As mentioned in my last article, “How to Invest Your Money When You’re NOT a High Net Worth Investor,” saving money to invest and then investing it strategically can be tough when you’re just starting out. It was tough for me, too.
Looking back now, after 30 years of investing in real estate, there are plenty of things I’d tell my younger self to do—and not to do—if I were ever given the chance. Even so, I’ve learned many lessons throughout the years that I wouldn’t trade for anything.
Before I get into what those lessons are, I should say that not every path is the same. Just because certain financial and investing strategies worked for me doesn’t necessarily mean that they’re right for you. It may be wise to consider your strengths, weaknesses, goals, time commitment, risk tolerance, etc. before making any decisions.
So, what areas did I gain knowledge in, and how can those lessons be applied in your overall wealth building strategy?
3 Invaluable Lessons Learned From 30 Years of Investing
1. Find tax-savings opportunities.
Back in college, I took a taxation course on a whim. The professor had previously taught my economics class, and I liked his teaching style, but I had little to no interest in the subject. Looking back, learning the basics helped me eventually implement strategies to save on taxes that have made all the difference.
I realized that the government rewards (through tax deductions and by taxing profit distributions at a lower rate than earned income) those who create jobs by starting businesses or those who provide shelter via investing in real estate. The government also encourages philanthropy and home ownership through tax deductions and tax-savings opportunities.
Related: The Surprising Lesson a Six-Figure Salary in My 20s Taught Me About Wealth
So what did I do? I started a real estate business.
The specific strategies I’ve used throughout the years have changed, but as I mentioned in a previous article, it usually pays to call up your accountant and talk strategy. Are you getting all of the deductions you could be?
2. Leverage what you can.
My first time using other people’s money (OPM) to invest was through credit cards (i.e. the bank’s money). I would use a credit card to purchase and fix up the property, then refinance it to pay back the credit card and make a generous return.
Today, instead of using credit cards, I’d recommend what I did next, and that is to use private money (or even hard…