Being “rich” is a lot more conceptual than you think.
If your vision of wealth is Scrooge McDuck swimming through a sea of gold coins, think again. (You probably grew up in the ‘80s like me.)
Your wealth isn’t a suitcase full of cash, a huge diamond you wear around your neck, or a hidden vault behind a bland painting in your office. For most of us, our wealth exists as a bunch of ones and zeroes, on dozens of ledgers and accounts stored on servers across the world.
Even your real estate wealth is a conceptual calculus — present market value minus liens.
Consider all your disparate financial cogs: checking accounts, savings accounts, real estate investments, mortgages, retirement accounts, credit card balances, vehicles, vehicle debts, student loans, securities portfolios, 529 college savings plans — get the idea? Accounts all over the place, falling in either the plus column or the minus column on your net worth ledger. Ones and zeroes on servers.
Which is where Mint.com enters stage left, a deus ex machina to bring order to the chaos and provide a neat, tidy resolution.
How to Invest in Real Estate While Working a Full-Time Job
Many investors think that they need to quit their job to get started in real estate. Not true! Many investors successfully build large portfolios over the years while enjoying the stability of their full-time job. If that’s something you are interested in, then this investor’s story of how he built a real estate business while keeping his 9-5 might be helpful.
Mint’s First Trick: All Your Accounts on One Page
This is more valuable than it sounds. The tricks to come are undoubtedly more exciting, but it’s important to get a few things straight before we get to them.
At one glance, you can review every single one of your accounts — every balance, every bank, every lender, every piece of property. Mint pulls a neat trick where it electronically ties into each of your accounts, so it can pull balance and payment information in real time.
This top-level view of your financial life is invaluable. It’s worth reiterating: your entire financial life on one page. You can see where your finances are strong and weak, where you’re weighted too heavily in one asset class and too light in another.
Mint will also send you notifications and alerts if you want them — big payments coming up, unexpected expenses, areas where you’ve spent more than usual recently.
It’s like the central nervous system for your finances.
As a nice bonus, Mint.com is owned by Intuit, the same company that owns Quickbooks. The simple data exchange makes doing your taxes that much easier.
Mint’s Second Trick: Psychologically Making the Intangible Real
It’s such a simple thing, but to me it’s the most powerful reason to use Mint.com.
How many times have you had an extra few hundred dollars in your checking account and tried to decide what to do with it? You could buy yourself a new set of clothes — or you could invest the money and increase your wealth.
The clothes are right there in the shop window, calling to you. They’re tangible and real. But your net worth? That’s an awfully vague concept.
Not anymore. Not when you can see it rise before your very eyes. You can either watch the money disappear from your net worth as you blow it on that new set of clothes, or you can see it go into an investment account to start earning money for you.
Watching your net worth grow every month, watching it tick upward toward your magic number for your retirement or other major goal (more on goals later) makes it real. You’re rewarded for good financial decisions by seeing your wealth build in real time.
Even your real estate investments’ equity becomes crystal clear on Mint’s dashboard.
Mint’s Third Trick: Tracking Real Estate Equity
You probably guessed that Mint can track your mortgages’ principal balances in real time. Every month, it will display the new (lower) balance — which in and of itself is pretty gratifying.
But it gets better. Once you save your investment properties’ addresses to your account, Mint will pull the current Zillow estimated value (Zestimate) and display it too.
So you can watch, week in, week out, as your properties appreciate in value and pay down their mortgage debts — like a live stock ticker for your real estate equity and wealth.
Pretty cool, eh?
Good credit also matters more to real estate investors than the average bear. Fortunately, Mint will also help you keep an eye on your credit over time, helping you to make adjustments if you stray toward the dark side.
Mint’s Fourth Trick: Building Budgets, Setting Goals
Everyone needs a budget, whether they make $20,000 or $20 million in a year. If it takes money to make money, then the more money you save, the faster you start earning more money.
Mint will help you construct a budget custom tailored to your income and expenses. It will also help you spot expenses that you can likely trim to help you save and invest more money each month.
To help motivate you and clarify timeframes, Mint also has a goals feature, where you can select from common goals (like buying a property or saving for retirement) for guidance and budget calculators. Over time, they’ll track your progress toward your goal and send you notifications if you falter off course.
Structure helps us maintain discipline, which is why these centralized services work so well to keep us on track.
Onward & Upward
Mint has plenty of other tricks up its sleeve, which have less to do with real estate investing but are nice features nonetheless. They can track the individual performance of each stock, bond, ETF, and mutual fund in your portfolio. They display trends in your spending to help keep you informed about where your financial leaks are.
That which gets measured gets done, as the saying goes. If the primary goal in your professional life is building wealth, shouldn’t you be measuring it and checking your progress every week? It’s hard to know your progress if you don’t know where you are right now or a way to measure improvement. It’s not about tracking one or two accounts, but seeing the complete picture.
To come full circle back to ‘80s cartoon references, “Knowing is half the battle.”
[Editor’s Note: We are republishing this article to help out our newer readers.]
How do you measure progress on your mission to build wealth? Had success (or problems) with Mint.com? Use a different service you like more?
Tell us about your road to riches!
*Author’s Note: I am in no way affiliated with Mint.com.