win more listings? Catch today’s podcast with Davis Bartels and you will! First, Davis shares several quick tips that will immediately improve your rapport with sellers. Later in the show, he outlines his entire process, including what happens before—and after—meeting with a potential client. Plus, Shelby and Davis offer solutions to the biggest problems real agents have when trying to lock down listings.
Listen to today’s show and learn:
What you’ll learn in today’s Real Estate Rockstars Podcast [0:00]
Growing your sphere to grow your business [2:03]
How to ensure that you embody real estate [3:11]
The first thing to do after connecting with a potential client [6:34]
What to do (and not to do) when consulting with a seller [8:12]
What sellers actually care about [10:07]
The last part of Davis’ listing consultation [12:11]
What to mail sellers prior to a listing presentation [14:27]
Why Davis does his own comps every time [16:20]
Get Davis’ pre-listing email from the Agent Success Toolbox [22:19]
Tips on starting your listing presentation off right [22:51]
A tip on when to do your listing presentation when competing with other agents [25:52]
Davis’ two-step process for listing presentations [26:47]
More tips that will help you crush your next listing presentation [29:49]
What to cover in your listing presentation [35:26]
How to cover comps like a pro [42:25]
When and how to propose a list price [44:34]
How to follow up after a listing appointment [48:00]
The best way to get contact information at an open house [51:39]
What the future holds for Davis Bartels [54:45]
Shelby Johnson’s real estate portfolio [56:43]
How the short-term-rental game has changed [58:46]
How Shelby’s thoughts on real estate investing have changed [1:00:12]
What the future holds for Shelby Johnson [1:02:09]
Davis’ favorite real estate tools and events [1:05:01]
Where to find and follow Davis Bartels [1:06:13]
Davis Bartels
Davis’s goal is to provide full service, front to back real estate services for their clients. They represent Sellers, buyers, landlords, tenants, and investors.
No matter the task, if it is in Residential Real Estate, Davis can help.
Davis Bartels’ personal career began during the Real Estate downturn in 2009. He began his journey by managing and negotiating high-level loan modifications and short sale transactions. As the market began to return to a healthy state, Davis’s focus shifted from helping distressed homeowners and sellers to helping those selling on a more traditional basis. Currently with Pinnacle Estate Properties in Westlake Village.
Along the way, they founded Oak Canyon Property Management. Their firm offers full-service property management. They manage on short-term, mid-term and long-term basis.
They are uniquely positioned to fully serve their clients across the real estate spectrum, no matter the task. Having the experience and tools allows them to offer their clients perspective from multiple viewpoints regarding their assets in order to ensure that they’re set up in the most effective manner to reach their long-term goals.
Davis has been married to his wife, Jessica, for 8 years and they have 2 girls (Everly-7 and Violet-2) and 1 more girl on the way. They love their Lab, Molly. Aside from real estate, Davis enjoys watching and playing sports (basketball and baseball), he enjoys cooking for friends and he is a car (and speed) enthusiast.
Related Links and Resources:
It might go without saying, but I’m going to say it anyway: We really value listeners like you. We’re constantly working to improve the show, so why not leave us a review? If you love the content and can’t stand the thought of missing the nuggets our Rockstar guests share every week, please subscribe; it’ll get you instant access to our latest episodes and is the best way to support your favorite real estate podcast. Have questions? Suggestions? Want to say hi? Shoot me a message via Twitter, Instagram, Facebook, or Email.
AIR Communities, a publicly traded real estate investment trust (REIT), owns 76 rental housing communities in major coastal markets, including Miami, Los Angeles, Boston, and Washington D.C. Blackstone intends to invest more than $400 million to maintain and improve these communities, with the potential for further capital to support growth. “The business the AIR team … [Read more…]
Are you wondering what the best passive income apps are? The best passive income apps can help you make money and build wealth while sleeping, on vacation, and more. With passive income apps, you can make money using just your phone or computer. These apps help you earn money in different ways, like investing in…
Are you wondering what the best passive income apps are? The best passive income apps can help you make money and build wealth while sleeping, on vacation, and more.
With passive income apps, you can make money using just your phone or computer. These apps help you earn money in different ways, like investing in stocks, getting cash back when you shop automatically, or renting out your things.
Passive income is money you earn without having to work all the time. You might need to do some work at the start, but after that, the money keeps coming in with little effort.
You don’t need to spend hours every day to see results. Many of these apps are easy to use and free, so they are a great way to improve your finances with little effort.
Using the right mix of passive income apps can help you make extra money regularly or even make a full-time income.
Recommended reading: 18 Passive Income Ideas To Earn $1,000+ Each Month
Best Passive Income Apps
Below are the best passive income apps:
1. Freecash
Freecash is a popular passive income app that helps you make some extra money with little effort. You can earn by completing tasks, such as taking surveys or downloading apps.
Another way that you can earn passive income with this app is by referring people to the app. You can earn up to 30% of your referral’s earnings for as long as they are a member. Your referral earnings start at 5% and can go up from there, all dependent on your affiliate earnings.
I have personally earned over $300 in passive income referral earnings from this platform (in addition to affiliate income), so I know that this is real.
Click here to sign up for Freecash.
2. RVshare
RVshare is a money making app where you can rent out your RV to others. This can help you make extra money every month. Many people use RVshare to turn their RV into a good source of passive income.
If you have an RV that you’re not using, you could make $100 to $300 a day, or more, by renting it out to others through RVshare.
RVshare is a great app for making money because it helps travelers save by renting RVs directly from owners, without a middleman. It’s like Airbnb, but for RVs.
You can rent many types of RVs on RVshare, such as:
Class B camper vans
Travel trailers
Pop-ups
Class C Motorhome
Class A Motorhome
Toy hauler
RVshare handles all payments securely and sends money to your bank account one business day after each rental starts.
You can learn more about RVshare here.
3. Neighbor
Neighbor is a self-storage app that lets you rent out extra space in your home. You can make money by offering spots like your garage, driveway, or even a spare room.
You can use this website to rent out your unused space and make up to $15,000 a year. With Neighbor, you can rent out your garage, driveway, basement, parking lot, shed, warehouse, carport, attic, street parking, or even a closet.
You can choose your own prices and decide which reservations you want to accept and host.
Neighbor provides $1,000,000 in host liability protection for your peace of mind. You also receive automatic monthly deposits directly to your bank account for fast payment.
Here’s how Neighbor works:
List your space: Describe your space and set your earning goals on Neighbor.
Respond to renters: Review requests from renters interested in your ad. You can see what they want to store and when, and decide whether to approve or decline.
Schedule move-in: Once you approve a renter, schedule their move-in date.
You can sign up for Neighbor for free here.
You can also learn more about Neighbor at Neighbor Review: How To Make Money Renting Your Storage Space.
4. Swagbucks
Swagbucks is a popular app that lets you earn money for doing simple tasks online. You can use it on both your phone and computer.
You earn points, called Swagbucks (also known as SB), for activities like taking surveys, watching videos, and browsing the web. These points can be redeemed for gift cards or cash via PayPal.
I have personally received over 110 gift cards from Swagbucks (I like to redeem my points personally for free Amazon gift cards).
Here are some ways to earn on Swagbucks:
Surveys – Share your opinions on various topics and earn points.
Videos – Watch short video clips and earn a few points for each one.
Shopping – Do your usual online shopping through the app’s links and get cash back.
Web browsing – Use the Swagbucks search engine and earn points just for searching.
Referral program – You can refer friends and family to Swagbucks and earn points.
Swagbucks is free to join and use, making it a great choice for anyone looking to make some extra money with little effort.
You can join Swagbucks through my referral link, and receive a $10 bonus.
5. Fundrise
Fundrise is one of the highest-paying passive income apps that lets you invest in real estate with income generating assets. You can start with as little as $10 and get started in around 5 minutes.
Fundrise pools your money with other investors to buy properties, such as single family homes, apartments, and industrial properties. You earn money from rent and property sales.
Investing in real estate can be risky, so make sure you understand what you’re getting into. Fundrise has an easy-to-use app and detailed updates on your investments.
Remember, your money is tied up for a while, so this is for long-term goals. Fundrise makes real estate investing simple and accessible.
You can sign up for Fundrise here.
6. Honeygain
Honeygain is a popular passive income app that lets you earn money effortlessly just by sharing your unused internet bandwidth and your internet connection. You can install it on your desktop or mobile device.
Here’s how Honeygain works:
You keep the app running in the background.
The app uses your unused internet resources.
You get paid for the data shared.
You earn money based on the amount of internet traffic routed through your connection. Honeygain pays $1 for every 10 GB of traffic.
7. Ibotta
Ibotta is a free cash-back app that helps you save money when you shop. You get rewards from shopping both in-store and online.
With the Ibotta app, you sign up for an account, unlock rebates and rewards, shop at stores like Walmart, Target, Kroger, and more, verify your purchases, and then earn cash. You can redeem rebates from hundreds of stores, and it doesn’t cost you anything – it’s free money!
Plus, Ibotta lets you earn cash back both online and in-store, setting it apart from other companies.
Ibotta stands out as one of the easiest passive income apps because you earn money while shopping as usual. It pays you in cash or gift cards for stores like Amazon and Starbucks.
Please click here to join Ibotta.
8. Airbnb
Airbnb can be a great way to earn passive income with minimal effort. By renting out properties short-term, you can make extra cash without much day-to-day work.
Whether you have an extra room, a vacation home, or even just a spare couch, Airbnb lets you list your space for short-term rentals, transforming unused real estate into a regular income source.
Airbnb manages bookings, payments, and provides insurance coverage, making it convenient for hosts once everything is set up. With its worldwide presence and easy-to-use platform, Airbnb continues to be a leading choice for earning passive income through property rentals.
9. Acorns
Acorns is a popular app that helps you save and invest your money without effort. It rounds up your everyday purchases to the nearest dollar. Then it invests the spare change into a diversified portfolio.
For example, if you buy a coffee for $3.50, Acorns rounds it up to $4.00. The extra $0.50 is invested.
You can click here to sign up for Acorns.
10. Rakuten
Rakuten is an easy-to-use app that helps you earn cash back from your shopping. You don’t need to do anything special. Just shop at over 2,500 stores and retailers through the app, the Rakuten website, or by downloading the Rakuten browser extension, and you can earn payouts.
Simply choose a store from their extensive list (including Kohl’s, REI, Toys”R”Us, and more), shop online as usual, and earn cash back effortlessly.
Rakuten earns a commission for directing you to the store where you shop, and they share a portion of that commission with you as a reward.
You can join Rakuten here.
11. Capital One Shopping
Capital One Shopping is an app that helps you save money while you shop online.
You don’t need to be a Capital One customer to use it. Just download the browser extension and start using it right away.
This automatic savings app stands out because it requires no extra effort on your part. The Capital One Shopping app automatically searches for and applies the best coupon codes as you check out, making sure that you get the most savings possible on your purchases.
You can learn more about Capital One Shopping here.
12. Fetch Rewards
Fetch Rewards is a fun way to earn rewards from your shopping receipts. You just take pictures of your receipts using the app and you get points.
I use Fetch Rewards all the time and it takes less than one minute to earn points. This mobile app is incredibly user-friendly and one of my favorites. I’ve been using it for a while now, and it’s super easy to earn rewards on the shopping you’re already doing.
With Fetch Rewards, you earn points by scanning receipts from any store – whether it’s a grocery store, clothing store, restaurant, or gas station. Then, you can redeem your points for gift cards to places like Target or Amazon, as well as other rewards.
Here’s how Fetch Rewards works:
Shop like you normally would.
Scan your receipt after you’re done.
Earn points on Fetch Rewards.
You can sign up for Fetch Rewards here.
You can also read my review at My Honest Fetch Rewards Review.
13. Robinhood
Robinhood is a popular app for investing in stocks, cryptocurrency, options, and exchange-traded funds (ETFs). It’s easy to use and has no fees or commissions, which makes it great for beginners.
Plus, Robinhood’s app is simple and clean. You can see your investments and track their performance easily.
Robinhood also allows you to buy fractional shares. This means you can invest in expensive stocks with just a few dollars.
You can even invest in dividend-paying stocks on Robinhood.
When you invest in dividend-paying stocks, you’re buying a piece of a company that gives you money regularly. Think of it like getting a small thank you for holding on to the company’s stock. These payments usually come from the company’s profits and they’re called dividends.
Here’s a vehicle I rented on Turo when I was visiting Hawaii. The person I rented from had many, many vehicles listed on the site and it seemed to be a good passive income stream for them.
14. Turo
Turo is an app that lets you rent out your car to make extra money. It is a peer-to-peer program where you cut out the middle person and rent out your car.
With Turo, you can earn about $500 or more per month with just one car. If you own a couple of cars, you might make over $2,000 per month. Your earnings depend on the type of car and how often it’s rented.
Just like renting out your RV when you’re not using it, you can also rent out your car!
It’s a cost-effective option compared to traditional rental car companies for customers, and it’s a great way to earn extra money if you’re working from home and your car isn’t in use or if you have a two-car household.
I have rented cars a few times on Turo and I have always had a good experience. It looks like a possibly good way for a person to make money.
15. M1 Finance
M1 Finance is an app where you can earn passive income.
Some of the ways you can earn passive income through this app are by investing your money in the stock market (you can customize your investment portfolio with over 6,000 stocks and ETFs) as well as saving your money in their high-yield account (at the time of this writing, their high-yield savings account rate was 5.00%).
16. Masterworks
Masterworks is an app that lets you invest in fine art.
You don’t need to be wealthy to own a piece of famous art. Masterworks purchases valuable paintings and you can buy shares in these artworks. When the painting is eventually sold, you receive a portion of the profit.
Frequently Asked Questions
Below are answers to common questions about passive income apps.
How can I make $1000 a month passively?
There are many ways to make $1,000 a month passively, such as by renting out a space on Airbnb or Neighbor, renting out a car or RV, investing in an investment app such as Masterworks or Robinhood, and more.
Can you make passive income from an app?
Yes, you can make passive income from an app. Some passive income apps include Neighbor, RVshare, Freecash, and M1 Finance.
How can I make passive income from my phone?
You can make passive income from your phone by installing apps that pay you for different things, such as renting out your stuff, getting cash back, or investing your money. For instance, Honeygain pays you for sharing your internet data, while Rakuten gives you cash back for shopping. These apps run in the background, requiring minimal effort from you once set up.
How to make $5,000 a month passively?
You can make $5,000 a month passively by investing more of your money in different kinds of investments, such as stocks and rentals. It may take some time to get to $5,000 a month in passive income, but it is possible.
What are the highest-paying passive income apps?
The highest-paying passive income apps depend on how much time, effort, and money you put into it. But, generally, passive income apps where you are investing your money (such as in the stock market) or renting out things you own (like a property rental or vehicle rental) typically pay the most.
What are some free passive income apps?
Free passive income apps include Freecash, RVshare, Neighbor, Airbnb, Honeygain, Rakuten, and Acorns.
Best Passive Income Apps – Summary
I hope you enjoyed this article on the best passive income apps.
As you can see, there are many ways to make money with passive income apps. Some will allow you to earn simply some spare cash, whereas others you may be able to build up and eventually earn a full-time income.
Some may require you to invest your money up front (like Fundrise), and some of them are free passive income apps (like Honeygain or Fetch Rewards).
The best passive income app depends on what you are looking for, the amount of time you have, and the amount of risk that you want to take on.
Los Angeles-based Dunmor, a technology-enabled lender that specializes in loans for residential real estate investors, has added a pair of experienced executives in the business-purpose lending space.
The company announced Monday that it hired Tuam Pham as chief marketing officer and Steve Huff as senior vice president of asset management and servicing.
Pham has 23 years of marketing experience in the real estate and finance sectors. He previously served eight years as chief marketing officer at CoreVest Finance, where helped the lender surpass $20 billion in loan volume. Along with connecting the firm to potential clients through marketing, branding and communications, he also led the launch of a customer experience portal and other tech-based innovations.
Huff has spent 20 years in the real estate industry, including 11 years with Wedgewood, a former parent company of CIVIC Financial Services. He previously managed a portfolio of business-purpose loans and nonqualified mortgages with a value of more than $2 billion. Huff has also worked in the whole loan investment sector on pricing, due diligence, portfolio surveillance and loss mitigation.
Dunmor is a nationwide lender founded in 2021 that offers several types of investment loans, including short-term bridge financing, fix-and-flip loans, ground-up construction loans, and rental financing for single-family and multifamily properties.
A self-directed IRA (SIDRA) allows you to save money for retirement on a tax-advantaged basis while enjoying access to a broader range of investments. Opening a self-directed IRA for real estate investing is an opportunity to diversify your portfolio with an alternative asset class while potentially generating higher returns.
Using a self-directed IRA to invest in real estate offers the added benefit of either tax-deferred growth or tax-free withdrawals in retirement, depending on whether it’s a traditional or Roth IRA. Before making a move, however, it’s important to know how they work. The IRS imposes self-directed IRA real estate rules that investors must follow to reap tax benefits.
What Is a Self-Directed IRA?
Individual Retirement Accounts (IRAs) allow you to set aside money for retirement with built-in tax benefits. These retirement accounts come in two basic forms: traditional and Roth.
Traditional IRAs allow for tax-deductible contributions, while Roth IRAs let you make qualified distributions tax-free.
When you open a traditional or Roth IRA at a brokerage you might be able to invest in mutual funds, exchange-traded funds, or bonds. A self-directed IRA allows you to fund your retirement goals with alternative investments — including real estate.
You can do the same thing with a self-directed 401(k).
Self-directed IRAs have the same contribution limits as other IRAs. For 2024, you can contribute up to:
• $7,000 if you’re under 50 years of age
• $8,000 if you’re 50 or older
Contributions and withdrawals are subject to the same tax treatment as other traditional or Roth IRAs. The biggest difference between a self-directed IRA and other IRAs is that while a custodian holds your account, you manage your investments directly.
Boost your retirement contributions with a 1% match.
SoFi IRAs now get a 1% match on every dollar you deposit, up to the annual contribution limits. Open an account today and get started.
Only offers made via ACH are eligible for the match. ACATs, wires, and rollovers are not included.
💡 Quick Tip: Want to lower your taxable income? Start saving for retirement with an IRA account. With a traditional IRA, the money you save each year is tax deductible (and you don’t owe any taxes until you withdraw the funds, usually in retirement).
How Self-Directed IRAs for Real Estate Investing Work
Using a self-directed IRA to invest in real estate allows investors to invest in various funds or securities that, themselves, invest in property or real estate. Those securities may be real estate investment trusts (REITs), mutual funds, or ETFs focused. Investors with self-directed IRAs can, then, direct retirement account funds toward those securities.
Other types of real estate investments can include single-family homes, multi-family homes, apartment buildings, or commercial properties — actual, physical property. For investors who do want to buy actual property using an IRA, the process generally involves buying the property with cash (which may require them to liquidate other investments first), and then taking ownership, which would all transact through the IRA itself. It’s not necessarily easy and can be complicated, but that’s the gist of it.
With that in mind, the types of investments you can make within an IRA will depend on your goals.
For instance, if you’re interested in generating cash flow you might choose to purchase one or more rental properties using a self-directed IRA for real estate. If earning interest or dividends is the goal, then you might lean toward mortgage notes and REIT investing instead.
The most important thing to know is that if you use a retirement account to invest in real estate, there are some specific rules you need to know. For instance, the IRS says that you cannot:
• Use your retirement account to purchase property you already own.
• Use your retirement account to purchase property owned by anyone who is your spouse, family member, beneficiary, or fiduciary.
• Purchase vacation homes or office space for yourself using retirement account funds.
• Do work, including repairs or improvements, on properties you buy with your retirement account yourself.
• Pay property expenses, such as maintenance or property management fees, from personal funds; you must use your self-directed IRA to do so.
• Pocket any rental income, dividends, or interest generated by your property investments; all income must go to the IRA.
Violating any of these rules could cause you to lose your tax-advantaged status. Talking to a financial advisor can help you make sense of the rules.
Pros and Cons of Real Estate Investing Through an IRA
Using a self-directed IRA for real estate investing can be appealing if you’re ready to do more with your portfolio. Real estate offers diversification benefits as well as possible inflationary protection, as well as the potential for consistent passive income.
However, it’s important to weigh the potential downsides that go along with using a self-directed IRA to buy real estate.
Pros
Cons
• Self-directed IRAs for real estate allow you to diversify outside the confines of traditional stocks, bonds, and mutual funds.
• You can establish a self-directed IRA as a traditional or Roth account, depending on the type of tax benefits you prefer.
• Real estate returns can surpass those of stocks or bonds and earnings can grow tax-deferred or be withdrawn tax-free in retirement, in some cases.
• A self-directed IRA allows you to choose which investments to make, based on your risk tolerance, goals, and timeline.
• The responsibility for due diligence falls on your shoulders, which could put you at risk of making an ill-informed investment.
• Failing to observe self-directed IRA rules could cost you any tax benefits you would otherwise enjoy with an IRA.
• The real estate market can be unpredictable and investment returns are not guaranteed — they’re higher-risk investments, typically. Early withdrawals may be subject to taxes and penalties, and there may be higher associated fees.
• Self-directed IRAs used for real estate investing are often a target of fraudulent activity, which could cause you to lose money on investments.
Using a self-directed IRA for real estate or any type of alternative investment may involve more risk because you’re in control of choosing and managing investments. For that reason, this type of account is better suited for experienced investors who are knowledgeable about investment properties, rather than beginners.
Real Estate IRAs vs Self-directed IRAs For Real Estate Investing
A real estate IRA is another way of referring to a self-directed IRA that’s used for real estate investment. The terms may be used interchangeably and they both serve the same purpose when describing what the IRA is used for.
Again, the main difference is how investments are selected and managed. When you open a traditional or Roth IRA at a brokerage, the custodian decides which range of investments to offer. With a self-directed IRA, you decide what to invest in, whether that means investing in real estate or a different type of alternative investment.
💡 Quick Tip: Did you know that opening a brokerage account typically doesn’t come with any setup costs? Often, the only requirement to open a brokerage account — aside from providing personal details — is making an initial deposit.
Opening an IRA With SoFi
Opening a self-directed IRA is an option for many people, and the sooner you start saving for retirement, the more time your money has to grow. And, as discussed, a self-directed IRA allows you to save money for retirement on a tax-advantaged basis while enjoying access to a broader range of investments, including real estate.
Once again, using a self-directed IRA to invest in real estate offers the added benefit of tax-deferred growth and tax-free withdrawals in retirement. There are pros and cons, and rules to abide by, but these types of accounts are another option for investors.
Ready to invest for your retirement? It’s easy to get started when you open a traditional or Roth IRA with SoFi. SoFi doesn’t charge commissions, but other fees apply (full fee disclosure here).
For a limited time, opening and funding an Active Invest account gives you the opportunity to get up to $1,000 in the stock of your choice.
FAQ
Can you use a self-directed IRA for real estate?
You can use a self-directed IRA to invest in real estate-related or -focused securities and other types of alternative investments. Before opening a self-directed IRA to invest in real estate, it’s important to shop around to find the right custodian. It’s also wise to familiarize yourself with the IRS self-directed IRA real estate rules.
What are the disadvantages of holding real estate in an IRA?
The primary disadvantage of holding real estate in an IRA is that there are numerous rules you’ll need to be aware of to avoid losing your tax-advantaged status. Aside from that, real estate is less liquid than other assets which could make it difficult to exit an investment if you’d like to remove it from your IRA portfolio.
What are you not allowed to put into a self-directed IRA?
The IRS doesn’t allow you to hold collectibles in a self-directed IRA. Things you would not be able to hold in a self-directed IRA include fine art, antiques, certain precious metals, fine wines, or other types of alcohol, gems, and coins.
Photo credit: iStock/SrdjanPav
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What do you think of when I say, “smart with money”?
Do you remember any significant life events such as landing your first job after college or signing up for a lucrative opportunity to invest in the stock market?
Most likely not.
Because those didn’t happen until later on in life and we were already smart with our money by then. But there was no rocket science behind it: we just learned about saving and investing early on and took action that eventually yielded positive results.
And if you didn’t, there is no need to fret. You are in the right place and everyone has to start somewhere.
It’s not long before you start to wonder how much richer your life and bank account would be if you had started earlier.
So, let’s do a reality check: what is the difference between investing 10 minutes per day and putting $10 into an investment each month?
A sensible answer would be that investing 10 minutes per day is worth $1,000 in a year.
Your time has value and you are getting richer by the minute!
So, what are you waiting for?
Let’s learn how to be smart with money.
How to Be Smart with Money
Money touches nearly everything we do in our modern society.
It’s what keeps the wheels of commerce turning and enables people to get by without physical labor, so it is important that you know how to manage your finances well.
To be smart with money means understanding its power and spending on what matters most for your life goals.
You need to make sure you are paying for your day-to-day expenses while saving for emergencies, retirement plans, and long-term investments like a home or college education.
Money helps us to achieve our goals and dreams, increase our quality of life, and buy everything we need or want.
If you’re just starting out with your finances then this article is for you! I will give some basic steps on how to be smart with money.
In other words, this article is a crash course on how to make your money work for you! You’ll learn what financial independence means and why it’s important to have a large enough nest egg. Read more now!
Why You Need to be Smart with Money
This is exactly how can I be wise with money.
The most important thing is to cultivate the habit of saving money. The fact that you are reading this article likely means that you understand how important it is, but if not then it’s time for some serious change! If your goal in life is security and doing something meaningful with your life, then building wealth will be a significant step towards achieving those goals.
When we have enough money saved up, we can start investing our funds into different assets such as stocks or real estate so that they grow and compound. The more money we have, the more freedom and control we will gain over our lives.
There are many ways to be smart with money. Here are some suggestions that can help you save, invest, or earn more money.
7 Steps to Be Smart with money
It’s not easy to be smart with money, but it is possible.
Start by building a budget and identifying your spending habits. It takes time and hard work, but once you’re on track for saving money consistently over the long-term, you will find yourself in a much better position financially than those who are constantly struggling or living paycheck to paycheck.
Here are the exact steps to follow:
Step #1: Set Goals
Set goals for yourself. It’s important to have clear, measurable, attainable goals that you will be able to achieve in order to keep your motivation up when you are working towards them.
In order to have a better future, it is necessary to start saving for the future now and not wait any longer.
Set goals and save money every month so that when your goal is achieved, you can spend more time enjoying what life has in store for you.
In order to set goals, it is best to reflect on what you want in your life.
What do you want to know?
Who do you want to be?
What do you want to experience?
What is your purpose in life and how will this help you get what you want?
It’s also important to make a plan for achieving these goals.
For instance, if you want to be a millionaire, what are some steps that you can take today? Maybe it means getting more education or saving up for retirement.
You have the power to set goals and make plans to achieve them.
Action Step: Dig deeper into making smart financial goals.
Step #2: Managing your Budget
A budget can be a valuable tool for managing your money and preventing financial stress.
More importantly, to become smart with money is to create a budget that you can follow. You should also save your money, especially if you want to build wealth.
Managing your budget is a step-by-step process that requires you to have a budget.
You should start by setting up a spreadsheet to track your income and expenses. The next step is to create a budget that reflects your financial situation. You can use an online Google Sheet, Microsoft Excel spreadsheet, or personal finance software like Quicken.
Action Step: Dig deeper into how to make a budget.
Step #3: Paying Off Debts (non-mortgage debts)
Dealing with debt is difficult enough, but it can be made easier by paying off your monthly payments.
Paying off debts is the process of getting rid of outstanding debt and freeing up cash flow. This can be done by creating a plan to get out of debt, avoid taking on smaller manageable debts or simply by not spending as much.
Pay off your high interest debt first, such as credit cards and loans. This will help reduce the amount of interest you pay each month.
When you are able to pay off your debts on a regular basis, the interest rates will go down and this will save money in the long run.
Paying off debt faster and building wealth is easier than ever by following this action step below.
Action Step: Dig deeper into how to get out of debt.
Step #4: Save More Money
Save more money is a step in the process of achieving financial independence.
Saving money and building wealth is something that anyone can do. Once you get into the habit of saving money, it becomes easier to increase your savings rate or build up an emergency fund.
This step involves taking on additional work and increasing your income so that you can save more. By saving more money, you will be able to reach financial independence faster.
It is important to create an emergency fund and invest in a money market account. This allows you to save for future goals and emergencies with less risk, as well as build wealth faster.
Action Step: Pick a money saving challenge for you!
Step #5: Track Expenses
Track expenses is a phrase that means to collect or record the money that you spend on various things over a given period of time. This includes bills, groceries, and anything else expenditure-related.
Track your spending or review debit/credit card transactions and receipts to begin to understand where your money is going.
This will help you stay on top of what you are spending so that you can be more efficient with your finances.
Track your spending habits to find the big leaks in your wallet. You should know what you are spending money on, where it is going and how much you spend.
For at least a month, track your expenses in order to get a better understanding of where you can save. This will help you set goals and make conscious decisions about money management.
Action Step: Try a no spend month to prioritize your spending.
Pick a money saving challenge for you!
Step #6 – Increase Income
There are numerous ways to increase your income. You can increase your income by working more hours, starting a side business, or taking on additional responsibilities at work.
The fastest way is to think of businesses, products, or services that people want – use Google to find the products and advertise your niche. The benefit of working for yourself is there are no income limits on what you can make.
Many people want to make money online, but most of them need help figuring out how to do it.
To start, you need to figure out what your skills are and then find a niche that is in demand. For example, if you have good writing skills, it might be best for you to try blogging or find freelance work.
Don’t give up. If you want to make a lot of money, you have to put in the time and effort!
Action Step: Find ways to make money fast.
Step # 7: Invest Wisely
Investing wisely is the act of making investments that will provide positive returns.
Investing in stocks, bonds, or other types of securities can be risky, but it can also make you rich. Investing wisely means understanding the risks and rewards of your investment.
If someone asked you, “What is the smartest thing to do with your money?” The loud answer is to invest money consistently.
Investing early on and taking action eventually yielded positive results.
Investing is a marathon and not a sprint, so we need to start small and take it one day at a time.
Investing in a variety of assets is the best way to maximize your returns. Invest only in what you know and understand, invest for the long term, and diversify investments.
Action Step: Learn how much you can make in stocks.
10 Simple Smart Money Tips
On Reddit personal finance, you can find hundreds of answers to what is a money smart person, which is great but can be overwhelming.
Smart money tips are a great way to build wealth and get rich faster. These smart money tips will help you learn more about personal finance, save time on your monthly expenses, and grow savings for the future.
Here are specific ways you can become money smart today:
1. Build an Emergency Fund
An emergency fund is a savings account that’s been set aside for the unexpected.
It is used to cover emergencies, such as car repairs or medical emergencies, and can also be used when you have a job that doesn’t offer health insurance.
It’s important to set up an emergency fund because unexpected situations can happen at any time, and you won’t be able to use your credit cards or other debt to pay for them.
2. Save for Larger Purchases and Expenses
Save for larger purchases and expenses is a financial planning strategy that entails saving a certain amount of money each month to put towards future, much bigger purchases or expenses.
It’s important not to spend all of the money you save, as it’s possible that the future expense will not come to fruition.
This is exactly how you stay out of debt.
3. Steer Clear of Debt
Keep your debt low, and pay it off when you can.
Good debt is debt that will help you reach your goals in the future or help build a business. Bad debt is debt that you will not be able to pay back, and if you default on this type of debt, it can have a huge impact on your credit score.
To get out of debt, figure out how much you owe on various debts and decide what to do with the money.
4. Start Investing for Retirement
Many people have a hard time saving for retirement. This is unfortunate because of the power of compound interest, which means that you will earn more money on your investment over time.
Start saving 15% of your income as soon as you can for retirement. This will allow for passive income later in life.
The best way to start investing for retirement is by setting up a Roth IRA.
You can then invest your money with low or no fees and earn tax-free returns until you retire.
This means every time you get a raise, put that extra cash into an account that will be used for your retirement.
5. How to Save for Kids’ College
There are a few different ways to save for kids’ college. One way is to pay for their education through a 529 plan, which is a tax-advantaged savings account that allows you to save for college expenses. Another way is to use a mix of tax-advantaged and taxable investments like an IRA or 401(k), which will take some time to build up your savings but will allow you to invest in stocks, bonds, mutual funds, and other investments that are safe for retirement.
The best way to save for your kids’ college is to start saving early.
Also, you need to check out this scholarship program to lower the cost of college.
6. Find a Good Credit Card
Credit cards offer the best interest rates on purchases, and they’re easy to find with little risk. Apply for one that charges no annual fees and offers a balance transfer promotion.
Even better, you want a credit card that offers you cash back on your purchases.
7. Talk about Money
In order to be smart with money, it’s important that you talk about finances and learn from them. You can normalize talking and learning about finance by using a planner or financial statements.
It also helps to meet up with other people who have similar values in the community so they can help support your journey towards wealth building.
By talking openly about finances and learning how to be smart with money, it helps people get wealthy.
8. Learn about Money
Money is a topic that most people know little to nothing about, and it can be hard to get started.
However, Money Bliss provides some helpful tips on how you can begin building your wealth in the simplest way possible.
Wealthy people are getting richer by staying up to date with money matters.
Building wealth starts with thinking about your finances the right way. It’s not about losing weight or running a marathon; it’s about how we use the resources we’re given and the smart money management skills we need to get what we want out of life.
9. Know the Purpose of Money
Most people believe that it is “the key to happiness” to have enough money, but studies show this is not true.
We know money does not buy happiness, but it doesn’t mean you should live without it.
In fact, you need to know how money helps you find time freedom.
Time freedom is a relativity new concept; yet, it is the driver behind finding happiness with money.
10. Be Aware
Awareness of spending habits, saving, and donations are all examples of smart money skills.
By understanding how your current income is allocated to different expenses–including the ones you can’t control like mortgage rates or gas prices–you’ll learn what really drives your monthly budget.
When it comes to money, you should be smart about your spending habits. By doing this, you will have a better understanding of how much money is coming in and going out so that you can save more or donate more.
You should also know the difference between saving for the future vs living day-to-day expenses because these are two different things.
There are many perspectives on how to manage money. And honestly, there isn’t one opinion that dominates from another.
That is why investing in yourself to read some of the best books on how to manage money is key to long-term financial success!
While many of the concepts may be similar, there is ALWAYS something unique I learn after reading each book.
Happy reading!
Photo Credit:
amazon.com
Hands down this is one of my favorite books on how to manage money of all time.
The reason is simple.
It is easier to follow regardless of your background, knowledge of personal finance, or love/hate relationship with numbers, and money savviness.
You cannot learn how to manage money successfully without reading this book. This is one of the best gifts that you can give.
Key Takeaways – Creating your F-you fund will dramatically change your financial independence and your future.
Photo Credit:
amazon.com
This book by David Bach is the inspirational story you need when motivation is low to stay on budget.
You learn the secret to automatically secure your future – all through automatically saving money. This is a real system that any person can follow.
If you are struggling to stay on course and motivated, then you need to pick up this book. Once you read it, then pass it along to a friend to keep the motivational and accountability train going.
Key Takeaway – Automatically saving 10% early on will guarantee your millionaire status.
Photo Credit:
amazon.com
This book covers every aspect of money from debt, saving accounts, automating finances, set-it-and-forget it investment strategy, how to handle big purchases (car, house, wedding, kids) plus how to negotiate a raise at work.
These are the basic principles on how to manage money that needs to be taught in school. Call this book your beginner’s guide on managing your finances and setting yourself up for long term success!
Take control of your financial situation. By becoming active, you don’t have to continue to hold for a magically change.
Make sure you get the 2nd edition that was revised in 2019.
Key Takeaways – Ramit Sethi, the author, provides you word-for-word scripts that will save you thousands of dollars on loan interest and lowering all of your expenses. That alone is worth the $9.
Photo Credit:
amazon.com
The goal is to become financially independent as quickly as possible.
This is something the author Grant Sabatier has achieved and retired at the age of 30.
He offers counter-intuitive advice about money so that you can actually live the life you want. This FI movement is picking up speed and something that you shouldn’t ignore regardless of your age.
Key Takeaways – You will not walk away from reading this book the same person.
Photo Credit:
amazon.com
This is what we all dream of… be set for life. Not to have to worry about the next paycheck coming in. Running out of money each month. You want money in the bank and the freedom to do what you want to do.
Become set on escaping the 9-to-5 grind and lay a solid foundation with money. According to the author, Scott Trench, you must be willing to work harder and smarter than the average person.
Find the motivation to conquer your financial goals early on.
Key Takeaway – Be prepared to start saving 50% of your income while still enjoying life’s luxuries at a younger age.
Photo Credit:
amazon.com
This recent release is about how you behave with money. The decisions that are made on the go and not when looking at a spreadsheet.
The book is filled with 19 short stories on how emotions play such a big part with how we handle money. Everyone handles money and investing differently and that is okay, but learning how to know what works for you.
Key Takeaway – This book is meant to be thought provoking on why we do silly things with money.
Photo Credit:
amazon.com
This is the perfect book for beginners written by a (retired) millennial.
You will walk away with a solid understanding of budgeting and why tracking your net worth will boost your money management efforts.
She puts everything into simple terms and provides uncomplicated and realistic solutions to handing your finances.
Key Takeaway – This book is loaded with sass and humor, so you will find the lessons upbeat and honest to a normal dreary topic of personal finance.
Photo Credit:
amazon.com
The long term reason to save money today is to not work for years. If you want a drag on your portfolio by using a financial investor, then don’t read this book.
If you want a classic guide on getting smart about the stock market and becoming financially independent, then this book is for you.
The author teaches how to make index fund investing work for you and help you to achieve your financial goals. Plus with having little risk.
Key Takeaway – The investment scene doesn’t have to be scary and confusing after learning the basics of investing and creating a simple portfolio.
Photo Credit:
amazon.com
One of the best ways to build income is to become your own boss whether, through a side hustle, real estate investing, or building a business. However, too many times expenses swallow business before they ever churn a profit back to the owner.
Mike Michalowicz will lays out the Profit First Formula, which will transform any business on the way they manage money.
This is a must-read for anyone owning their own business, a board member for a corporation, or looking to start their own business. This is how you build a sustainable, no-ceiling income.
Key Takeaway – You will finally know how much you have to invest in your business and always take home a profit.
Photo Credit:
amazon.com
The last book on the top 10 best books to manage money isn’t even focused on money!
It is how we handle and deal with our stuff. Unfortunately, buying all that stuff comes at a cost and normally a big price tag. Plus the cost to maintain the stuff we already own.
The book by Joshua Becker helps you to open your eyes to a slightly different lifestyle that may change your life forever.
Key Takeaways – By learning to live with less stuff, there is more money in our budget to spend on other things or experiences.
Ready to Be Smart with Money?
Being smart with your money is about making good choices.
It’s important to know what you need and what you don’t because if you spend too much on things that aren’t necessary, you’ll never save enough to buy the things that are important to you.
Becoming rich and building wealth is all about making smart choices!
You need a goal, sometimes called an objective or an endpoint, and you need to set up a plan.
There are many steps that can help you be smart with your money. For example, never save for “a rainy day”; instead save for all the days.
The steps to be smart with money are not difficult, but the effects of being smart with your finances will last throughout your life.
Know someone else that needs this, too? Then, please share!!
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More importantly, did I answer the questions you have about this topic? Let me know in the comments if I can help in some other way!
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