Needs-based budgeting
Given that each NFL season lasts for just 18 weeks, athletes like Hurts don’t necessarily need to purchase property near their workplace. His deliberate decision to rent is an example of needs-based budgeting.
According to the [University of Pennsylvania, this budgeting technique focuses on securing essential spending needs first before moving onto saving, investing and indulging in luxuries.
For instance, you could decide to earmark 50% of your after-tax income for essentials such as groceries, rent, utilities and transportation. After dedicating 20% to savings and investment, your budget would leave 30% of net income for luxuries such as eating out, shopping and holidays.
Financial experts usually recommend spending no more than 30% of your gross income on housing and no more than 15% for car payments. Applying these limits while making purchase decisions could help you live within your means.
With your needs secured, you can turn your attention to saving and investing to achieve financial freedom as rapidly as possible.
Invest in real estate without the headache of being a landlord
Imagine owning a portfolio of thousands of well-managed single family rentals or a collection of cutting-edge industrial warehouses. You can now gain access to a $1B portfolio of income-producing real estate assets designed to deliver long-term growth from the comforts of your couch.
The best part? You don’t have to be a millionaire and can start investing in minutes.
Learn MoreLong-term investing
Although Hurts rents during the football season, he’s an active real estate investor off-season.
He purchased a $215,000 home in his hometown of Humble, Texas, for his father before purchasing another property for his mother in Houston, according to the NY Post. The MVP also owns a $6 million 6,000-square-foot residence in Texas along with the unit next door which cost another $2.68 million.
While he’s still at the top of his game, this extensive real estate portfolio could serve as a long-term financial safety net for the superstar athlete should he ever need it.
Similarly, setting aside a portion of your income for long-term investments in stocks, bonds or real estate could help you secure your financial future. There are a few different ways to dip your toe into real estate. One popular method is through publicly traded real estate investment trusts (REITs), which own income-producing properties, collect rent from tenants, and distribute a portion of that income to shareholders as dividends.
Another option is real estate crowdfunding platforms, which give everyday investors the chance to buy shares in rental properties without the hefty down payments or the headaches of being a landlord.
Exchange-traded funds (ETFs) provide another attractive option. The Vanguard Real Estate ETF (VNQ) offers exposure to rental income from hotels, offices and other types of properties. Since its inception in 2004, the fund has delivered an annualized return of 7.57%.
Meanwhile, the ProShares S&P 500 Dividend Aristocrats ETF (NOBL) tracks companies that have consistently hiked dividend payments for at least 25 consecutive years. Since its inception in 2013, this fund has delivered an annualized return of 10.71%.
The richest 1% use an advisor. Do you?
Wealthy people know that having money is not the same as being good with money. Advisor.com can help you shape your financial future and connect with expert guidance . A trusted advisor helps you make smart choices about investments, retirement savings, and tax planning.
Try it now
