What is the best way to create a financial plan?

What all do you consider when making one?

Write down on paper what your short term and long term goals are. Then edit your list in order of importance. Then start to formulate an action plan.

For example when I was much younger I wrote down the following on my list:

New Car, Own a home, Have a business that produces profit, income and affords me an investment fund.

Finish College, Have 1 million in the bank, Have a large apartment complex making me thousands a month.

I quickly realized that having a new car would prevent me from buying a home sooner as opposed to later. New car now at the bottom of the list.

Then as I was investing I took tax classes, purchased books and went to seminars.

I saved myself over $100,000 the first years as a landlord because I learned the tax codes and used them for me and not against me.

YA gotta have a plan-- a goal and it needs to be written and placed strategically thought your home. I laughed at Roberts car mention. I never had a new car until I was 50-- that's right 50.

Knowing the tax code is critical-- you don't need to know it all-- get the Lasseter's tax guide and read the section on what your interested in. Like RE investing. I find it funny that people read the guide after the tax year has started. Read it 2 months before so you know what to schedule.

Most important to me: I can't make every deal win win and I stopped trying to 34 years ago. I also don't wait for the PERFECT DEAL cause it's not going to happen.

Plan one property the first year and see how it goes-- then 2 the next year-- find you niche and be the very best at it.

When I was buying VA foreclosures-- the man in Atlanta running VA told my wife and I. He hated dealing with us. WHY? he said you know more about the VA foreclosure process then the people working here-- I still love that.

Most critical- must be done WITH your partner/ spouse/ significant other, if you have one. And I highly recommend having a spouse/partner/ significant other. Very best financial decision we ever made.

what surprises me so much is how easily we as investors are distracted.

For me, I do what I do for the retirement. Yet, how much of what I do is actually in my 401 or IRA name? Only about 40% to one half........and if I am aware of this I think about others out there who can honestly answer - NONE. Or how do you do that?

Then again if a real estate investor doesn't invest in themselves, why would they expect to have long term success at this gig?

When it comes to financial planning, the best general advice I would give someone is: Ready, Fire, Aim.

Don't get yourself too stuck in the weeds that you start suffering from analysis paralysis. Too many people are so afraid of making mistakes that they never even do anything.

NE I use to get such a laugh out of the Ol' Carlton Sheets ads on TV. You know where the RE investors where bragging -- "I brought this 8 plex apt building and these 5 SFH's all for nothing down".

I would tell my wife those goofie jerks-- let's see the same people in 2 years (or less)

We were one of the original members of RAND in Atlanta. I can't tell you how many people never brought their first stick of RE. They were all waiting for that PERFECT DEAL. JB'S FIRST LINE ABOVE IS exactly on point. The board of that RAND group was a bunch of crooks also. For those who don't know RAND stood for ROBERT ALLEN NOTHING DOWN.

We did okay without a basic plan, largely because we're cheapskates. BUT - if I had it to do over, I'd educate myself about investing, and especially about non-retirement investing and ROTH IRAs, much sooner than we did.

Instead of being in very good financial condition in our 60's, we'd be much wealthier with planning and education.

So - as NE said, start now!

Great topic 6x6!

IMO it depends on your situation and your goals. If you’re wealthy it may be diversifying investing and tax planning

If you’re just starting out it may be paying off debt or it could be leveraging debt for another investment.

The key components are

1. Set your goals, what is it that you want?

2. Prioritize those goals. (Like Robert J said)

3. Set a plan and time frame to achieve it, there’s a million ways to get to the goal. Will you leverage debt? Maybe if you know a mortgage broker and can get a good deal. Finding your specific advantages and using those contacts/skills.

FOCUS is the next key I would say where many people fall short. Like so many people that set New Years resolutions and most don’t follow through.

Make that focus part of your very being, eat, sleep, breathe that goal.

I’ve trained myself to look at the ROI or cost/benefit of every purchase. If it’s not in line with my goal, then I may pass. That’s why I’ve never bought a new car it didn’t make sense for my situation (I have family that can work on cars)

I would also add to the other great comments that DIVERSIFICATION is key, along with multiple streams of income.

Tax code awareness too (this probably shouldn’t be last but others discussed it already)