Staying motivated on a low income?

A

AndrewT

So how do people do it? We have big plans in the future for getting into property but with our low incomes at the moment our motivation is so low. We have been budgeting what we can, and we found we could save about $400 a week. Not nearly what we would like to be putting away.

I know we are in a better situation that alot of people, but how do people stay focused. My partner and I probably won't be big 100k+ earners in the future so we really see property as the wheels to our financial freedom. Only a month or two ago I couldn't get enough of reading into PI but slowly all motivation has died down and I havent picked up a book since!

I'm determined to make a future for us, but when things are tight - what pulls you through?

Sorry for posting another staying motivated thread!

Thanks,
Andrew.
 
Chunk it down.
Set the big picture goals, then make a project plan to get from where you are now to where you want to get to.
Break it down into steps that you will take over the next 6 months, the next month, week, day etc.
Then, do something every day to move you toward that goal. It might be something as small as running some numbers on properties on RE.COM to moving $5,000 in savings to a higher interest account.
Each day you focus on and do something that moves you toward your goal.
That's how I started and I still do it. The only thing that's changed over time is the size of the goals.
 
We're low income. We worked out that if we had three houses they'd pay all the boring bills (mortgage, rates, water, phone, electricity etc) and leave all our other money for more interesting bills. Tis a pretty good motivation to sock money away - can't quite make it to $400 a week though, we simply don't earn enough, the most we can sensibly save is about $1200-1400 a month. We're slowly working on that third house but it is very slow, saving up for everything cash as it is so hard to get loans on a low income. If we earnt more, we wouldn't have to save so much.
 
high income earners, in my experience, aren't more motivated in investing than low income earners. if it's relatively easy to earn a high income, they don't think investing is a priority.
 
I can understand how you feel Andrew, this forum is great for motivation but at the same time it can make you feel like you should be achieving more. Or at least it does for me, and I don't mean any offence or negativity by that, this place is fantastic and it's great to hear people's success stories, but when you're starting out and are so far behind it can make you feel like you should be further ahead.

I think what you need to remember is, not everyone on here who has achieved what they have, is on 6 figure salaries and they were probably right where you are today at one stage. You need to start somewhere, and whilst some people seem to buy 1-2 properties per year, you may not be able to, nor do you need to. Work out what you want to achieve and then plan how you are going to get there. For example, I know that I want to have my PPOR and 3 IP's which will bring in about $300/week rent each (in today's $). Nothing extravagent, but it's certainly achievable for me. At 32 I now have my PPOR (bought on a part time salary while studying) and bought my first IP last year and have a savings plan to allow me to buy my next one in a couple of years and I am on less than $100K. If I sit here saying "oh no, I can only save $500 per week, while others are buying houses every few months, I'll never achieve that so I might as well give up, I will end up with NOTHING and working until I'm 65 then living on a pension". I'm guessing you are still young, so you don't need to have it all today so you need to start somewhere, and $400 a week I would think is a pretty good start, people do it with less.

I often think of my friend, he is my age and is building his 6th IP. He started when he was 18 and bought a lot of that on a part time wage while studying. As many people say, it's not how much you earn, but what you do with it. Motivation for me is, do I want to retire comfortably at 50 and be independant, or do I want to work until I'm at least 65 and be dependant on a low age pension and never be able to do anything other than pay the basic bills?
 
AndrewT said:
So how do people do it? We have big plans in the future for getting into property but with our low incomes at the moment our motivation is so low. We have been budgeting what we can, and we found we could save about $400 a week. Not nearly what we would like to be putting away. Thanks, Andrew.
Click to expand...

Andrew
The simple answer is work, for 10 - 15 years either hubby or I had an extra job. Write down what you want to achieve and then work out how to get there.

Good luck
Sheryn
 
AndrewT said:
We have been budgeting what we can, and we found we could save about $400 a week. Not nearly what we would like to be putting away.

I know we are in a better situation that alot of people, but how do people stay focused. My partner and I probably won't be big 100k+ earners in the future so we really see property as the wheels to our financial freedom. Only a month or two ago I couldn't get enough of reading into PI but slowly all motivation has died down and I havent picked up a book since!
Click to expand...

When we started out, we were on a VERY low wage. The thing is, that if this is what you want to do, then you need to work out what will work for you and your situation.

You might not be able to buy expensive new properties in prestige estates, but you might be able to purchase something in another area. It might not even be new. There is nothing that says that your investments have to be near where you live. So.....do some research, and find something that suits YOUR situation.

For instance, in our early years, we bought in regional Vic, a small house for $67k, today, it is only worth around $130-140k, but that is fine, it has doubled in price and the rent has increased too. We also bought a couple of cheapies in Tassy and regional NSW. So, you might not be able to purchase a $500k investment, but I am sure you could purchase a small house for $130-140k.

Most of my IP's are in low socio areas. The entry price is low, the yeild is realatively high, and I can add granny flats to increase the yeild. As the price increases, then you can use that CG to draw on for the deposit for the next one. Little by little you build on this and before you know it, you too, can purchase multiple properties each year. It just takes time, commitment, and sometimes a lot of hard work to find the areas to invest in.

BTW, until recently, we were not able to put aside $400pw consistantly due to huge sporting fees, so don't think this is out of your reach.
 
Well our household income is in the 100k+ bracket....But then we also have 3 kids. We realisticly save $500p/w. (Might possibily be able to save more, but then wouldn't be able to do anything...) So having a 'high' income isn't nessecarily going to put you that far ahead in the savings game anyway. ;)
 
We started 10 years ago on a single wage of 35k, first IP was 65k. 400 per week is a pretty good effort and will be a nice deposit before you know it!
 
I find motivation in talking to my friends who live pay cheque to pay cheque, have no plans, nothing worthwhile to their name, and 2 maxed out credit cards.

It might not feel like you're moving anywhere very fast...but atleast you're moving.
And don't forget...

Wealth is never about how much you earn, but what you do with what you earn.
 
That's the beauty of RE! It's like a market in slow motion.
You got time to enjoy your life, and slowly bit by bit work on your IPs.
Don't be in a hurry for time to go by....
 
Biggles said:
Motivation for me is, do I want to retire comfortably at 50 and be independant, or do I want to work until I'm at least 65 and be dependant on a low age pension and never be able to do anything other than pay the basic bills?
Click to expand...

That is very true. I don't think I could handle being 65 on a low pension, or being 50 and knowing I HAVE to work another 15 years.

skater said:
When we started out, we were on a VERY low wage. The thing is, that if this is what you want to do, then you need to work out what will work for you and your situation.

You might not be able to buy expensive new properties in prestige estates, but you might be able to purchase something in another area. It might not even be new. There is nothing that says that your investments have to be near where you live. So.....do some research, and find something that suits YOUR situation.

For instance, in our early years, we bought in regional Vic, a small house for $67k, today, it is only worth around $130-140k, but that is fine, it has doubled in price and the rent has increased too. We also bought a couple of cheapies in Tassy and regional NSW. So, you might not be able to purchase a $500k investment, but I am sure you could purchase a small house for $130-140k.

Most of my IP's are in low socio areas. The entry price is low, the yeild is realatively high, and I can add granny flats to increase the yeild. As the price increases, then you can use that CG to draw on for the deposit for the next one. Little by little you build on this and before you know it, you too, can purchase multiple properties each year. It just takes time, commitment, and sometimes a lot of hard work to find the areas to invest in.

BTW, until recently, we were not able to put aside $400pw consistantly due to huge sporting fees, so don't think this is out of your reach.
Click to expand...

Investing in regional areas I think will have to be part of the plan to get us into the property market. Lately I have been cruising the internet looking at suburbs like Dubbo and Mudgee, the prices out that way aren't too bad but we really want to go for a drive there to figure out where the good and bad spots of the town is.

Maybe I'll look further abroad and start researching areas in other states aswell.

Thanks Skater. Tonight I will start a spreadsheet of regional areas, and start jotting down thoughts on each with rental figures and housing prices :)

fokas said:
I find motivation in talking to my friends who live pay cheque to pay cheque, have no plans, nothing worthwhile to their name, and 2 maxed out credit cards.

It might not feel like you're moving anywhere very fast...but atleast you're moving.
And don't forget...

Wealth is never about how much you earn, but what you do with what you earn.
Click to expand...

It seems to be a common thing these days, especially among some of my friends anyway. Back 1-2 years ago, I used to be like that but thank god I opened my eyes!

Piston Broke said:
That's the beauty of RE! It's like a market in slow motion.
You got time to enjoy your life, and slowly bit by bit work on your IPs.
Don't be in a hurry for time to go by....
Click to expand...

Your right, I've just got to step back and realise there is no rush.


Thankyou everyone that replied. Just reading these posts has helped my self confidence and motivation...maybe I should come back and read these posts everyday! :)
 
fokas said:
I find motivation in talking to my friends who live pay cheque to pay cheque, have no plans, nothing worthwhile to their name, and 2 maxed out credit cards.
Click to expand...
And on closer inspection you find these people earn a phenomenal amount more than you do and you have to ask where their money *goes* :eek:

My uncle (making some ridiculous amount of money at the time) once had to borrow from my mother (who was a student at the time) to pay a bond on a rental, because he lived paycheck to paycheck and they wanted the bond at the wrong time of the fortnight ...
 
Shouldn't it be easier to motivate yourself on a low income? If investing or starting a business is the only chance you have to get rich, then....
 
Motivation

Hi Andrew T

Don't be discouraged; saving $400 a week is very good! I personally know a doctor who's living in a 1.6 million house in Sydney and he is worried sick as he is going backwards every month!

His problem was he is living in too expensive a PPOR and that was hampering his investing journey...........

Don't underestimate mindset; it can either help you or really hinder you.

Start at the lower end of the market; one at a time, out in Campbelltown way, you can find some neutral or small cash flow positive houses (i know, i bought one!)

All the best.
 
Yes, mindset is paramount. I'd rather have lower income and the right mindset than higher income and the wrong mindset for investing.
 
If you go to work on your goals, your goals will go to work on you.
If you go to work on your plan, your plan will go to work on you.
Whatever good things we build end up building us.

--Jim Rohn
 
AndrewT said:
..we found we could save about $400 a week. Not nearly what we would like to be putting away.
Click to expand...

Hey, that's quite a bit by the way....:confused:


AndrewT said:
..
My partner and I probably won't be big 100k+ earners in the future
Click to expand...

Well, there's a limiting rule right there. Why not? Why make that limiting decision for youself (and you partner while you are at it)?

You can earn whatever you want.

Cheers,

The Y-man
 

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