Investing in real estate or investing in your own business all comes down to one thing, which is your money mindset.
I want to share with you 10 rules that you need to follow when it comes to your relationship with money.
Before you jump off this article thinking: Where's the practical advice? I'm telling you, this is life-changing if you can adopt and execute it.
So if you're interested, keep reading.
Learn How to Make Money Passively
You can't get financial freedom unless you have a good relationship with money, and it really starts from within.
You can go out there, look at social media, and see some people doing well, and some not so well, and the byproduct of that is how you feel. So, you react to that.
What I want you to focus on are 10 or so rules that you really need to not just understand, but also live by. I actually started adopting them a while ago, but I subconsciously did it.
When you start reading this sort of stuff and learn from people who've done it before, you start realising your mind is very powerful. Most people don't know how to use it. Some people don't know how to access it.
Hopefully, this article can help you start accessing parts of your mind when it comes to your relationship with money, and I promise you, it will change your life if you actually execute.
Number 1: Pay Yourself First.
You've probably heard this a million times, so I'm not going to dwell on it, but it's very important. Still, to this day, it blows my mind that people aren't doing this. It's especially hard when you're running a business, but let's focus on salaries first.
You go out there, earn a salary from your 9 to 5 job, and maybe get paid weekly, fortnightly, or monthly. What you may be doing after you receive that pay is tackling fixed expenses.
Now yes, textbooks would probably tell you that's a great idea, and yes, it's a better idea, but if I were to do this today, what I'm doing is going: I know I have a certain goal that I want to hit. I will then reverse engineer it.
Therefore, if I want to save $10,000 a year or $100,000 a year, I'm going to break it down into monthly or fortnightly payments and say: It doesn't matter what my lifestyle looks like; I want to pay myself that money first. This money could be invested, or it could be money that you spend on yourself.
Now, the reason why I think this is a better approach than just focusing on fixed expenses is because as you earn more, you'll allocate a bigger percentage towards those fixed expenses. This creates lifestyle creep, and your lifestyle increases with your income. But if you pay yourself first, and you've set a fixed amount that you're going to allocate, as you earn more, you'll prioritise paying yourself more.
In turn, you'll want to invest more, as you're probably not spending as much on fixed or variable expenses.
Number 2: Learn How to Invest.
If you're reading this article, you're probably thinking: I want to learn about real estate investing.
There are so many videos on YouTube and articles on Google and they're free. You could say: This weekend, I'm going to watch 10 videos or articles that Ravi's made about all these topics regarding real estate investing.
If you're into cryptocurrency, you could do the same. But if you're interested in something like Exchange-Traded Fund (ETF) investing, I might not be the right guy. So, what you should do is find experts in those fields, listen to them, and educate yourself.
Knowing how to invest is just part of the puzzle—you also have to put the reps in and actually do it. That doesn’t mean you have to be a genius at ETFs, SMSFs, and real estate investing while still maintaining a job and a life. You can outsource parts of your life when it comes to investing. You could get a financial planner or an accountant to help you with your accounts.
If you're looking at buying investment properties and don't know where to start, you can visit my Search Property or directly book a FREE discovery call with my team.
Number 3: Don’t be a Hater of Money
This means people's relationship with money often gets tangled because emotions take over when logic should be driving the conversation. Let's unpack this.
What I mean by this is that I know people in my circles who have a really negative relationship with money.
Whenever they talk about it, it always comes down to, "I’ve got to pay bills, I’m stressed out, I have mortgage repayments, I don’t make enough."
Instead of approaching it that way, you could say: I know the idea of money growing and compounding on itself. Therefore, if you know you have these issues, you can either reduce your expenses by humbling your lifestyle or just make more.
Yes, I’m saying "just make more" like it’s easy, but guys, we’re in 2024—maybe you’re watching this in 2025 or beyond—but the reality is, there are so many opportunities out there. There are excuses for missing those opportunities, but that’s a whole other conversation.
When you change your relationship with money to a more positive one, you'll find that it starts growing more. Everyone's got bills, everyone's got mortgage repayments or rent, but somehow, the rich get richer. This is because they invest their money, learn how to do it, and have a really good relationship with money.
Number 4: Give Every Dollar a Job
Now, I had to read this twice because I was like, "How does a dollar get a job? You need the job to get the dollar, right?"
What it means is that you're getting each dollar to work for you.
This doesn't mean just go out there and invest. If you’ve read my previous blogs or watched my videos on my YouTube channel, I built my investment portfolio in my 20s, and I travelled a lot.
The reason I did that was because I know that I'm only in my 20s once.
Could I have bought an extra property or an extra couple of properties?
Yeah, of course I could. However, the reality is, I'm never going to be 24 doing dumb things overseas in Europe again. So, I wanted to do those things, and I think that if you have a proper system and a proper process, you should be able to enjoy both the lifestyle element of being young—and when I say young, I mean under 50. Sorry if you're over 50, but now it just got awkward. You might have a young family and want to spend more time with them.
There is a way that you can actually get the best of both worlds, and it's just about being strategic.
I hear so many people with different stories, and they go, "Oh, I saved every dollar. I ate noodles and stuff like that."
Cool, that's up to you, but that's not the way I operate.
To be honest, if I invest more, I'm actually enjoying my life a lot more because I get the fruits of that labour, which allows me more choice and freedom.
Number 5: Spend Less Than You Earn
Now, using credit cards to buy things that aren't required or aren't a necessity is where people land themselves in problems.
You hear countless stories, and you may know someone in your own life who has gone out, made an expensive purchase on their credit card, and said, "Well, I'll just pay it off next month." But why are you getting the expensive purchase when clearly, you don't have the money to do that?
The key here is that I think the majority of people's solutions around their money problems are going to be just spending less than they earn. It's really basic, but it's very difficult to execute.
It's the same way as when I talk about real estate. I'm like: Hey, just buy real estate.
You then go: Cool, I'll go on realestate.com and then buy something.
It's pretty easy, because if you pay over and above something, the agent is pretty much going to prioritise you and take you through the deal.
However, that doesn't mean you're actually guaranteed to make money. You could, in fact, have picked up the wrong property—a dud property that does nothing—and you've actually lost money on it. That's the stuff that doesn't really get covered online.
So what I'm saying is, yes, things are simple and basic, but when it comes to execution, you can go wrong.
That's why you need to outsource that sort of stuff if you need the help. When it comes to spending less, you don't need to outsource that. It's all about discipline.
Yes, you can go and make excuses, but it comes down to one simple thing: DISCIPLINE.
Number 6: Don’t be a Slave to Money.
Now, this took me some time to understand, and I subconsciously was doing this in my early 20s.
Yes, I was able to travel and do all those things, but when it came to household expenditure while I was at home, I was going out for lunch and things like that. I would always be scouring what the menu prices were, and I'd say: Yeah, no, I don’t think so.
I get it, hindsight’s great because I can look back and say: Well yeah, if I didn’t do those things and tighten the belt there, I wouldn’t be able to spend money while travelling.
However, at the same time, there were moments when I really wanted a particular dish from the menu but didn’t order it. I would then think about it and obsess over the fact that I had this money, but I just wanted to keep it and grow my savings balance. My savings account kept growing, and it was great until I invested it. Then I realised: Wait, I'm going to start from zero again.
Therefore, I worked my way up in savings, and then it went back down to zero again.
While I was flowing money here, I was actually growing the portfolio on the side. That is where all the fruits of the labour were coming from, and it was going to be far greater than just seeing a couple of digits on my app when looking at my bank account.
Number 7: Keep Your Finances Organised.
You can't just go: Oh well, now it’s tax return time. I better look at my finances.
That’s once a year. Money makes the world go round. I’m pretty sure someone said that somewhere.
However, the reality is, if you decide that money isn’t everything, sure, go downstairs and try to get a coffee with that mindset—because you’ll need money to get that coffee.
I'm not saying money is life, but what I’m trying to get across here is that even if out of the 10 or 12 tips I’ve got here you adopt three or four of them, you’re going to find you have a lot more money and a lot more investments in 6 to 12 months from now.
When it comes to keeping your finances organised, you want to be ready to go whenever. It would be the equivalent of saying: Okay, once a year, I want to have a six-pack because I'm going to this particular music festival, and that’s where I want to look great.
Do you achieve that in the week leading up to the festival, or do you have to work on it throughout the entire year? (I’m not sure why I’m using the example of a music festival. I’ve never gone topless to a music festival—it’s definitely not my vibe, as you can probably tell. But that’s the example I’m working with. Haha!)
By keeping your finances organised and having that check-in with your partner, sibling, or even your parents every couple of weeks, it’s going to go a long way. It realigns your goals.
If you have a goal that starts on January 1st, by the time you get to October, you're like: I don’t even remember what my goals were.
Even if you did remember and never executed them, chances are if you didn’t achieve them in the first nine months, you definitely aren’t going to do it in the last three months.
Number 8: It's a Game, so Learn How to Play it.
Whenever I’ve thought about growing a business or working on my development, I always gamify it, because for me, I understand games. I used to play a lot of Pokémon cards—yeah, Pokémon cards were a big thing for me—and I just knew that I had to keep levelling up. That came through experience, doing activities, gaining experience, and making mistakes.
It’s the same thing when it comes to finance as well.
If you can learn the rules of the game, you actually know how to win.
Think about going out there and saying: I’m going to play a game of Monopoly with you, but you have no idea how to play. You’ve never played this game before, and you just say: Okay, cool, let’s start, and I’ll learn the rules as we go.
That’s kind of how people do it.
We don’t get taught in school: Here are the rules of the game. Follow this and execute for the next 30 years, and you’ll be financially free in your 50s.
Instead, what happens is you just figure it out as you go along.
Now, figuring it out as you go along may mean:
- Bad experiences;
- Losing a ton of money;
- Getting introduced to the wrong people—and suddenly, you’re losing money; losing in the game, while everyone else is excelling.
That’s because you don’t even know what you want. So, have clear, defined strategies and defined goals. Then understand the rules of the game that you’re playing, and the game that you’re playing is financial freedom.
Let’s not sugarcoat it. Yes, we want to work a job, but if you could spend that time on holidays or go out to the beach, think about how happy you are there.
If you use the income from your jobs or your businesses, bring it into investments, and those investments then pay you a wage, you can do whatever the f*** you like.
Number 9: Always Have an Emergency Fund.
It does not matter if crypto is going to the toilet or Bitcoin is under $11,000—you need to have an emergency fund.
I don’t care if the best real estate deal came across your table—you need to have an emergency fund because it’s an emergency. You’ll need that fund.
Yes, you could go out there and try to use your credit card or get a personal loan, but that’s how you really roll over into a negative spiral of debt.
What you want is good debt, not bad debt. So, when you have an emergency fund, you also have the ability to help yourself and also your family, and I think that’s very important and key to this entire journey.
When you don’t have those funds, you might be forced to sell some of your shares or some of your crypto positions.
Real estate obviously moves slowly, so you can’t take your money out from there. By having the money sit there, you’re making more logical decisions and when the emotions do kick in, if something were to happen—God forbid—you actually have the funds to be able to execute on that.
Number 10: Learn How to Make Money Passively.
Passive investments are amazing, but the reality is nothing's really passive. You've got to learn how to do it. You may outsource it, but it's still not passive.
What I find with something like real estate is yes, there's a passive element to it, where every month I get paid a certain amount from the rent I earn. But at the end of the day, there are still active components to earning that income.
When it comes to learning how to make passive income, I would say investing is one part of it, but then you've also got businesses, you've got other investments that you can make as well.
Even if you're putting in an hour or two every week or every month, that's still going to be quite passive compared to having to put in 40 to 50 hours of work actively to earn an income.
If I only have to put in 1 hour of work in the month to earn the same as I would if I had to work 168 hours in that month, I'm taking that option. That's why you need to understand the rules of the game to know what to invest in to earn passive income.
It's Not About How Much You Make, It's About What You Keep.
This is basic as well, but it’s very important.
I go out to open homes all the time—some for fun and somewhere I'm taking it seriously—and what I've realised is people will spend everything they could possibly spend, perhaps just to look like they're wealthy.
You go out there, and I've got people I know that will flaunt certain things on Instagram, and then be the same ones messaging me going, "Ah, I actually don't have funds to be able to go out this weekend,” and it's because they go out and prioritise the wrong things.
You could be earning $200,000 to $300,000. I literally had a conversation a year ago with someone who emailed me saying, "Hey Ravi, I make $330,000 a year, which is a s*** load," and they have no investments.
They're renting at the moment but looking at investing, and I said, "Okay, cool, so how much do you have saved up?"
They were like, "30,000 dollars."
I said in response, "Okay, well maybe I’m missing something here." I asked a few other questions, and they told me that they had been earning that sort of income, they had been earning over $200,000 for the last six years.
The reality was, the reason why that savings balance is so low is because they had an expensive lifestyle. They would go out to all these fancy restaurants, fine dining, going out, and they thought: Well, I'm making a lot of money, so why not continue spending it? I only get to live once, right? YOLO!
I don’t know where that came from, but I know that there are actual clients we have that make less than $100,000, have multiple properties to their name now, and generate more capital growth than their first jobs paid them.
That's the reality: if you can go out and earn a high income, use that opportunity to go and invest and build your machine. Because if you're not doing that, one day that income's going to go away. And if it goes away and you haven't built your machine, you're out of luck because you don't have to compromise on your lifestyle.
Now, the way that I would do it is, yes, I've got lifestyle creep, no doubt.
As my income increases, I enjoy a couple of extra things in my day. But as that's happened, I know that the rate at which my income is increasing—the rate at which my lifestyle expenses are—are nowhere near.
In fact, it's probably 20 or 30% of the rate at which my income grows. So, that allows me to always keep a buffer, and it's very important that you allocate those funds to go and invest into your machine. Otherwise, in a couple of years' time, if you're not earning that income, you're going to be financially screwed, and that's where the stress really kicks in.
So, I hope you can adopt a couple of these rules.
If you can adopt all of them, in 12 months, send me an email at ravi@searchpropertyau.com.au, because I'd love to hear from you.
Thank you so much for watching.
I'll catch you guys in the next one.
Thanks, guys. Bye!
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