Forecasting

Get Your Crystal Ball Ready

Forecasting is the act of estimating how a condition will be in the future.

We've all heard the term. But how many of us actually do it. Well, probably more than you think.

Do you check the news for the weather? Listen to earthquake predictions? Read surveys? If you answered yes to any of these, then you are familiar with the art of forecasting.

So how does this apply to your real estate investing business? You now have a clear idea of what you want out of your investments and where you want to go Finish Line. And you've taken the time to write out your Goals.

But most of us are incapable of goal setting too far out into the future. We can't imagine things that are 5, 10, or 20 years away. But consider for a moment that most Japanese businesses actually forecast 100 years into the future! WOW, now that's disciplined.

So how often do you need to do it? At least annually, and preferably five to ten years out. There are several purposes for doing so:

•To make sure that your result are on track with your goals. Having goals that aren't being achieved can easily be identified through this exercise.

•You will quickly identify any areas of improvement and challenges you may face by adopting this practice as a normal part of your business.

•To help you budget for any strategies you will need to employ in order to meet your goals.

•Identify which strategies are working for you and which aren't by identifying the percentage of your revenue that is coming from each strategy.

•Determine which strategies to keep and which to eliminate based on performance.

Think of it like a massive Profit & Loss Statement of your personal and investment life. Everything you own is listed as a column, normally on a spreadsheet. It shows total revenue, expenses, assets and liabilities for each investment, and you personally as well. Also, depreciation can be factored in as well. The end result is your total Net Worth.

If you have a Net Worth today, for example, of $250K, and you have a goal to double that in five years, then a forecast will help you develop the strategies and goals you will need to undertake to accomplish this task based upon your historical data and success.

Indecision and delays are the reason many businesses fail or people simply give up. Guarantee that you will make solid and timely decisions to help you stay on track with your Goals by adopting this practice today!