While it is important to learn by making mistakes, one should also understand the negative impact of these mistakes and work to minimize it.
Our essential goal while we go out there and take risks is not to hit it big too soon but to avoid critical mistakes and accumulate more money than we lost. This can be done by means of generating passive income.
Only when your passive income exceeds your expenses, can you feel mentally prepared to take risks to further expand your income generating opportunities.
Learning but Being Safe
Understanding the concept of a safety net is very important. In the previous section, we talked about generating enough passive income.
This passive income is your safety net. Even if you lose everything you had, this passive income will provide you a financial cushion and help you avoid bankruptcy.
At this time, you can explore other investing strategies and take small risks with each to determine which of these works for you.
The great thing about winning or losing in a game is that it does not impact your life, but gives you the perspective and motivation to try new things.
Lessons Learned Through the Game
- It is essential to be nimble by having your income exceed your expenses as that will give you more financial freedom and flexibility to explore other opportunities.
- You will understand what is risk tolerance and how much risk you can and should take.
- Knowing how to make sense of your income and how well you did is important
- There is no hard and fast rule between paying off your debt and investing. You can even do both at the same time.
- Investing in real estate with a partner is a great idea as then you can both understand each other’s risk tolerance.
- Real estate is a tough business but if you partner with someone then you can leverage on each other’s strengths.
- You can know how real life events can impact your business and how to plan it in such a way as to be able to successfully handle them should they occur.
The Big Lessons
The game can give you a good idea about your strengths and weaknesses, and how you can test various investing scenarios to determine which ones work.
Take your time to learn before you invest. And when you invest, play it safe and do not invest a large portion of your nest egg in one deal..
Do not take big risks. Invest in real estate and watch it grow steadily over time. Buy bigger units when you have learned the game and are more comfortable with your investment outcome.
Consider purchasing land in a strategic location so then you can profit when its prices rise in the future.
Break down your investment risk appetite into smaller portions so you do not spend too much time thinking about one idea but diversity and manage risk.
If you are looking to Take advantage of the Cash Flow 101 Game