a woman planning her investments

Three Simple Steps to Creating a Winning Investment Plan

You can start investing in your future today

Here are some startling statistics from a recent survey by the Center for Economic and Entrepreneurial Literacy:

  • 65% answered incorrectly when asked how many reindeer would remain if Santa had to lay off 25% of his eight reindeer because of the bad economy.
  • 75% of people thought that it would take 15 years or less to pay off $5,000 in Christmas presents if they made the minimum payment on their credit card. (It would actually take 46 years!)
  • One in three people didn’t know how much money a person would be spending on gifts if they spent 1% of their $50,000-per-year salary.

Top that off with these statistics on women and money from the UK’s moneyfacts.co.uk:

  • Women are 43% more likely than men to feel like their income won’t cover their expenses.
  • They are 54% more likely to borrow money to cover expenses then men.
  • 28% haven’t made any plans for retirement.

And the picture becomes clear that everyone, but especially women, is facing a crisis when it comes to their finances.

In order to prosper financially, it is imperative that women learn how to invest. Unfortunately, many don’t know where to start. The good news is it’s not that hard—and it can be fun!

The following are three simple steps to creating a winning investment plan that can change your financial future.

1. Determine how much you can invest

A lot of people make the excuse that they don’t have any money to start investing. For most people this is simply not true. Rather, they spend their money on any number of things that they don’t really need and then have no money left over. The problem comes with how they budget.

When Robert and I were younger, we treated our investing as an expense in our budget. We determined how much we wanted to spend each month in investments, and we made sure that we paid that “expense” each and every month.

This, of course, meant we had to take a look at other expenses in our budget and cut some of them in order to pay the “expense” of investing. Do the same. How much do you want to invest each month? What can you cut back on in order to make investing a priority? Make it a priority today, and it will become habit tomorrow.

2. Find out what you want to invest in

Another reason many people are intimated by investing is because they don’t understand the variety of things they can invest in. For most people, investing means a 401(k) or the stock market. But the reality is there are so many other areas where you can invest.

For starters, take a look at the four main asset classes: paper, real estate, commodities, and business. Find out which asset class excites you most, and then drill down on the type of investments in that class that you want to learn the most about and put your time, money, and energy into.

For me, it was real estate. I started with single-family housing and then moved into apartment buildings. I could have done commercial real estate like office buildings or mini-storage, but I loved doing residential real estate. The best part is by drilling down on it, I became an expert in it—all while having a blast!

3. Make long-term goals

Once you know how much you can invest and where you want to invest, make long term goals. Write them down and revisit them often.

For instance, if you invest in residential real estate like I did, maybe you make a goal of buying one rental house in your first year. Then maybe you make a goal of buying two in the second year. Then you could have a goal to purchase a small apartment building by year five. Whatever it is you choose to invest in, have a plan to go big in the long-term and stick to it.

It will pay off. Today, I own thousands of apartment units in multiple states. I planned to do this, but I started with one house. You can too, no matter the type of investment you focus on.

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