If you are a regular on the BiggerPockets Blog or any personal finance blog, you should notice a common theme. Save money, invest that money, and in the future you will have much more money that you can spend on the things you want, or you can retire early.
I believe in saving money and investing money, but I also believe that you need to indulge and spend money to make yourself happy. I am not talking about selling off all your houses or using your entire savings to go on a six month long world tour. I am talking about rewarding yourself for hitting goals by doing something fun or splurging a little bit.
Not only does setting goals make you more successful, but rewarding yourself for hitting those goals will make you more likely to achieve them and to achieve them faster.
How I Bought, Rehabbed, Rented, Refinanced, and Repeated for 14 Rental Properties
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Why Will Rewarding Yourself Make You Achieve Your Goals Faster?
Setting goals is a great way to help you achieve more in life.
Setting goals reminds you of where you are going and give you a road map of how to get there. Striving to buy 10 rental properties or to pay off a rental property: those are great goals. If you give yourself a reward for hitting those goals, then it becomes an even better goal.
Related: Follow These Five Steps to Achieve Your Goals!
Here are some examples:
- When I buy ten rental properties, I will take my wife to St. Martin without the kids
- When I pay off my first rental property, I will sell my personal residence and build a new home
- When I make $100,000 from fix and flipping homes, I will hire a personal assistant
You don’t have to have huge goals or milestones to use this technique, either. It could be something more along the lines of:
- When I make my first offer on an investment property, I will throw a party with my closest friends.
If you give yourself a reward after hitting a big or small goal it will make you want to accomplish it faster. That in and of itself will help you achieve more.
How Do I Use This Technique to Buy a Lamborghini?
I bought a Lamborghini Diablo earlier this year; in fact, it arrived on Father’s Day.
I bought this car much sooner than I ever envisioned. A couple of years ago, I thought I might be lucky if I could buy a Lamborghini at some point in my lifetime. Then I started to take goal setting and self-improvement much more seriously. That goal moved up from “sometime” to ten years.
Then I started seeing much more success, and that goal moved up from ten years to 2016. Last year, I made a goal to buy one in 2014, thinking it would be towards the end of the year — if i was lucky. I attached buying a Lamborghini with another goal: making enough money from my blog on a monthly basis to afford the car payments and monthly costs.
It is funny how things work out, but one of the big reasons I was able to afford this car was not a huge increase in my income, but the realization that the car was not as expensive as I thought it was.
- Insurance is only $900 a year
- Yearly maintenance should run $1,500 or less (including cap ex; major maintenance every 15,000 miles)
- You can finance exotic cars much like a house; 12 year fixed rate loan at 5%, 15% down
When I first made my goals about buying a Lamborghini, I thought I would have to pay cash and that the insurance, maintenance and other costs would be much more expensive. I am not suggesting everyone go out and finance a Lambo, but my blog was producing more than enough income to cover the monthly costs: I have purchased 10 rental properties, I have grown my real estate team to 9 people — and I have worked my butt off to get there.
I could have paid cash for the car if I really wanted to, but having that cash freed up for more flips and more rentals would make me more money that the 5 percent interest rate it was costing me.
What This Article Taught Me
Writing this article made me realize I need to set more rewards for myself.
After writing this article, I realized I do not have any specific rewards for my big future goals. I have many smaller goals and some rewards I have set for those, but many of my big goals are lacking a reward. I think I will start working on that right way to focus myself on those goals. When I can associate a big reward with a big goal, that also makes me think of my goals more often, which is also extremely important.
Delaying Gratification is Good — Up to a Point
We all have to delay gratification and save money to get ahead in life. But you can’t delay gratification forever, and you have to do things that make you happy today. By coupling big rewards with big goals, it forces you to save, invest or reach milestones before you give in to temptation.
How do you reward yourself? Or do you keep your nose to the grindstone, waiting for future financial freedom?
Voice your opinions below!