Personal budgeting, expense tracking, cash flow management, emergency funds, and savings strategies.
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Foundation terms you need to know first (37 terms)
A tax refund is a reimbursement to taxpayers of excess tax paid to the government. For real estate investors, it represents a potential source of capital for new investments or property improvements.
Business finances involve the management of all money-related activities within a company, including income, expenses, profit, and cash flow, crucial for understanding investment performance.
Liabilities are financial obligations or debts that an individual or business owes to others, representing money that must be paid back in the future.
Consumer debt is money owed by individuals for personal goods and services, such as credit card balances, auto loans, and student loans, which directly impacts an investor's financial health and borrowing capacity for real estate.
The percentage of your disposable income that you save rather than spend, a key metric for personal finance and crucial for building capital for real estate investments.
Complex strategies and professional concepts (1 terms)
Financial resilience is an investor's ability to absorb and recover from adverse financial events, market downturns, or unexpected expenses, ensuring the long-term sustainability of their real estate investments.
Financial separation is the practice of maintaining distinct bank accounts, credit cards, and financial records for your real estate investment activities, completely separate from your personal finances.
Focus Blocks are dedicated, uninterrupted periods of time, typically 60-90 minutes, set aside for deep, single-task work on high-priority real estate investment activities to maximize concentration and output.
Goal setting in real estate investing is the process of defining clear, measurable, and achievable targets for your investment activities, providing direction and a roadmap for success.
A type of savings account that offers significantly higher interest rates than traditional savings accounts, typically provided by online banks and FDIC-insured.
An investment budget is a detailed financial plan outlining all anticipated costs, income, and cash flow associated with a real estate investment property, helping investors manage funds and assess profitability.
Liabilities are financial obligations or debts that an individual or business owes to others, representing money that must be paid back in the future.
Liquid assets are resources that can be quickly and easily converted into cash without losing significant value, providing financial flexibility and a safety net for investors.
Maintenance costs are the ongoing expenses required to keep a real estate property in good repair, functional, and habitable, directly impacting an investor's profitability and cash flow.
Net worth is a measure of your financial health, calculated by subtracting your total liabilities (what you owe) from your total assets (what you own). It provides a snapshot of your financial standing at a specific point in time.
PITI stands for Principal, Interest, Taxes, and Insurance, representing the four main components of a monthly mortgage payment for real estate investors and homeowners. It is a critical metric for budgeting, loan qualification, and assessing the true cost of property ownership.
Payment shock refers to a significant and unexpected increase in a borrower's monthly mortgage payment, often due to an adjustable-rate mortgage (ARM) resetting, or changes in property taxes and insurance premiums held in escrow.
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