If you want to invest in real estate, you’ll need a few things: a property, an income source, and some cash. If you’ve got all three, you should be able to finance your way to owning a rental property, but this becomes a little more challenging when you’re someone with fluctuating income. Entrepreneurs, especially those without a consistent client base or consistent schedules, have a seriously hard time tracking, budgeting, and saving their income which changes every other month.

Chelsea and Wade feel this way as well. They’re both entrepreneurs, but, as a filmmaker, Wade has far more fluid income than Chelsea does. Some months Wade will bring in tens of thousands, while other months, nothing. Chelsea can subsidize the household budget with her more regular income, but even then, the couple needs to keep a strong safety reserve to ensure they’re never going too over budget without their bank account being refilled.

Thankfully, Chelsea and Wade are very good at managing their money and may actually have too much of it. They’re looking to dive into real estate investing to start building a path to financial freedom. With a serious amount of safety reserves, they’re thinking of buying a short-term rental as their first investment property. But, does their inconsistent income threaten their vacation rental plans?

Editorial Correction: We stated that gains in a 529 Plan account would be forfeited if not used for educational expenses. This is incorrect and we apologize for the mistake. If you’d like to know more about the 529 Plan rules and regulations, please visit this blog post: https://www.nerdwallet.com/article/investing/529-plan-rules?fbclid=IwAR0vq-a-lxlMG8580sRf_mAZo7wiYh8EQOIlm4hZi_S7pWgXFGO6ORLCyZo

Thanks to our wonderful BiggerPockets Money Facebook Group members for pointing out this error! Happy investing!

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Join the BiggerPockets Money Facebook Group:
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Episodes Mentioned in Today’s Show:
Preston Cooper: https://www.biggerpockets.com/blog/biggerpockets-money-podcast-251-preston?utm_source=youtube&utm_medium=description&utm_campaign=none &
https://www.biggerpockets.com/blog/why-40-of-masters-degrees-arent-worth-it-and-which-are-w-preston-cooper?utm_source=youtube&utm_medium=description&utm_campaign=none
Robert Farrington: https://www.biggerpockets.com/blog/money-297?utm_source=youtube&utm_medium=description&utm_campaign=none & https://www.biggerpockets.com/blog/biggerpockets-money-podcast-267-robert?utm_source=youtube&utm_medium=description&utm_campaign=none
Zach Gautier: https://www.biggerpockets.com/blog/biggerpockets-money-podcast-64-scholarships-ways-pay-college-zach-gautier?utm_source=youtube&utm_medium=description&utm_campaign=none
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What Do Loan Originators/Underwriters Look For?
https://www.biggerpockets.com/blog/2014-02-12-finished-self-employed-looking-credit-loan-originatorsunderwriters-look?utm_source=youtube&utm_medium=description&utm_campaign=none
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How to Plan for Inconsistent Income as an Entrepreneur:
https://www.biggerpockets.com/blog/biggerpockets-money-podcast-218-roshan?utm_source=youtube&utm_medium=description&utm_campaign=none
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It’s Not Too Late to Join the Short-Term Rental Investing Game:
https://www.biggerpockets.com/blog/short-term-rental-market-watch?utm_source=youtube&utm_medium=description&utm_campaign=none
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Want to Be a Guest on the BiggerPockets Money Show? Apply Here:
Guests: https://www.biggerpockets.com/guest?utm_source=youtube&utm_medium=description&utm_campaign=none
Finance Friday: https://www.biggerpockets.com/financereview?utm_source=youtube&utm_medium=description&utm_campaign=none
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Connect with Scott and Mindy on BiggerPockets:
Scott: https://www.biggerpockets.com/users/scotttrench?utm_source=youtube&utm_medium=description&utm_campaign=none
Mindy: https://www.biggerpockets.com/users/mindyjensen?utm_source=youtube&utm_medium=description&utm_campaign=none

Episode 306

Show notes at: https://www.biggerpockets.com/blog/money-306?utm_source=youtube&utm_medium=description&utm_campaign=none

00:00 Intro
02:37 Income and Expenses
07:15 Assets and Liabilities
09:27 Financial Goals
12:10 Emergency Reserves and Cash Savings
17:14 Investing in Short-Term Rentals
35:18 Investing for Your Kid’s College
43:05 Self-Employed Health Insurance
53:23 The Entrepreneur’s Ocean of Opportunity