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6 Habits to Adopt Now If You Want to Build Wealth

The key to finding opportunity in a time of economic uncertainty is to think long-term, according to Jay and Wendy Papasan, the husband-and-wife founders of Keller Williams’ Papasan Properties.

While many across the country struggle with unemployment and significant cuts to income, those who are working and thinking about real estate investment should take a hard look at their financial habits.

Jay Papasan

“We have an opportunity to form fresh habits,” said Jay, co-author of “The Millionaire Real Estate Agent” (with Gary Keller and Dave Jenks). “And change that trajectory just by changing the habits that drive our lives.”

Here are six tips for coming out of the current difficult moment stronger and wealthier:

1. Say no to say yes

Wealth building requires a level of discipline and forward-thinking. One way to make it easier, Jay advises, is to periodically remind yourself that you are doing it to generate passive income and have financial freedom to do the kind of work you like as you age. If you do, putting off a car upgrade or new wardrobe now will feel less like a sacrifice.

“The key is understanding what you’re saying yes to,” Jay said. “What would happen if the income that you worked for today showed up automatically and work became a choice? That freedom is what you’re saying yes to.”

2. Pay your investment fund first

“Pay yourself first” is every financial adviser’s motto for a reason. When you make a habit of transferring a certain amount of money into a savings account or a mortgage on a property, it becomes much more difficult to whittle it away on smaller things. While this may not apply to those who need every dollar amid the pandemic, the strategy of putting money aside before you set your monthly budget is a sound one.

“When you take the money off the top, you automatically learn to live with what’s left,” Jay said.

3. Focus on net worth rather than income

Agents can easily get caught up in what you earn in a given month or even a given year. But the Papasans point out that true wealth comes from what you have when you are not working, and that is why investing is key to getting there.

Track your financial outlook just as you would if you needed to fill out a mortgage application — take some time each month to go over your assets, businesses and real estate holdings.

Wendy Papasan

“Net worth is really the true measure of wealth,” Wendy said. “If you look at that Forbes richest 500 people list, it’s not the doctor making the most income. It’s not the lawyer making the most income. It’s usually the people who have the most assets.”

4. Learn the rules of money

The art of real estate investment needs to be learned and studied. Use your free time to learn everything from the basics of investing to the types of neighborhoods most likely to see home value growth in the coming years.

“What are you putting into your brain?” Wendy asked. “Are you listening to podcasts? Are you listening to Audible books on investing? When you get home at night, are you watching Netflix or are you reading up on wealth building?”

5. Learn to leverage your time and your money

Find out where you spend your time and money, and then adjust accordingly. Do you find yourself spending too much time with the minutiae of running your real estate business? Enlist someone to help. Are you bringing in profit but finding it whittled away on small things every month? Force yourself to make monthly payments toward an investment property instead.

“Do you know what your dollars-per-hour is?” Jay asked. “When you have the ability to dedicate for lead generating for more listings and buyers, you realize that it doesn’t pay for you to be running signs out to your listings.”

6. Surround yourself with success

With many people still stuck at home, this is also an opportunity to build a group of those who want to learn about investing and exchange ideas. One possibility is to host regular Zoom get-togethers with others interested in investing. 

Who you surround yourself with “defines your sense of normal,” Jay said. “If you surround yourself with people who spend more than they earn, that’s going to feel normal to you.”

Source: Inman News