If you’re a sales professional (or another type of executive) who works in a large company, this is the time of year you receive your bonus check for a job well done.
You’ve finished your last year. The company calculated your bonus earnings. You deserve the bonus!
Your check may be pretty sizeable, too. If so, congratulations. That’s a great feeling. I know a lot of individuals who are receiving these checks right about now.
I know because one thing that’s been happening to me lately is that my fellow sales executives have been asking me how they should invest their bonus checks.
My go-to answer is always going to be real estate investing… as in not stocks, not a new truck, not an expensive getaway and not your mortgage. Certainly not paying down a big chunk of their mortgage, which is something lots of people do because they think that’s the way to get ahead. But that’s not an “investment.” It also doesn’t put you ahead much.
If you want to know why your home is not an investment, you’re in luck. I created a very cool video class on that. Here’s the link to the first.
My question to you is… what will you do with that extra cash?
Most people I talk to tell me all the things they intend to buy. They will simply spend the money instead of saving it or, better yet, investing it. They will, in a word, squander it.
In my experience, I see that the sales executives I know will put their bonus checks in one of 3 buckets. To explain this a bit better, I created a short video. Give it your attention for the next few minutes. Share it if you know other people who might benefit from this information.
So, what are the 3 buckets?
Most wealthy individuals I’ve met keep their buckets of income… or income streams… separate. They don’t borrow from one bucket to cover expenses in another. That’s a strategy you want to follow if you intend to be wealthy. However, these are not the buckets I’m talking about here today.
For this article, the buckets I refer to are those that — If you just watched my video — you know are the 3 buckets in which people tend to place their bonus check money. These are the:
This isn’t investing in cashflow-producing real estate. Rather it is in their own homes (which is not an investment), stocks and bonds (which can be mighty risky given the unstable, unpredictable markets) and perhaps a business. This can be their own side business or someone else’s business. This can be a good investment if you have all the information needed up front and if the company is run well. However, in such dealings there are lots of unknowns and the business plan must be solid. All I can suggest is to create a long list of questions for the business owner you are helping and to do a whole lot of research on the market, the viability of that business, the customers and so many other criteria.
For me investing your bonus check in real property on your own or with someone who knows his stuff is a far less risky move. Real estate is proven. People need a place to live; the properties I always invest in are multifamily and I serve renters. Good renters. There are lots of reasons I chose this niche. Good returns are just one. If you want to read more about my reasons, go to this article now: keeponcashflow.com/3-great-reasons-to-invest-in-multifamily-properties.
This could also be called the “spend it now and save nothing for the future” bucket. But hey, we all enjoy spending money on cool things we don’t normally get to afford, right? But when you spend your money on a big vacation, a cruise to Hawaii, a new car or motorcycle, a big-screen TV, an expensive new watch or any other doo-dad (as they are called in Robert Kiyosaki’s Cashflow board game) you can think of, you aren’t doing anything more than spending money. You aren’t creating more gold for your golden years; you aren’t getting returns on your money; you aren’t earning cashflow. You’re just having a great time spending.
Down the road, I promise that you’ll wish you hadn’t spent it… wasted it on doo-dads that gave you a quick-fix and temporary buzz. Come retirement time, if you consider just how much money you wasted, you might be sick to your stomach. If you want more clarity on my statement herein, give me a call. I’d be happy to meet with you in person if you happen to be in the Barcelona area. You’ll find all sorts of ways to connect with me here on this site. Click here now to contact me.
Some people are great at saving their money. Because they are super-conservative with their earnings, they put their bonus checks into a savings account or retirement account. But since the returns are so darned low… and sometimes they’re even paying the bank to hold onto their money for them… they may as well put it in a shoe box and stuff it under their bed. (I wrote an article about that early on. You can go back and read it here: keeponcashflow.com/investing-in-real-estate-vs-keeping-your-money-in-a-shoe-box.
I cannot recommend putting your hard-earned money into a savings account where it will just sit and sit, not giving you anything in return. Sure, you’ll have it when you’re ready to buy something one day, but it won’t have earned much interest and I promise you that the economy will have changed. Your money will be worth less. (Maybe I should say it could be almost worthless?)
If you instead were to put your money to work for you by investing in real estate where you get a monthly or quarterly check to put in the bank or back into another investment property, you will be doing far more for yourself and your financial future than just letting it sit idle.
There is a great alternative!
Now that you know how a lot of people spend their bonus checks and that you have a great alternative that will give you returns vs. giving you little to nothing in return, what are you going to do with your bonus check this year?
Because I’m looking at my next investment property, I have a couple of ideas for you.
It would be great to chat about the 4 ways to make returns on your investment in real properties. I’ll be creating a video series on that very soon. And I’ll let you know when it is available via email soon, too!
Since I love to invest in multifamily properties, I can promise you that the returns can be extremely good. In fact, because you will receive your returns regularly, you can have a lot more money to do something with. (Like reinvest and earn even more. There is a formula to this stuff!)
As always, I’d love to chat with you. Please use the link below to schedule a time for us to speak. I look forward to getting to know you and learning how I can best serve you!