How to Become an Educated Real Estate Investor kim kiyosaki

9 Tips to Become an Expert Real Estate Investor

9 ways to transform yourself into an expert on rental properties

I’m the type of person who wants all the information before making even a relatively small decision—from comparing labels at the grocery store so I can choose the spaghetti sauce with the fewest unpronounceable ingredients to reading reviews about a movie so I can decide if it’s worth seeing.

Knowing this, you can probably imagine the great deal of care I take when making a decision on something large, like real estate. I meticulously find out everything I can about the property and crunch the numbers to see how feasible it will be to create cash flow from it.

See? I don’t have any special powers. I wasn’t just born with a knack for investing. And I don’t rely on other people to figure it out for me. Before I ever invested in any real estate, I took the time to invest in my own education — and that’s exactly how to become an educated real estate investor.

3 reasons women should become real estate investors

Before I dive into the nine ways to become an educated investor, it might be helpful to understand why real estate investing is so important when it comes to taking control of your financial future. After all, if you don’t see the value in it, why would you spend the time learning about it?

The following are three reasons why women should become real estate investors:

  1. No limits on income. Because of corporate glass ceilings and the still-present wage inequality between genders, women are often limited in the amount of income they can make. Studies show that women, with the same education and experience as their male counterparts, earn about 79 cents for every dollar their male peers earn. In investing, the money you can make is unlimited. You are completely responsible for and in control of the amount of money you make as an investor — and that’s why it’s so important to learn how to become an educated investor, as the more you know, the more you’ll earn.

    This was a key motivator for me, when I began pursuing real estate investing. Since I didn’t want anyone telling me how much money I could make, having no limits on my income appealed to me greatly.

  2. Increased self-esteem. Have you ever wondered how to build confidence? Personally, I think this is one of the greatest benefits to women investors. It’s not unusual for a woman’s self-esteem to be linked to her ability to provide for herself. Being dependent on anyone for your financial freedom can lead to a reduced sense of self-worth (not to mention, fear and resentment). You may do things you otherwise would not do if money were no issue — like stay in a bad marriage, keep a job you hate, or settle for a ho-hum life that doesn’t bring you joy.

    I’ve seen women’s self-esteem soar once they know how to make it on their own financially. And when a woman’s self-esteem rises, then the relationships around her tend to improve. Her life improves overall because she feels good about herself, and she is making choices that are genuinely true to her.

    With every little victory you accomplish, your confidence increases. Increased confidence leads to higher self-esteem. Higher self-esteem leads to greater success, which ultimately leads to the greatest gift of all: freedom.

  3. Control of your time. One big impediment women have (often, more so than men) when it comes to investing is time. This is especially true for mothers who often spend many of their waking hours taking care of the children. I hear from many women, “After I come home from work, I have to get dinner ready, help my kids with their homework, and clean up the dishes. By the time everyone’s in bed and I have a free moment to myself, I’m exhausted!”

    Here’s the good news: Real estate investors are in control of their time. Investing is something you can do part time or full time. It is something you can do from home, from the office, anywhere. It is also something in which you can include your children. Many mothers have told me that they take their children to look at properties or potential business investments. And a big plus is that when you include your children in the investment process you are actually teaching them to be investors as well. You become a teacher just like Robert’s Rich Dad was to him.

    I do not have children, but I certainly understand the desire to spend time with one’s kids. To watch them grow. To be present for all their “firsts.” That’s one of the best freedoms of all — flexibility with your time. Being an investor allows you to spend your time how you want and when you want, whether it’s with your children, with your spouse/partner, on vacation, or looking at potential deals. You can plan your days however you wish to, prioritizing what’s most important to you.

Becoming a know-it-all

Ok, did those three reasons to begin investing in real estate pique your interest? Then it’s time to learn the ropes.

There are few things riskier than an investor who has no idea what she is doing. The reality is that any woman can acquire knowledge and sift through the information available to find out what she needs to know. Now it’s time to learn how to become an educated investor:

  1. Learn the lingo. Understanding the definitions of financial words will greatly increase your knowledge of the subject. Start with terms like assets, liabilities, ROI, and gross vs. net income. Then, dig deeper. Every time a new word comes up in conversation or in your readings (which I’ll discuss in a minute), stop and look up the definition instead of glossing over it. Soon, you’ll be speaking the language of investing, which will allow you to connect more dots in conversations and while watching financial news programs. Honestly, this is one of the biggest battles when figuring out how to build confidence.

  2. Figure out the numbers. If you intend to reach your financial dreams, then you’ve got to become very comfortable with basic addition, subtraction, multiplication and division. Consider every investment you are pursuing as a mystery to be solved and numbers are the clues that guide you.

  3. Think like an accountant. You’ll also need to understand the three financial statements: income statement, balance sheet and statement of cash flow. Note: You certainly don’t need to be an accountant, or have a degree in finance to learn how to read and understand these foundational tools. Once you’ve had a little practice, they’ll be a piece of cake.

  4. Read and listen. There are countless books, blogs and podcasts on the subject of real estate investing, many geared toward beginners. I recommend starting with It’s Rising Time, my book that helps women find the courage, overcome the confusion an build the confidence they need to realize their financial dreams.

  5. Find a mentor. Seek out a few seasoned, educated investors and pick their brain. Behind every successful investor is a person who likely made some costly mistakes early on—see if you can find out more about where they went wrong and not just their successes.

  6. Attend workshops. Free seminars can kick-start your path to educated investing and taking control of your financial future.

  7. Question everything. It’s one thing to seek advice from a trusted source, like a business partner or financial adviser, but it’s another thing entirely to take everything you hear as gospel. You must think for yourself, so that you’re making the most informed decisions possible. Try asking these questions when presented with advice or opportunities: Does this make sense for me? What are the pros and cons? Will this get me closer to my financial goal?

  8. Ongoing education. Educated investors don’t simply gather all this knowledge and then think they’re done. Learning is a lifelong pursuit because things change. Laws, regulations, technology and terminology adapt over the years, so keeping current is an investment in your future. Real estate investors who allow themselves to become stale will no doubt face numerous risks: losing momentum, legal ramifications, missing out on opportunities, etc.

  9. Gain experience. At some point, you have to decide you’ve learned enough to pull the trigger and make your first investment. Hopefully you will have gained enough knowledge to avoid some of the most common pitfalls. But you’ll likely make some mistakes and experience a few setbacks along the way. That’s perfectly fine. In fact, it’s OK to fail. What’s important is that you learn from those situations and apply that to your next investment. You’ll get wiser with each go-round. I sure did.

Also, before you plunk down any of your hard-earned money, take some time to read How to Buy Your First Investment Property. This free eBook is chockfull of the secrets Robert and I have used throughout our many decades as real estate investors — from finding the right property to closing the deal.

Still feeling a little nervous? Of course you are! I don’t know a single investor who didn’t have some (or a lot) of fear in the early stages of his or her investing life. Even today, I sometimes get nervous venturing into new areas of investing. It’s natural. But if you let that fear paralyze you and keep you from moving forward, you’ll miss out on reaping the rewards of your new found education: financial freedom.

 

Original publish date: August 31, 2017