No Time For a Budget How to Create a Better Income Statement
Personal Budget – Not
No Time For a Budget; How to Create a Better Income Statement. Many folks who use a personal budget to create an ideal financial scenario are not linked to the truth. For instance, people spend too much time fudging the numbers regarding income or expenses.
No Time For a Budget How to Create a Better Income Statement
What is a personal income statement?
An income statement is a financial statement that measures your financial performance over a given period (i.e., Month or Year).
Assessing Your Financial Results
Your financial results are assessed by how you summarize your income/revenues and expenses through operating and non-operating activities.
As we go on this investment real estate journey together, I will challenge you to look at everything you do financially.
When you consider your purchase or buying a piece of investment real estate, you go from a typical real estate life (Home Owner) to an entrepreneur or a small business owner.
Making a small change to how you set up your income statement and net worth (or personal balance sheet) will help your future mindset.
Keys to a New Investment Way of Life:
No Time For a Budget; How to Create a Better Income Statement
However, when you start to think about or purchase investment real estate, everyone you contact will assess who you are differently. In this situation, I am talking about lenders who will no longer look at you on a one-off basis. Buying a home for your personal use and life is one thing. However, purchasing investment real estate to generate revenue and house others is an entirely different story.
KISS Method – Keep It Simple Solution:
No Time For a Budget; How to Create a Better Income Statement
People get bogged down trying to develop a better mousetrap and never get beyond just doing.
Using a “Simple Solution” to the personal income and expense spreadsheet is not complicated.
Add one line to your income and expense sheet titled Investment real estate; therefore, don’t get caught up in your lack of investment real estate. Get used to the fact that we are showing investment real estate on your income and expense spreadsheet.
If you are an Excel software expert, that would be great. However, don’t complicate my message, create analysis paralysis or critical eye analysis, and take your eye off the goal.
Before considering a personal budget, I challenge you to download the individual income and expense spreadsheet. You will find a spreadsheet on our website entitled; “The Investment Real Estate Way©” Starter Kit. https://www.vaulttoinvestmentrealestatesuccess.com
The Investment Real Estate Way© Starter Kit Components:
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Income and Expense Statement
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Net Worth Statement
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Vault to Investment Real Estate Success Checklist
Many sites try to upsell or have you pay for a template they created. I have made a model in Excel, and you can download it and modify it ( I didn’t lock any cells) to fit into your life; you should only have to make a few additions or deletions, and away you go.
Once you have your income/expense statement, please fill it out for the next three months right down to the penny. Do not prepare a budget; a real-life income and expense statement is your reality check and shows your actual income and expenditures; it will take you three months to see the truth, the whole truth, and nothing but the truth. Time goes by fast as you prepare for your investment real estate life; start your income and expenses spreadsheet now.
Your Financial Truth
What kind of result should you look for when analyzing your income and expense spreadsheet; total income minus total expenses gives you a positive net income; in other words, you should have money in the bank at the end of each month.
When you visit the bank to borrow funds for investment real estate, the bank will not care if you have a personal budget; they want to see your actual numbers, and one month’s record of your income and expense statement is not enough evidence for the bank.
Someone Else’s Financial Sandbox:
No Time For a Budget; How to Create a Better Income Statement
One of my mentors, Peter Kinch, has a saying; “Always remember you are playing in the bank’s sandbox, and you have to play by their rules.”
Most of us have to use the bank and their money to start our investment real estate business. Understand the bank’s rules and know what they will ask. How do you think the bank or your lender will feel if they don’t have to chase you for information?
It would help if you prepared before your appointment with them.
Most banks or lenders don’t have the time to educate you; show them you are an expert and professional in your finances.
Having a well-documented history of your income and expense personal statement is part one. In the next blog on Building a Strong Financial Foundation, we will discuss part two, your net worth statement.
Hatching A Small Investment From Your Income and Expense Statement
I want you to focus on the funds left over at the end of the month; if you start here, you don’t need a plan. Once you have tracked three months of your income and expense statements, you will see money left over at the end of the month, or you will find yourself in negative territory with no money in the bank.
In an upcoming blog, we will discuss how to make your positive cash flow grow into a downpayment on an investment real estate property.
In other words, how do you regain your Humpty Dumpty finances?
What is your income story and your expense story? In conclusion, how it ends is up to you.
The challenge is not to spend your precious time planning; the goal is to get you into an automated plan to build a robust financial foundation, unlocking sustainable wealth and a living legacy.
Are you ready to take control?
About the author, W. Rick
Dynamic entrepreneur and sales management strategist; with over 20 years of experience in his field. Rick has achieved multimillion-dollar sales growth while providing award-winning sales leadership and coaching in highly competitive markets.
An active real estate investor since 2002, Rick has developed his purchasing strategies and processes specializing in vacation and recreational properties, single-family homes and condo rentals.
In 2005, Rick re-financed his first rental property to fund the purchase of more positive cash flowing rental properties.
Rick sits on the Board of Directors for several condominium associations and is an active President and Treasurer. Sitting on these boards has given him a wealth of experience and insight into working with property management companies.
Rick has partnered with several joint venture associates and is committed to creating a positive investing experience for his associates by finding the properties, developing the investment, securing the financing and executing a proven positive cash flow system.
Why should you choose Rick as your Online Vault to Investment Real Estate Success Advisor?
An outstanding mentor and coach, Rick will work with you to build your investment real estate business starting from the foundation. From guiding you through the market research and critical drivers, building your team of trades, realtors, and lenders to attracting the investment real estate properties right for your portfolio and the joint venture partners to help you grow.
Through direction and training, Rick will help you develop your investment real estate goals and be a catalyst for you to purchase your first investment real estate property so you can build a strong financial foundation unlocking sustainable wealth and a living legacy for you and many generations to come.
Thank you for taking the only asset that gives us so much through life, but we can never get back our time.
Please join Rick on living his mantra:
” Prosperity for all aspects of your life forever.” W. Rick Harris
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