Real estate brokers and agents have countless reasons for entering the profession, but at the core, they likely all have one thing in common: they seek financial stability and potential wealth.
Financial stability is often table stakes for the most successful real estate professionals, but that doesn’t necessarily translate to wealth without clearly defining what that word means and having a strategy to accumulate it, according to Ben Kinney, co-founder of PLACE, Inc., a real estate technology firm.
Kinney spoke at RISMedia’s Real Estate Rocking in the New Year virtual event earlier this month, which gathered some of the industry’s most respected and influential minds, who came together to share their expert insights on how to generate more success this year and beyond.
During his session, Securing Your Financial Future, Kinney provided his definition of wealth and offered some salient advice on how to build wealth. “It’s the ability to do what I want, when I want, with who I want,” he said. “It’s freedom. Freedom is wealth and financial stability is that freedom.”
Kinney is passionate about the topic because he recognizes how financial problems can impact an individual’s health and wellbeing, so to turn that passion into actionable advice, he offered these four tips to get started:
- “It’s not rocket science,” Kinney admitted, but in order to increase net worth you need to spend less than you earn. Whatever is left over should be first used to pay off debts and liabilities and then you should invest the rest.
- Investing is the key driver of wealth, but Kinney suggested it should be done inside five major buckets, where 20% of your excess income is distributed equally.
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- Bucket 1: “Cash is king,” he said. Saving 20% of your excess income as cash can be used for unexpected emergencies and give you additional spending leverage when needed.
- Bucket 2: Financial instruments including your retirement account and IRAs, both of which Kinney suggested should be maxed out pre-tax, if possible. Then look to other key financial instruments, such as stocks, bonds, etc.
- Bucket 3: Real estate, “It’s what we do every day! You have a competitive advantage,” he said. Kinney advised to set a goal to buy five houses in 10 years and it could generate as much as $8 million in return in 30 years.
- Bucket 4: Invest in business, either your own, a friend’s or a family member’s.
- Bucket 5: This last one is up to you. Whether it’s paying off long-term debts, donating to charities, buying collectibles or investing in precious metals or, of course, crypto currencies, use that remaining 20% to help further diversify your investment portfolio.
- Become a student of wealth. Kinney recommended reading up on investing and wealth management and listening to experts who have proven track records.
- Set annual goals. Ultimately this is what will lead you to becoming wealthy. And, if you choose, allow you to retire when you want. Whatever the goals, if you outline them on an annual basis and stay laser-focused on achieving them, you will stay on track to achieving your definition of wealth.
Missed the event? Replays including every panel and expert interview are available here.
Caysey Welton is Content Director at RISMedia. Email him your real estate news ideas cwelton@rismedia.com.
