Whether you are saving for a retirement that is still decades away or building a college fund for your high school student, developing a smart, diversified investment strategy to also include real estate will not happen by accident. If you want the finances of your future to be better than the finances of today, you need to work hard to make it happen.

1. Lexus Group Consultancy in Tokyo, Japan: Nine Tips for Creating a Smart
Investment Strategy from Scratch
Whether you are saving for a retirement that is still decades away or building a college fund for your high
school student, developing a smart, diversified investment strategy to also include real estate will not happen
by accident. If you want the finances of your future to be better than the finances of today, you need to work
hard to make it happen.
You do not have to be a savings savant or a real estate expert to develop a smart, effective and safe investment
strategy. All you need is the dedication and desire to get it done, and here are a few tips you can use to make
your plan more successful.
1. Lay out your goals. Before you start on this road, you need to know where you are going. Lay out
your short-term and long-term goals and determine your investment personality. Do you prefer to flip
real estate for profit or are you the type of investor that enjoys cash flow from single-family rentals?
2. Explore your options. Know what your options are, from the retirement plan at work to an
individual retirement account, IRA, or 529 plans for education. Laying out all the available pieces will
make it easier to develop a comprehensive investment strategy.
3. Pay yourself first. Instead of waiting until the end of the month and seeing how much is left to invest,
put your investments first. Whether that means investing automatically in a 401(k) or 403(b) or
transferring money from your checking account to ensure you have capital ready to invest in a real
estate deal, paying yourself first is a winning strategy. Remember, your income is the greatest wealth
generator.
4. Be smart about diversification. Diversifying your investments should be part of your investment
strategy. If you are investing for retirement and have decades to go, you can probably afford to take
more risk. If you need the funds in just a few years, reducing or eliminating that risk can keep your
money working without the danger of loss. Given where the real estate market is right now, I would
consider a 40/40/20 strategy. My colleague Rick Melero from HIS Capital Group and I discuss this at
length because it truly is a smart strategy to deploy. Forty percent of your activity should be in real
estate flips, 40% of your activity should be in buying cash-flowing assets (e.g. single-family rentals) and
20% of your activity should be in high-risk, high-rewards opportunities.
5. Keep your costs low. Investment costs can eat into your investment portfolio, so look for the lowest
cost products that meet your needs. If you want to play it safe, index funds are low cost and provide
exposure to a wide universe of stocks and bonds both domestically and internationally, making them

2. excellent choices for most investors. In the real estate game, consider flipping one home and with the
profit, buying two rental properties.
6. Invest consistently. It can be scary to keep investing when the real estate market is falling, but the
down years are actually the best times to buy. When the market falls, every dollar you invest buys more
property, and that can make a huge difference when the market eventually recovers. Remember, this is
a long-term game; don't be swayed by short-term fluctuations.
7. Do not be a micromanager. Micromanaging your real estate investments will do nothing but
increase your stress level, so avoid daily checks of your account balance. It is important to review your
passive investments once or twice a year, but micromanaging your accounts will get you nowhere.
8. Be smart about taxes. When you make money on your investments, Uncle Sam will want a cut, but
there are things you can do to reduce the pain. Keeping your real estate investments in self-directed
retirement accounts, which are taxed when you take the money out, is one smart way to reduce your tax
bill and keep your investments growing.
9. Ramp up your savings. Getting started is often the hardest part of investing, but once you are
started, it is just as important to ramp things up. If you are currently investing 6% of your earnings into
your real estate investing strategy, make it 7% next year and 8% the year after that. This escalation can
give you the discipline you need to ramp up the savings over time, and that will be good news for your
portfolio.
Developing a smart investment strategy will not happen by accident, but if you work hard and consistently, it
will happen over time. The tips listed above can help you get started, and as your comfort level rises, you can up
the ante and invest even more.