Well, that's where it's time to start thinking about the details of the third step: the strategy you'll use to pursue your goal. It's an unusual way to look at it, but I find it useful – because it tells you (given your timeframe and your goal) how much heavy-lifting your strategy will need to do to keep you on track.Think of it like this: if you had £10m in the bank and your goal was to make an income of £5,000 per month within a year, you wouldn't need any strategy at all.
You could just use your £10m to buy properties, anywhere – you wouldn't need to maximise the rent, manage them well or even keep them all occupied at all times!
You'd be able to buy so much property that you really couldn't fail.
Often, people have nothing more than vague thoughts like “”.
It might feel like sitting around planning is just delaying you from getting out to look at properties and start making money.
It certainly doesn't need to be 100 spiral-bound pages of projections and fancy charts.
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In fact, the best plan would be so simple that it fits on the back of an index card – meaning that you can commit it to memory and use it to drive every decision you make.To give a cheesy analogy, you can't plan a route unless you know where you're starting from.Working out your starting point is the easiest part, because it involves information that's either known or easily knowable to you.So, if you've got £100,000, you can generate a (pre-tax) profit of £10,000 per year – or £833 per month.That's unlikely to be enough to hit most people's goals – but then there's the factor.That's a great start, but for most people it'll produce an uncomfortable insight: the gap between where you are and where you want to be seems impossibly large!With the resources you've got now, how are you possibly going to reach your goal in a sensible period of time?I suggest having at least six months' expenses in the bank at all times: the last thing you want is to plough every last penny into investments, then lose your job the next day and be unable to pay your bills.So now you know where you're starting from, where do you want to end up? And just as importantly, when do you want to have achieved that?The same is true for “when” – and it's an often-ignored factor that actually cuts to the heart of the most basic of investment decisions.For example, take a choice between two properties: If your goal is to create a certain monthly income within three years, the Property 1 is likely to be a better choice.