Real Estate by Nick Abbadessa
Nick Abbadessa
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Money Expert Tips – Part 1

Money ExpertAs a Realtor, passionate about what I do, I want to be more than your go to person if you’re looking to buy or sell a home for yourself. Rather, I want to be the person that helps you and your family in the long run. I want to help you buy your first home, followed with a move-up home as your family grows, as well as help your kids buy their first home and so forth.  To earn your trust and have such an opportunity, however, I know I must prove myself. I know I must present my dedication to helping you buy low, sell high, and all the while considering your future goals.

Accordingly, I wanted to write a different blog this time around. My goal, in this two part series, is to help you (and particularly your kids) increase your/their knowledge on how to strengthen your/their financial future. After researching some of the best advice given by some of the top financial experts (i.e. Dave Ramsey, Suze Orman, Robert Kiyosaki, Barbara Corcoran, and David Bach), here are some of the best money advice offered that can be started at any age, but of course younger the better.

1) Live within your means – Too often, people are living paycheck to paycheck. Too often they have to rob Peter to pay Paul. The fact is, however, expert after expert, stressed the importance of  living on less than you make. Credit cards and spending over saving can look enticing upfront when you’re receiving the immediate gratification of a product or service, but in the long run, this is the basis for financial problems. As parents (and non-parents), we must for ourselves and our kids, teach the importance of living within our means. You make $X a month. If your monthly output is about equivalent or exceeds your incoming income, then you have to make adjustments right away. Take a thorough look at your expenses.

Do you really need everything you’re paying for? Where can you cut costs? Do you need to sell your current home and purchase a more affordable property instead? The experts further explained that in terms of kids, particularly these days, they’re missing this simple concept. Too often, kids grow up not appreciating the value of the dollar and in turn, as they transition into adulthood, they have difficulty saving up for that down payment, or paying down their expenses to qualify for financing, and or are just overwhelmed with the reality of “adulting.”

Dave Ramsey, suggested that we should pay our kids a commission instead of an allowance. When kids receive an allowance, they expect to receive $X a week. However, if we give them a commission for the jobs they perform (i.e. clean the house, make dinner for the family, or babysit), then they are learning the concept of having to work for money. From here, you can take them to the store to purchase the goods they’ve had their eyes on. Doing so, though, you should give them the cash and allow them to experience how quickly a purchase can take the cash (that they worked so hard for) away. The goal, Ramsey explained, is to teach our kids how quickly a dollar can go.

2) Don’t work for money, let money work for you – Robert Kiyosaki once said,

“The moment you make passive income and portfolio income a part of your life, your life will change. Those words will become flesh…To obtain financial freedom, one must be either a business owner, an investor, or both, generating passive income, particularly on a monthly basis.” He further adds, “The key to financial freedom and great wealth is a person’s ability or skill to covert earned income into passive income and/or portfolio income.”

The idea here, as I’ve discussed in my previous blogs, is that there are three main types of income: (1) Active Income, (2) Passive Income, and (3) Portfolio Income. Active income are those for which services have been performed. You’re actually trading hours for dollars. These include wages, tips, salaries, and commissions. Passive income, on the other hand, are those  where you may do the work once, but you continue to get paid for that work after your work is done. These include royalties from books and other forms of media, business investments that don’t require your physical time, and real estate investments. Portfolio income is income derived from investments, dividends, interest, and capital gains. Whereas you have to trade hours for dollars (and there are only so many hours in a day), passive and portfolio income allow you to earn income without being limited to your work hours. This is the idea of “earning money in your sleep.” Now, it may be harder to set-up, but once a portfolio of passive and portfolio income streams are set, then you’re on your way to financial freedom.

3) Make the most of your Reward and/or Credit Card Points – If you don’t have the financial restraint, yet, to only purchase based on your means, then skip this tip for now. However, if you do, you can leverage the points offered from rewards programs and credit card companies to save. For example, quite often, credit card companies offer points with a cash-back value if you use their card in a particular store or category of product/service. For example, they may offer you so many points if you use their card for gas or groceries. If that’s the case, and you were planning on spending $400 on groceries in the given month, then you can use your credit card for the groceries, making sure you pay back your credit card immediately, and use the offered points for cash, travel miles, or gift cards.

Please proceed to the second part of this series to learn about saving and investing.

And as always, if you need any help listing or buying a home, please don’t hesitate to reach out.

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About Nick Abbadessa

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Nick Abbadessa

Realtor, BA, Cert. Luxury Home Specialist

nick@soldbynick.com

626-269-2751626-269-2751 main

RE/MAX Masters Realty

1030 Bonita Ave. La Verne, CA 91750 | BRE#01398872 |Office BRE#01064901

Reviews

5deancc78

Nick's overall ability to identify what his client is looking for in his/her home is second to none. He is very knowledgeable in all aspects of the home buying/selling process. If you’re looking for a real estate agent that is honest, knowledgeable, and... (more)

5ANaka

Nick is a plethora of knowledge when it comes to real estate. He is a very good communicator and always keep you in the loop. He is also very proactive and on top of things. He knows how to accommodate your needs and doesn't waste your time showing you... (more)

5jeff_ims

Nick patiently worked with us two months until we found just the right home to buy. When it came time to make an offer it was then that his deftness and wisdom made themselves apparent. Real estate transactions involve lots of detail, lots of money, and... (more)

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