I called a client today, he was finished with the probate process, we sold his dad’s home and he received a good amount of money. We chatted for a few minutes and then I asked … Have you thought what you are going to do with the money you just received? Have you thought about investing that money in something that produces some passive income for you? There was a pause on the line and then he said, “The money is for the kids”.
Later, he called me back and said -Angela, the more I think about your question, the more I believe what you say, I should invest this money, what can I do?
The biggest problem people have when they receive a good amount of money either by an inheritance, a tax return or any any other source, is that they don’t know how to use it. We have not been educated correctly on how to manage our money. I can mention right now numerous cases in which people have received a good amount of cash and it is gone in less than a year. They spend it in cars, motorcycles, electronics, furniture, I mean, just stuff that doesn’t mean anything and that they can sell in a garage sale for 10% of what they paid when they bought it.
What did you do with the tax return that you receive last year? what plans do you have for your tax return this year? 95% of the population is dead or dead broke by age 65, just 5% are financially independent.
Like my client today, most people don’t plan what to do with the extra cash that they receive, my client did not have anything planned that is why he said “It is for the kids” because there was not a plan in place, but when he thought about it he called me back to ask me if he could maybe invest on a rental home.
We need to spend more time educating ourselves about producing passive income and investing than spending time on Facebook, Instagram, playing video games, shopping and activities that don’t help us grow our intelect and/or checking account. Contact me when you need help buying your next rental property, I can give you some advice based on my own experience and my clients experience.