“Thank you for your hard work today, Connor. I will see you tomorrow. Here are your tips,” my new boss said to me after my first day as a busboy at Outback Steakhouse. I quickly drove home to tell my parents how my day went and my plans for the money.

“Hey mom, dad, look! I made $25 at work today—only a few more days until I can get a new Xbox game!” I exclaimed. “Great job, Connor, but don’t forget to save some of that money. Pay yourself first.” my dad responded. Unfortunately, young, dumb Connor missed the subtle hint from his dad and took all of his newly acquired cash and stuffed it in the shoebox labeled “Fun Money”—and none of into the non-existent “Savings” shoebox.

Years later, I of course now know the importance of having a strong savings rate and paying myself first, but that came after a few years of spending every dollar that I came in touch with. Sadly, my dad’s sound advice fell on deaf ears, and it was only after I read the classic Rich Dad Poor Dad: What the Rich Teach Their Kids About Money That the Poor and Middle Class Do Not! (congrats if this is the one millionth time you have seen this book recommended!) that the “pay yourself first” concept finally clicked with me. But there is another concept I would like to share with you and that is paying yourself first and last!

What is Paying Yourself First?

First off, I want to first discuss the concept of paying yourself first. This just simply means taking a set amount or set percentage of the money you earn and stashing it away in your savings BEFORE budgeting for your bills and life expenses. This way, rather than hoping there is extra money at the end of the month to put into savings, you have taken care of savings as priority number one. Let’s be honest with ourselves: There is never anything left over at the end of the month in savings. That money is always spent on that extra happy hour, coffee, or impulse Amazon purchase (my old vice).

wealthy-habits

Related: 12 Reasons You’re Poor

Now, let me tackle the thought running through the heads of those new to the “pay yourself first” concept: “But I don’t have any room left to save.” For most people, this is just an excuse. There is always some amount of money in your budget that can be stowed away in savings—you’re just not willing to make a small sacrifice to your lifestyle. Start with setting aside a small amount in each paycheck. It could be as little as 5% or $50 dollars, anything to get started. In the classic book The Richest Man in Babylon, it is recommended to save 10% of your income. Now that the money is out of sight and out of your checking account, I promise you will not miss it or even notice it being gone! The goal, of course, is to work to increase that savings rate. Some people have a 50%+ savings rate! Don’t believe me? Start listening to the BiggerPockets Money Podcast and see for yourself.

How to Pay Yourself First

Now that the concept of paying yourself first has been properly established, let’s discuss how you should go about actually paying yourself first. The easiest and most powerful way to handle paying yourself first is to have a portion of your direct deposit from your employer go directly to your savings account. To set this up, just go to your HR department with routing and account number in hand and ask to add more than one deposit.

The next best way is to set up an automatic withdrawal for the day you get paid to go from your checking account to your savings account. This is simple and can be done from most mobile bank apps, but if you have trouble, just call up your bank directly.

The third and least effective way is to manually transfer money to your savings every time you get paid. This is the least effective way because it requires discipline. Just save yourself the headache and set up an automatic deposit. For those of you who get paid in cash, I suggest the envelope system. Define the amount or percentage you will save every time you get paid and stash that in an envelope and store it someplace safe. Once or twice a month, deposit that cash into a savings account.

Bonus: Use a savings account at a different bank than the bank you use for your everyday checking account. That way, you won’t be tempted to transfer money from your savings to your checking account for that “emergency” taco Tuesday trip. As for what bank to use, I suggest finding one that pays a high interest rate. I use Ally, and they pay 1.85% right now. Compared to .01% at most other banks, that is a LOT of extra money you earn in interest.

Related: 4 Steps to Buy the Car You Want Within the Budget You Can Afford

Pay Yourself Last

So, we have paying yourself first covered, and you are now taking steps to increase your savings rate so you can get that first house hack, invest more, or pay off those student loans. But you can kick things into high gear by also paying yourself last!

Your old method of savings was hoping there was some extra money at the end of the month and then saving that. Well, guess what? Now that you’re on a budget and taking your savings seriously, there may just be some of that money left over at the end of each month! So the day before your next paycheck, take that extra $10, $50—or, who knows, maybe even $100—and instead of taking yourself out to a nice dinner or buying your 28th pair of shoes, transfer that money straight into your savings account!

After some time. this becomes a game and you start to see how much you have left at the end of each pay period to save. Guess what? There is even an app to pay yourself last automatically called Digit. Digit tracks your spending habits, takes little chunks of money each day, and transfers that to a separate account. At the end of each week or month, you can look at the balance and send the money to savings, your IRA, to pay off debts, or even to help fund that bachelor or bachelorette party in Vegas! Digit is an easy way to automate paying yourself last.

budgeting-apps

What My Strategy Looks Like

Lastly, I wanted to share my strategy with you since it is slightly unorthodox, but it is basically completely automated. I manage all of the sales at BiggerPockets, so my income is often variable since I make commissions. I have designed my lifestyle to live off of my base salary, and all the commissions I earn are just gravy on top. I have a set dollar amount sent to my everyday checking account to live off of until my next paycheck. This money is for food, gas, and entertainment.

Then, I calculate all of my monthly fixed expenses, such as rent, insurance, car payment (my least favorite), student loans, etc., and divide that number in half. That dollar amount is then directly deposited into a different checking account. All of my bills are set automatic withdrawal from this checking account. This way, I never have to worry about paying them on time or having enough money to pay my car insurance after a night out on the town. It all happens automatically.

Next, my retirement savings are directly deposited into my accounts. And lastly, the rest of my paycheck is sent straight to my Ally savings account. I budget a solid amount for my savings on the weeks I don’t get commission payouts, but on the days I do get commission payouts, the amount sent to savings is significantly higher than normal. Of course, I add on paying myself last with the extra money in my everyday checking at the end of each pay period. I really like this method because I have the same budget for food, gas, and fun week to week, I never have to worry about paying bills on time, and my savings is automated with the added bonus of having a significant amount stashed to savings when those commission checks come in!

Alright, I know I just threw a lot of tips at you, but I think there are three actionable takeaways from this post:

  1. Create a budget and include savings as the first amount taken from your paycheck.
  2. Automate savings.
  3. Find a way to also save any leftover money you have at the end of the month, whether manually or with a tool like Digit.

As you can see, I have come a long way from that young, dumb Connor stuffing his shoebox full of cash to buy the newest video game, and I hope that this will help you become the financially savvy and secure person you deserve to be.

How do you automate savings?

Comment below!





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Growing direct homebuyer Opendoor now has $3 billion in financial backing (yes, that’s “billion” with a “b”) thanks to a sizable new investment from Japanese technology company SoftBank Group. Opendoor announced Thursday that it secured a $400 million investment from SoftBank Vision Fund, SoftBank’s investment arm. But that’s not all the funding Opendoor recently secured.



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Have we reached a tipping point in the trend of massive real estate players beginning to buy homes directly from homeowners? It looks like that may be the case, as one of the nation’s biggest real estate brands is planning to launch its own direct buying business, and its siblings may not be far behind.



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Sure, buying real estate can be a costly affair. But it doesn’t have to be. In fact, you can do it directly from your smartphone—and that’s without ever managing a property, a mortgage or dealing with a dirty tenant. Check it out.



Related: Investment Face-Off: Rental Property With 6% Cap Rate vs. REIT With 8% Return

5 Ways to Invest in Real Estate Without Owning Property

  1. REITs: REITs are publicly-traded companies that own, operate, and develop real estate.
  2. Real Estate Crowdfunding: A relatively new way to invest in real estate, crowdfunding refers to when you buy a piece of a larger portfolio and as it grows, so does your share.
  3. Tax Liens: When a property has unpaid taxes, a lien is issued and a tax lien certificate is created by the municipality that reflects the amount owed, plus interest and penalties. The investor willing to accept the lowest rate of interest or pay the highest premium will be awarded the lien.
  4. Real Estate Mutual Funds: Mutual funds own shares of multiple stocks, offering access to a pool of different REITs. By owning a piece of a mutual fund, you now own a piece of multiple REITs.
  5. REIT EFTs: A REIT EFT invests in several property-owning real estate companies at once, mitigating risk.

What’s your favorite non-property-owning method of investing in real estate?

Comment below!





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Have we reached a tipping point in the trend of massive real estate players beginning to buy homes directly from homeowners? It looks like that may be the case, as one of the nation’s biggest real estate brands is planning to launch its own direct buying business, and its siblings may not be far behind.



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JPMorgan Chase is plotting an expansion of its business in the Philadelphia and Delaware Valley area, which includes Philadelphia, the state of Delaware and the southern part of New Jersey. Chase announced Monday that over the next five years, the bank will open up approximately 50 new branch locations and add 300 new employees in the Delaware Valley region.



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MLG Capital Partners, a commercial real estate investment firm, raised $100 million for its MLG Private Fund III and is closing the door on that fund on the 30th of this month. The new fund will be used to expand MLG’s portfolio, which consists of multifamily, industrial, retail and office properties across the U.S.



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MAXEX, a residential mortgage loan exchange provider, just raised $38 million in new funding with Moore Asset Backed Fund leading the charge. Combined with its Series A round, MAXEX has raised a total of $73 million in capital since its founding in 2013.



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Water damage can occur without warning, and it can be expensive to repair. How should landlords and others who own rental properties—whether they have someone living in them or not—deal with water damage to their property?

1. Be prepared for a flood.

Water damage doesn’t always come from external sources, but if a property is in a flood zone, there’s a higher risk that it will be damaged by rising flood waters. Property owners should always be aware of their property’s flood risk. FEMA, the Federal Emergency Management Administration, maintains an online database of all properties in the United States and their associated flood risk.

One way to lower the risk of water damage to a property is to avoid purchasing properties that are in a high flood risk area, but following this strategy isn’t always possible. Being aware of the risk makes it easier to prepare for the inevitable water damage that will occur during a flood.

Related: A Natural Disaster Could Wipe Out Your Investment: What to Consider Before Buying

If the property has tenants, make sure that they’re aware of this risk as well, and provide them with supplies like sandbags and other items necessary to protect the property.

2. Act quickly.

The biggest problem with water damage doesn’t occur until after the water has receded—mold. Wet and humid environments encourage mold growth, and this growth can occur less than 48 hours after the water recedes.

If a property does flood, be prepared to act quickly. As soon as the water level drops, landlords need to visit their properties to assess the damage and work with the tenants, if there are any, to remove wet property. Drywall and insulation will need to be removed and replaced, and the frame of the house will need to be inspected for water damage. Block homes are less susceptible to water damage than wood frame houses, but they can still be damaged by rising waters.

The faster a landlord acts, the less chance there is that mold will have the opportunity to grow. Removing mold once it has started growing is a more involved (and expensive) process.

hurricane-ready

3. Make sure you know your responsibilities as a landlord.

It’s important for a landlord or property owner to know their responsibilities to their tenants in the event of a flood. The landlord is responsible for the property itself, which means they’re responsible for any repairs to the property in the event of water damage. It’s up to the landlord to repair the property as quickly as possible to make it habitable again for the tenant.

If the home is covered by flood insurance, it’s also up to the landlord to report the damage to the insurance company. If the property is in a high flood risk zone, having flood insurance in addition to standard homeowner’s insurance is a must. Most flood damage isn’t covered by homeowner’s insurance, so a separate policy is necessary.

Landlords are not responsible for any damage to the tenant’s property, which should instead be covered by renter’s insurance if the tenant has a policy. It might be a good idea to let the tenants know if the property is prone to flooding so that they can be prepared.

Related: Fires, Floods & Earthquakes: How to Protect Your Real Estate from Mother Nature

4. Stay in touch.

If a flood is likely to occur, it’s important for landlords to stay in touch with their tenants. Not only will doing so allow the landlord to stay abreast of the situation, but it also ensures that they’re able to help at a moment’s notice if something changes or an emergency arises.

Staying in touch with those living in a property also increases the confidence of the tenants in their landlord and ensures a good landlord-tenant relationship.

Floods and other water damage do happen, but landlords and other property owners can take steps to protect their properties in the event of such emergencies. Being prepared is the best defense against flooding and water damage—it won’t prevent all problems, but it will make it easier to respond when any issues do occur.

Hopefully you haven’t had to deal with water damage—but if you have, what tips would you add to this list?

Comment below!





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Rising interest rates are predicted to slow consumption and investment growth in 2019, according to the latest U.S. economics data from Capital Economics. This spike in market interest rates is already contributing to higher borrowing costs for households and businesses.



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