How to Save Money: 5 Areas of Your Life Where You Can Save Serious Cash

How to Save Money: 5 Areas of Your Life Where You Can Save Serious Cash

6 min read
Dave Van Horn

Dave Van Horn is a veteran real estate investor and CEO of PPR Note Co., a $150MM+ company managing funds that buy, sell, and hold residential mortgages nationwide. Dave’s expertise is derived from over 30 years of residential and commercial real estate experience as a licensed Realtor, real estate investor, and private lender.

Beginning his career in construction and as a Realtor, Dave bought his first investment property in 1989. After years of managing his own construction business, Dave became a full-time real estate investor, specializing in fix and flips, buy and holds, and eventually commercial projects, before moving into note investing in 2007.

Over the past decade, Dave has also invested his time into becoming a connector and educator, who helps others achieve success. He focuses jointly on helping accredited investors build and preserve wealth with his group Strategic Investor Alliance and with general audiences through the annual MidAtlantic Real Estate Investor Summit.

Dave has also shared his strategies and experiences with real estate and note investing via hundreds of articles published on the BiggerPockets Blog and with his acclaimed book Real Estate Note Investing.

Dave has been featured on the BiggerPockets Podcast twice (shows 28 and 273), as well as episodes of familiar podcasts, including Joe Fairless’ Best Ever Show, Invest Like a Boss, Cashflow Ninja, and many others. He also has been a guest of Herb Cohen’s on Executive Leaders Radio, which airs nationwide.

Dave is a licensed Realtor with eXp Realty with CRS and GRI designations.

Dave’s LinkedIn
PPR on LinkedIn
PPR on Facebook

Read More

Whether I’m teaching my staff at our Friday morning meetings or teaching “life skills” to the residents at my drug and alcohol recovery house on Sunday afternoons, the principles on how to save money are still the same. Now, everyone’s goals may be different but I usually get the same question from everyone starting out and I usually respond with the same answer. How Do I Get Started Saving Money?

Change Your Philosophy

I never realized how important my own personal philosophy was until later in life.  It took me a long time to understand that it wasn’t only how I was making my money but also what type of money I was making. For example, the idea that profits are better than wages was revelatory to me.  Like the great Jim Rohn says, “Profits make you a fortune; wages just make you a living.” Now that doesn’t mean quit your job at once! You can try to start working part-time on your fortune, while working full-time making a living.  It’s not much fun going to work to pay the rent, but it is fun to go to work on making a fortune.  What I tell my folks is to learn to do both.

Even though it’s not what you make but what you keep that’s important, I still hear everyone say, ” I don’t have any money to invest.” So, why is that?


Many people find themselves saying, “I don’t know where it all goes?” This is probably because most people (and we’ve all been guilty of this at some point or another) do not stick to a budget. I always suggest keeping a journal of every dollar spent to build discipline. I also stress the importance of credit, maintaining good credit and knowing how to repair it since having good credit will save you money on everything from buying insurance to buying a house or car.  Prior to and simultaneously applying strategies mentioned below, establishing reserves is something everyone should do (a good rule of thumb is 6 months salary).  Also, making savings more automatic and painless so that it starts to operate on autopilot.  These are all great ways to make saving easier and start to build discipline so you can really make use of these five categories of your life to save money.

How to Save Money with “The Big 5”

#1. Taxes – According to George Antone’s book, “The Banker’s Code,” taxes and interest paid can account for 64.5% of your money, as well as two thirds of your time.  No wonder he stresses that we should become the bank instead of just being the borrower.

If you notice:

Employees                                                               Business Owners with Corporations

a. Earn money                                                          a. Earn money

b. Pay taxes                                                               b. Spend

c. Spend                                                                     c. Pay taxes

This is a big fundamental difference that certainly helps explain that large percentage above. So maybe it’s time for some new tax strategies. One of the biggest suggestions I can give is: If you’re serious about Real Estate Investing, start a business. If you have your own business (whether you run it in an office building or even out of your own home) the amount of money you can save can be tremendous.  Another one is to hire family members—this is bigger than you think, you can hire your child to be an assistant.  So instead of paying your child a non-deductible allowance, you’re now paying your child a deductible salary.  Also, children are allowed to make a certain amount each year in most states without paying income taxes.  Not to mention you would be getting help with your work and teaching your children in the process!

And last but certainly not least is one of the biggest tips of all for me, becoming a Real Estate agent.  Another tip is if you are a Real Estate professional (e.g. Real Estate Agent), you can take advantage of unlimited passive losses, which can offset earned income. This is the one of the primary reasons I’m still an agent today.

#2. Housing – This is usually everyone’s biggest expense, and let’s face it – you have to live somewhere.  However, if you’re just starting out, do you have to live in the nicest house you can afford (or not afford for that matter)? Especially when you could get an okay house and save the difference for the next investment.  If you don’t have kids or they’re not of school age yet maybe opt for a less desirable school district to save some money.

I know my wife and I along with our then-newborn son lived with my mother once I graduated college to save money. Now it wasn’t the most desirable scenario, but shared housing helped tremendously when I was first starting out. I’ve even taught my children to do the same with my oldest son living almost completely for free by renting out three of the four bedrooms in his townhome. And if you’re looking to buy a property to live in, keep in mind that in the eyes of most lenders, the maximum allowable housing expense is .29 times your gross monthly income or .41 times gross monthly income minus monthly recurring debt.

#3. Autos – Unless you’re my brother-in-law and you ride your bike to work or you share a car in the inner city, most of us need some transportation. We can all agree, a car drops approximately 30% in value when you drive it off the lot.  When I was first started to save seriously, I liked cars that were coming off their lease because I was getting a fairly new car for much cheaper and since it was a few years old, I could get a cheaper rate on my insurance, especially once I no longer needed full coverage. Another big question is Leasing vs. Buying.  To me, the lease works better for business use rather than personal.

I think the real answer here is to have a goal of having your business or investments pay for your car. Business is obvious; your car becomes a company car.  But, having your investment pay for the car is a little different and does require some discipline.  For example, my friend took out a HELOC (Home Equity Line of Credit) to buy a performing mortgage to pay back the HELOC payment and all but $50 of his $450/month car payment.  The cool part is the note has many more months remaining than the car loan. This is true arbitrage.

#4.  Insurance – There are many types of insurance, but from what I learned by selling insurance way back when was: if you’re just starting out it’s best to at least get some term life insurance to replace income for your loved ones that’s convertible to permanent insurance sometime in the future.  Once you convert it and build up some cash value, you can do a similar thing as the car deal above (e.g. Borrow from the policy at approximately 4%, and invest in something such as a mortgage at 18%, and make the spread, even whether you pay the loan back to the policy or not).

#5. Retirement Accounts – Once folks have gotten rid of their bad debt, and have some reserves put away, this is the next great place to put some money because nothings better than tax free or tax-deferred income.  And you can use your retirement funds for an investment – like your first, owner occupied residence (1 to 4 family, **Hint Hint**) penalty free if you are a first-time homebuyer (e.g. If you put $5000 in an IRA account you save @ $1000 in taxes).

Some Other “Money Saving” Quick Tips

Of course the tips I’ve mentioned above aren’t the only things you can do. I always was and still am a firm believer in having a second job and/or a cash business to help you save money by living off one check and saving the other for investing.  The same can be done if you’re married or in a committed relationship, because if it’s possible living off of one person’s income and investing the other’s, is an amazing way to start an investment portfolio.

We talk about all the ways to save money before buying, but don’t forget there are many ways to save when you buy that great investment.  What I’m talking about here is everything from honing your negotiation skills to developing creative strategies.  So, if you’re buying that next house try to ask at least a few times, “Is this the best you can do?”  When I buy a property I make 3 offers on every property: a cash offer, an offer with owner financing, and an offer where I’m bringing financing. Try to get the Seller to hold some paper on the property.  I won’t even buy a property without a Seller Assist. Try to get some repairs taken care of, or for the seller to pay your Transfer Tax.  Sometimes it’s how we buy that can save us the most money.

Please comment below with some of your favorite saving strategies or stories about how you saved money and enabled yourself to purchase your first investment!

Photo: Rafael Souza ®

Whether I’m teaching my staff at our Friday morning meetings or teaching “life skills” to the residents at my drug and alcohol recovery house on Sunday afternoons, the principles on […]