Building a strong financial foundation is one of the top things you can do as a Real Estate Investor in order to be successful.  Building a strong financial foundation or base will allow you to grow your wealth faster and stronger and be able to weather the storms.  Dave the Debt Doctor offers some great tips on how to survive a recession that all Real Estate Investors and others should pay attention to.

1. Get out of debt

Add up how much you pay each month to repay your debts.  This includes your mortgage, car payments, credit cards, student loans, personal and pay day loans.  Now ask yourself, “If all these things were paid off, how much would my income needs be reduced?”  For most people it’s over 65%.  All you would need to pay for is food, utilities, taxes and a few other basic living expenses.  You wouldn’t have to worry about a reduction in income because your expenses would be so low.  Watching gas prices go to $4.00 a gallon wouldn’t be any fun, but at least you could afford it.

2. Decide where you want to spend your money

Don’t let others decide for you. Every time you turn on the television, open the paper, listen to the radio or check the mail, someone is encouraging you to spend money.  The major reason we buy so many things we really don’t want or need is because we have never taken the time to decide what it is we really do want.  Advertisers encourage us to “want it all, and want it now.”  Here’s a news flash – you can never possibly have everything you want, but you can have anything if you just take the time to determine what it is you really do want. You are responsible for where your money goes, don’t let advertisers decide your wants for you.

3. Set financial goals, both short- and long-term

Knowing what you want to accomplish financially makes it easier to avoid unnecessary spending and get what you really want. Without reasons to avoid wasteful spending you will never be able to save.  You will constantly be under pressure to spend money you don’t have for things you don’t need

4. Use credit only as a tool and with a plan

Figure out how and when you will pay the balance. Imagine building a house without a plan or blueprints. That’s what your financial house will look like, too, without a plan. Your goal should be to pay for credit card purchases when the statement arrives. Remember, unlike wine, cheese or my wife, debts do not improve with age

5. Have an adequate emergency savings fund

Life will throw curveballs at you, ranging from the need to replace a worn-out washing machine to a temporary job loss. Three to six months’ worth of bare-bones living expenses should shield you from most of these problems. Can’t do three months’ worth? Start with three days’ worth and watch it grow as saving becomes a habit.  Financial stress relief is called “money in the bank” or “positive cash flow.”

6. Learn how to invest your savings

Your money has to earn more money to keep you out of debt, especially in your later years. Take a class, find a referral to a great adviser or just start reading. Do it your way, but do it; and start now!

About the author:
Dave the Debt Doctor has been helping people with their financial problems for more than a decade. He is the radio voice for RAM Financial Services on Movin 97.5 in Phoenix, AZ. To learn more about Doctor Dave’s product The Ultimate Guide to Real Debt Relief you can go to www.getrealdebtrelief.com

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