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Want To Prosper During These Tough Times? Eliminate These Two Things

What if I told you life was pretty simple if you want to become financially independent? Would you believe me? What if I told you by eliminating two things you could exponentially accelerate your path to financial independence? Would you be skeptical and not believe what I am saying? I know I would for sure be skeptical to listen to anyone who told me if I did two things I would be able to become financially free at a much younger age.

Well my friends, you are in luck. Time to share the secret sauce.

What’s The Secret Sauce?

Okay, before sharing the secret sauce let me make one thing clear. These things aren’t secret. I did not come up with these by myself. This has been talked about in many financial independence books and podcasts well before I started this blog or TheYoungRetireeBy33 Instagram page.

Now for the secret sauce. Figure out what your two largest expenses are in your monthly budget and ATTACK THEM! That is right. It is that simple.

Do you know what your two largest monthly expenses are? If you don’t know what those expenses are, take 30 minutes right now to figure that out. Let me give you a little help because many studies have been done about this.

For the majority of people (90%+) their two largest expenses are housing and transportation. There is a chance food expenses are higher than transportation for some, but typically largest expenses are housing and transportation.

Cool, I Know My Two Largest Expenses, Now What?

Good, have them figured out? Now determine how to eliminate or significantly reduce both of these!

How to eliminate housing expense? Ah, I thought you would never ask 🙂 house hacking is by far the single greatest thing one could do to fast track your way to financial independence. What is house hacking? I also thought you would never ask. At a high level, house hacking is renting out portions of your home (single family or multi family) while living there. To read a complete breakdown of different ways to house hack, checkout this article I wrote a few months back. Want to get a full breakdown of how to house hack from beginning to end? I have teamed up with @househackingsuccess to help get the word out about the incredible course they have put together to walk a beginner through how to house hack. If you are interested in this course, click the link here. 

How To Eliminate Transportation Or Food Costs

The next biggest expense on a monthly basis for individuals are either transportation or food costs.

Why transportation? People love lifestyle creep. The second someone gets a raise at their day job, they have already figured out a way to spend it. A lot of times this comes in purchasing a brand new car and taking on a massive monthly car payment. I have heard and talked to people my age who took on a $600 a month car payment because they felt like they had earned driving that nice new car. I usually don’t give them my two cents because I don’t want them to feel like they didn’t deserve the car. Do you really need that nice new car? You will be taking on a huge car payment and also a higher insurance bill. Don’t forget, there are many more costs to owning a car than simply the price tag.

How do I attack my transportation costs? Don’t purchase that brand new car. Drive used cars that you can pay for in cash. When you get a raise at work, invest the excess cash. Trust me, you don’t need that new car. It can wait till later down the road.

Why food? People are lazy by nature. People want to always get out and about. This typically means going out to eat more often than we should. I mean, who wants to sit at home and cook every day. Interestingly, this pandemic has made things very interesting for many individuals who would previously go out to eat all the time. I feel pretty confident hundreds of thousands of people are going to be shocked at how much money they have saved during the pandemic by not going out to eat all the time. It’s a balancing act though.

How do I attack my food costs? As humans we enjoy paying for convenience. For the purposes of food that means eating out versus cooking at home. The problem becomes the costs to eat out every meal add up quick while eating at home is much cheaper. This isn’t to say never go out and enjoy a happy hour or going out to eat with your friends every once in a while. That is not the intent of attacking food costs. The intent is to think a bit more about how much you want to go out to eat versus eating in. Simple concept but much easier said than done.

Key Takeaways:

  • Want to become financially independent at a young age? Figure out how to attack  your two largest expenses. 
  • Take time now to figure out what your two largest monthly expenses are each month. Was I right that they are more than likely housing and transportation or food? 
  • Don’t buy that new car just because you received a raise at work. Don’t go out to eat for every meal. Keep things simple. 

Follow 👇🏼
@TheYoungRetireeBy33

Always remember @TheYoungRetireeBy33 3 Core Principles:
1 – Your money should make money for you
2 – Start early to realize the power of compound interest
3 – Eliminate your largest expense by house hacking

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March Airbnb Financial Update – Ol’ Faithful

Time for a long overdue set of Financial Updates for each of my properties! I have been investing in short term rental properties for the past almost year now (along with house hacking) and I have tried to document my journey on my Instagram account. It has been a wild time with everything going on, but it is finally time to put all the numbers out there for everyone and anyone who cares to follow.

If you want to check out the update from February, click the link here.

Ol’ Faithful Financial March Update

Now time to dig into the numbers to see how March went for Ol’ Faithful. If you aren’t already familiar with Ol’ Faithful, checkout this link to read more about the property. March was an interesting month to say the least. A lot of information was just beginning to come out about the current pandemic we are in and how it would begin impacting travel was very intriguing.

Disney announced they would be closing on March 15th, 2020. This meant in the middle of the month, all of my guests would no longer be able to come to the area for the parks. The target audience for my short term rental business is people who are coming to the area for Disney. The month of March was impacted significantly. I had three guests cancel towards the end of the month and then I ended up dropping my prices by over 50%. That is when I had a fun guest book. If you don’t remember the whole cops being called to my Airbnb, you can read everything that happened at this link!

Anyways, here are the final numbers for March:

March Airbnb Financials

Income Stats

Overall, the income was pretty solid in March. This was mainly driven on a high occupancy for the month at 84%. I was able to get 26 of the 31 nights of March, but as you can see, the average nightly rate ($106) was much lower than previous months.

The main driver behind the lower average nightly rates was the decrease in prices I made due to COVID. It has been an interesting time for the hospitality industry. Especially in Orlando where the majority of our economy is driven based off the amusement parks. Once Disney announced they were closing on March 15th, that was a big hit to our industry as a whole. At the time of writing this post, Disney has yet to set out a path forward to reopen. Only time will tell.

Expense Stats

No crazy expenses to report out on this months total breakdown. There are two things I have added to the overall expense column. Taxes and Cap Ex account.

Taxes

The county takes 6% tax of your total gross income where I operate. Pretty simple calculation, but need to make sure you add it for properly calculating out your expenses.

Capital Expenditures

For now, I am putting this off to the side to handle any capital expenses that could come up throughout each month. The other month I was hit with a big $2.3k bill for replacing the pool pump. This capital expenditures account will essentially accrue and I will “pull” from it as expenses like that come up. This will help level load some of the capital expenses from understanding cash flow versus one month taking a big hit and then other months cash flow looking normal.

In future months, it will be more clear as to how exactly this will work.

Overall Cash Flow

Overall, the numbers for the month of March were okay for my property. Nothing spectacular, but all things considered, I am extremely grateful for being able to cash flow. All things considered you have to be happy with an up month during the midst of Corona.

Cash flow for the month ended at $579. Typically March is the beginning of the high season in Orlando for the parks. You have a lot of the people who are coming for Spring Break with the family to enjoy some vacation. Further updates coming to see the full impact of COVID on my short term rental business at Ol’ Faithful. It gets ugly…just wait.

 

 

 

 

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Four Ways To Become An Airbnb Superhost

Becoming a superhost helps your Airbnb SEO ranking significantly!

Have you been thinking about hosting on Airbnb and want to know how you earn superhost status?

I have been an Airbnb Superhost now for over two years and I get excited each quarter I continue to maintain my status. Maintaining superhost status can sometimes not be as easy as one would think.

Here are the four things you need to become an Airbnb superhost:

1. Completed at least 10 trips OR completed 3 reservations that total at least 100 nights

2. Maintained a 90% response rate or higher

3. Maintained a 1% percent cancellation rate (1 cancellation per 100 reservations) or lower, with exceptions made for those that fall under our Extenuating Circumstances policy

4. Maintained a 4.8 overall rating (this rating looks at the past 365 days of reviews, based on the date the guest left a review, not the date the guest checked out)

It is pretty simple process of becoming a superhost as far as the guidelines go. What is not so simple is actually hitting each of the four pillars.

I have developed processes and standards within my Airbnb business to help hit each of these four points every quarter.

Want to learn more about how to become a superhost?

Link in bio for full details!

Follow 👇🏼
@TheYoungRetireeBy33

Always remember @TheYoungRetireeBy33 3 Core Principles:
1 – Your money should make money for you
2 – Start early to realize the power of compound interest
3 – Eliminate your largest expense by house hacking