Finances can be tricky, whether you are buying a rental property, investing, or making a budget. I’ll frequently find myself getting stuck in a classic “paralysis by analysis” situation.
In times like this, what has helped me greatly is to refer to some simple rules of thumb for each situation. If you’re considering an investment or a purchase, having a rule of thumb can give you have a quick idea of whether it’s worth your time to pursue or analyze it further. Think of these rules of thumb as a basic guide to help make a quick determination.
Now, let’s look at what we discussed in this episode:
- My favorite financial rules of thumb in real estate
- My favorite financial rules of thumb in personal finance and retirement
- How much house can you afford?
- What should your net worth be?
- How much life insurance do you need?
Here’s a breakdown of how this episode unfolds…
The rule states that your investment property should rent 1% of the purchase price.
The amount that you have should depend on what your income sources are and how consistent they are.
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