FINANCIAL FREEDOM

Your complete guide to achieve financial freedom. Proven tips, tools and tactics for you to achieve financial freedom. Make money, save money and effectively manage your money.

True Financial Freedom - See The Big Picture

Written by Dian Herdiana on 8:23 AM

If you are wondering how to create true financial freedom, the first thing you need to decide is what financial freedom means to you. Does it mean that you have enough money to live on without having to work 40 or more hours a week or does it mean more than that. Does it mean having a vacation home, a different car for everyday of the week, or a yacht on Mediterranean.

Some people know how to dream big and have come up with ways to make those dreams come true. Some other people know how to dream big but can't seem to find a foothold on the up slope. They have great ideas, several that may be million dollar ideas but,in fact, do not have the means to do anything with these great million dollar ideas. Some people just do not know how to dream at all. They think that financial freedom means having to work your entire life and retiring with a pension and social security.

There is no right or wrong answer here, true financial freedom is whatever you want and need it to be. Figure out what you want your lifestyle to be like if you were financially free then calculate what that lifestyle will cost. Do you want to live in the South of France, or how about Tuscany, or maybe you just want to be comfortable in the house you currently own without having to worry about any more mortgage payments. That would be nice, huh?

Take what you already have like investments, savings, retirement accounts, etc. and compare it to what you want to see how much you need to fill the gap in between the have and the want. Once you have this number you can work toward that goal either by working more, spending less, or finding other streams of income that work for you.

Learning to invest in real estate and having rental properties is a good way to create a passive income stream that works for you. Passive income is great because it is income that you earn anytime whether you are working, playing or sleeping. The more passive income you can make the faster you will gain financial freedom.

Always keep the big picture in mind and the reasons why you want to gain financial freedom. Do you want to spend more time with your family, travel and take the vacation of a lifetime, or buy your dream car? Or, is it just something as simple as not worrying about how the next bill that comes in the mail is going to get paid?

You can achieve whatever it is that you want, all you have to do is want it badly enough and you will find a way to get it. So many people have lost their jobs, their homes, and their self-esteem in this down-turned economy, so why not take a chance on yourself and dare to do something different, dare to think outside the box and take a risk or two, what do you really have to lose. All you have to gain is true financial freedom.

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Why People Invest In Real Estate

Written by Dian Herdiana on 5:36 AM

Many people know that real estate investing is very lucrative. For that reason alone, will make people want to get their share of the pie. They know that this is a great way to build wealth, not only for them, but they can also pass it down to their future generations.

In addition to having monthly rental income, there are other factors that contribute as to why people invest in real estate. Some of them include:

• With appreciation of rental properties, there will be increased value. In turn, this could help with the selling and reinvesting in properties that already have a higher value. Appreciation of rental properties can also make way for an equity line of credit for future use.

• Speaking of equity, you as an investor can invest in sweat equity, which involves making improvements to your real estate property. It doesn’t have to be so far out where you end up spending a lot of money.

This can help the value of your property go up faster than it would have if you had not made improvements. So, if you spend $3,000 on cosmetics and miscellaneous items, then the value of the property could be double or more of the amount you spent on improvements.

• Being a real estate investor during inflation times is not necessarily a bad thing. Even though rental payments increase during this time, your mortgage loan payments should remain the same. Because of this, you can have an increase in cash flow.

Another thing about inflation is that you can also gain more renters (if you have vacancies) because some people may not be able to secure mortgages during that time. Since you will have a greater demand for renters, the rent will also increase. This is part of the agenda of supply and demand.

• Using “Other People’s Money”, or “OPM”, is a good reason for people to invest in real estate. You can find a bank that will secure a loan for you for your real estate investment(s). The better your credit is, the better chance you have of securing a good fixed rate loan with low interest rates.

You can also look at zero-down loans, but that can be more risky. You would have to pay more in your mortgage payments because you didn’t include a down payment. So when the property appreciates, it will benefit you along with the monthly cash flow.

• Real estate investing is considered a business. You can use the expenses from it and deduct them from your taxes. Anything that your purchased, had repaired, any fees and anything else related to the investment in question.

Even if you have properties that are out of the regional area where you have to travel, those expenses can also be deducted from your taxes. If nothing else, being able to deduct expenses from your taxes is like a marriage made in heaven.

• Have you heard of getting cash that is tax free? Say you have an increase in rentals and you end up having a positive cash flow. The surplus can be used for other things. If it’s the right time, you may think about wanting to refinance the rental properties.

If you do that, you could secure a higher mortgage about $20 - $50,000 more than the original. You would pay off the initial mortgage, and have a nice surplus afterwards. The surplus would be considered tax-free money.

• The 1031 Exchange is named after Section1031 in the Internal Revenue Code. It discusses how real estate investors can hold off on capital gains taxes when selling one of their properties. There are three conditions that have to be met before the 1031 Exchange can go into effect:

1. It is a real estate property investment and not a main residence for the investor.

2. The real estate property can be swapped for a property of the same or similar kind.

3. In regard to replacement, there must be certain time frames in place and adhered to.

When an investor uses profits from another property sale and invest them in another property, they can hold off on capital gains for future real estate transactions. More than likely, the investor will work on getting additional equity and more income and profits from additional property rentals.

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