How to be a successful investor?

Financial Education Made Simple

Master Investor
April 28, 2023

How to become a successful investor?

SUMMARY

If we create and stick to a strategic investment plan for passive income, anyone can become a successful inside investor (master investor).
A sound financial education is essential for creating a successful investing strategy.
Among the advice we've given to help all become a great investor is to ask the proper questions and learn from our failures.

Investment planning is avoided by many people because they believe it to be too difficult and have a steep learning curve. And it's accurate to say that certain people do make investing appear challenging. However, the truth is that anyone can become an inside investor with a little guidance and knowledge.

How to be a successful investor?

Here are five suggestions to aid our financial strategy. They are blunt, clear, and to the point. We simply need to put them into practice.

The following are five tips to help you with investment planning. They’re straight to the point, clear, and concise. All you have to do is put them to action.

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Key #1: Equip ourselves with financial knowledge.

The key is financial knowledge. We will perform better when it comes to investing the more we know about business. We will therefore need to complete some homework. The good news is that we have access to a wealth of resources thanks to the Internet. Take the financial knowledge and apply it into our lives.

We all have to start somewhere, we must enhance our investment education and choose a plan to create passive income. There are many different formulas to wealth, we pick the one that we like and we can expand into others once we have one established. When we have financial education we do not acquire or invest into something that loses money.

Here are some questions to ask when we are looking at a real estate investment:

What is the interest rate?
How does the deal fit into a long term investment strategy?
What is the current vacancy rate?
What is the cap rate?
Is there any HOA's history of assessments?
What is the repair and management cost?
How fast would I recoup my initial capita invested back?
What is my infinite return on investment?

Having a solid understanding of finances will enable us to ask the proper questions and decide whether something is a sound investment.

Key #2: Start

Regardless of what we decide to include in our investment strategy, be prepared to make some errors along the road. We need not be afraid of making errors. Rather, fear not understanding from them.

An asset can also turn into a liability, and viceversa. We must prepare all scenarios good and bad to make sure that we can handle the asset in case in turns into a liability for whatever reason, for example, like vacancy. It is important that we begin taking action towards our investment plan. The only way to have passive income is to have an asset in our asset column that works on its own because systems are in place. The internet is the perfect place to start by controlling digital assets. However, even in real estate we will need the internet.

The point is to start, and many do not, because of the capital that they think is involved in building a successful business. When we have financial education we understand the job number one of an entrepreneur is to raise capital. Therefore, we can raise capital from sales online if we choose a digital asset.

Key #3: Put money down

There are three reasons why this is important to successful investment planning.

Until we have some money on the line, we are not in the game. Up to that point, it’s all theory. We have to put our knowledge into action. However, the better business people we are the higher our financial IQ is, then we can raise capital for any deal we put together. Most people think, but never do. If we do something, we make mistakes, and it's from our mistakes that we learn them most. Now we know the right questions to ask.
A little money means a little risk, but a lot of money means a lot of risk. We can learn just as much from the mistakes on a little bit of money than we can on a lot of money. Make those small mistakes first, and then look at upping our money game.
Have we noticed how interested we get in something when our money is at stake? Having money on the line helps us become motivated to invest our whole self in the process. We must make sure that the numbers work every time. An asset puts money in our pocket in the form of passive income without us working to receive the positive cash-flow. We put the systems together and we control the cash flow created. But keep in mind, that that it does not take our capital to create passive income. The more creative and financial education we have, then the better we are at raising capital. Using OPM other people’s money is key when investing for passive income and achieving infinite return of investment. The job number of entrepreneurs is to raise capital from the end users and lenders of money (banks, etc). The job umber of an investor is to make money work hard in a sound high performing investment and reach infinite return on investment.

Key #4: Comprehend the true problem being solve

Having a grasp over the root of the problem, the very basic fundamentals of investment planning: that an asset puts money in our pocket on autopilot without us being in present to generate the passive income, while a liability takes money out of our pocket in the form of an expense, is a major step to strategically - and successfully- invest for passive income. Now, expenses are not bad and it is not about cutting expenses at all. Actually we need to spend mor but wisely, so that we use all capital to acquire sound assets that generate passive income to pay for the liabilities expenses and any other expense in our financial statement.

The ability to read financial statements are the foundation of true wealth.

Key #5: Diversified among the five asset classes for passive income

When we start executing our investment strategy, we must choose the an asset class that excite us learning more about it. For example, if we like real estate then we should begin investing in real estate, does not mean with our own capital but with the bank's capital.

There are about five asset classes that exist to invest for passive income and we should diversified among the five asset classes, but we must choose the one we want to start with and work ourselves towards the other asset class as our passive income increases in one. We can also seek business partners in other asset class that we would feel more comfortable by investing with others that are already are actively investing or wanting to invest in such asset class. We always must keep in mind to primarly invest for passive income. Remember, we can have two types of income that we can achieve when invest on an investment that is sound because if it is not, then the result is lost of capital. The two incomes are:

Capital Gains Income (taxed at a higher bracket, there several exceptions to make the gains tax free in real estate)
Passive Income (tax free)

Passive income is king because not only is tax free when we have a tax strategy in place but it provides freedom for us. That is why here at Master Investor we encourage everyone to work to build passive income.

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