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What is a vision map? And why is it important?
A vision map is simply a clear picture of where you want to go, and the steps you will take to get there.
Create Your Vision Map for Financial Freedom as a Passive Investor
Many people find creating vision maps helpful, because it helps them keep sight of the bigger goal, but also allows them to know what they need to do now.
You have both the big picture and the day-to-day all mapped up out in one in one picture.
How can we apply a vision map and its benefits to real estate investing?
And what are the benefits of doing so?
For most people, financial freedom is the main goal. It’s the reason you go into real estate – to be free to do what you want, when you want, with whom you want.
That's what we're all looking for.
To do that, you have to start with a well defined purpose. You have to ask yourself, “What am I trying to achieve here?”
Is your goal to quit your job? Are you trying to control a scenario? Are you trying to get back your time or be with your spouse more?
Articulating that clear vision, knowing your North star, is your first step.
The second step is to look at your your freedom number.
We also call this your rat race number. Basically, how much money do you need to have coming in consistently in order to quit the race race? That number will be your goal.
In this scenario, we're focused on cash-on-cash returns, and not just appreciation because you can’t buy groceries with equity, you got to buy them with cash.
From there, you can make some assumptions about your investments.
If you anticipate getting double your money back in seven years, what would that do for you?
Let’s look at some numbers here. Let's say that you know your freedom number is $80,000. If you do $80,000 a year, you can be free, you can quit the rat race.
That’s your goal. What are you going to do with that?
You have to make some assumptions.
How much is your average cash-on-cash return going to create for you for every dollar that you have invested? How many pennies is it going to give you in cash each year? You can make an assumption about the average.
If you want to get 80k a year and you know that your average cash on cash return is 8%, you can work backwards and say, I need to have a million dollars invested in order to get to that rate race number in order to hit my freedom number of $80,000.
You have $300,000 that you can invest. You know you want a million dollars, what’s your next step? You have a 700k gap you need to close. How much money can you store or put back into that every single year?
Maybe you can do 100k a year, maybe you can do 50k a year.
When you start breaking it down into all these different steps, you have your completed vision map.
You have a big picture goal, and you also know what you need to do tomorrow to start getting to that goal.
Create your vision map now to chart your course toward financial freedom.