It's important to recognize that money can be used as a tool to help you get what you want out of life. Unfortunately, most people get pushed around by money. They let their money, or lack thereof, dictate how they feel about it. Have you ever had that anxious feeling when you look at an account of yours that has less than you hoped there would be? Or looked at that credit card statement and it was much higher than you thought? Don't feel bad, we all have at one point or another. It's important to recognize that when you break it down, money is nothing more than a tool. It's a tool to be used as a means to an end. Basically it is a value assigned to something. When you go to work and make a salary, your employer has assigned your job a value, and that value is what your salary is. When you go shopping at the grocery store, every item in that store is assigned a value based on the store wholesale cost, plus a markup that society assigns a value on. When you start to understand this, you will start to understand that the power of money can be harnessed for good, to help you get some of the finer things out of life.
Sit back and think about what you really want to get out of your hard earned money. Maybe it's a brand new house or car. Maybe it's a condo down south to escape the winters. Or maybe it's the freedom to spend your time however you choose, not working for the man. Maybe it's all of the above! Whatever it is, you can achieve many of your goals with the correct mindset and staying focused on what really matters.
I read about a very effective way of using money and real estate as a tool in one of Rich Dad's (Robert Kiyosaki) books. When Robert was nearly broke earlier in his life, he was presented with the opportunity to buy his dream car. This was well before he became the real estate guru he is today, so he didn't have any cash at his disposal. He had some money, but if he bought the car outright, it would have put a giant dent in his bank account, leaving him with very little money to live his life on. Instead of just passing on the deal, he found a way to creatively invest in real estate in a way that he could use the money he had as a downpayment on a small apartment building. This investment generated enough money to use for his car payments. On top of that, when the car was all paid off in 5 years, he had a nice, steady, cash flowing apartment building that generated income for him to do whatever he wanted with!
Maybe you have saved enough to afford that brand new car with all the bells and whistles. Think about all those thousands of dollars you saved, all the work you put in to afford this car. Sure it's an awesome car and everything. But think about what else you could do with that money. Instead of plunking a whole bunch of money down on a brand new car, you could put that money to use somewhere else in your life, like saving for the downpayment of a rental property, something that generates a good amount of cash flow. After that, you turn around and use that cash flow to pay for the lease payments of your brand new car. At the end of the day, you've got your brand new car, you've got a rental property generating INCOME every month, as well as all the other benefits from real estate investing such as tax savings through DEPRECIATION, EQUITY growth through mortgage principal paydown, APPRECIATION through the inflation of home prices over time and LEVERAGE by using other people's money to work for you (see our blog post Real Estate: An IDEAL Strategy for a further explanation). With real estate investing, you CAN have your cake and eat it too!
In this example, of course Robert could have just felt like he worked very hard and deserved to buy this care. He could have just bit the bullet and paid all cash for the car, leaving him with little or no nest egg to fall back on. Instead, he got his car, and still ended up further ahead.
As you can see, when done smartly, real estate is an excellent tool to help take your life to the next level! It can be a great tool to achieve and afford anything you want to in life!