You will normally need some cash to get started on Real Estate Investing and most of the times you will have to save it from your income. Some Saving lessons from the book "The Wealthy Barber Returns" by David Chilton:

1) Spend Less Than You Make
-  Unless you marry into wealth or come from a rich family, you'll have to learn to spend less than you make
-  Disposable Income (DY) = Consumption (C) + Savings (S).  C is fun, S is boringC is living in the moment; S is that rainy-day crap
- It's all about balance and usually doesn't require dramatic lifestyle changes. Let's say you are currently saving 4% of your DY: $1.00 = $0.96 + $0.04
- If you reduce your Consumption by just 6.25%, you multiply your Savings by 2.5X: $1.00 = $0.90 + $0.10

2) No One Out There Really Wants You To Save
- Your kids are constantly asking for the latest and the greatest
- Friends are always suggesting a dinner out or buying a new toy that tempts you to do the same
- Your Realtor thinks you should extend your budget a little bit: “It’s more house than you need, but you’ll grow into it. Besides, it’s a once-in-a-lifetime opportunity”
- Bankers – the more you spend, the more they can lend.
- Clothiers, restaurateurs, car salespeople, tourism boards – they’re all for good reason, non-stop cheerleaders, exhorting us to spend our hard-earned dollars. And our instant-gratification-oriented minds aren’t putting up much resistance.  “I deserve it” has become many people’s mantra.

3) People Who Live Within Their Means Tend To Be Happier
- There are 3 basic needs we all share:  shelter, food and clothing. Naturally, in a developed economy like Canada’s, our desires will run well beyond our stream of needs into our pool of wants.
- That’s understandable, even healthy. Our quest for “the good life” is part of what motivates us to work hard, innovate, embrace risks, and grow our talents.  However, we’ve gone too far in our pursuit of stuff. We want more and when we get it, we want more yet again. We want what we see on TV, what our friends have, what rich people have. We want what we already have but in the newer, fancier, bigger models.
- We convince ourselves that our desires aren’t wants at all, but instead integral components of future happiness. In reality, our pursuit of “more” often distracts us from what’s truly important in life.
- One of the most damaging misconceptions in personal finance is that saving for the future requires sacrifices today that lessen people’s enjoyment of life. Surprisingly, people who live within their means tend to be happier and less stressed.

4) Don't Worry Too Much About Status
 Most of us crave status and care greatly about what others think of us.
  Psychologists remind us how unhealthy it is to have our self-esteem directly determined by the perceptions of others.
- Society grants status based almost exclusively on a very narrow definition of success.  It pays little attention to family life, community involvement or impact on others and focuses only on perceived wealth.
- What’s more, we even mismeasure this mismeasurement. We gauge people’s financial successes not by their net-worth statements, but instead by their material possessions.
- Many of our purchases are made with others in mind. From the sizes of our homes to the logos on our clothes to the brands of our cars, we’re trying to make a statement about ourselves: “Look at me – I’m worthy”.

5) Control The Lizard
- Our brain is of two minds: one part thinks logically and was the last one to evolve in humans; the other, known as our “lizard”, responds to emotions, immediate needs and desires.
- The brains of our ancestors developed to deal with the challenges of that time: immediate needs and threats. Unfortunately, millions of years later, our decisions still echo those of our ancestors – “I want it and I want it now”
- Some argue not to try to resist temptation, but to avoid it altogether. They recommend that if we have a predisposed weakness to a certain temptation, not to get close enough to it that our senses can engage to it.
- Another option is to take away the ability to give in to temptation. A woman kept her credit cards in a big block of ice in the freezer. When she came across some item that she “just had to have”, she would race home and thaw out the cards, a process that took about a day. Not surprisingly, by then her emotions had cooled and decided that she didn’t need or even want the product after all
- Credit cards are a way too easy to spend. Leave them at home on occasion.  Some own 2 credit cards: one to keep at home with a higher limit for when it’s truly needed like booking a trip, the other with a lower limit you keep in your wallet for everyday use.

6) Enjoy What You Have
- How we feel about our possessions and lifestyles is relative to those of our friends and colleagues. Sadly, we often only consider ourselves fortunate when we have as much as or more than those with whom we identify
- Expand your reference group. Look around the world, from extreme poverty to military rule to women abuse, to non-existent health care. As Canadians, we won the country-of-residence lottery
- Is it really that a big deal that your friend has a 32-jet, 6 person hot tub and you don’t? 900 million people don’t have access to safe drinking water. Annoyed that you don’t have stainless-steel appliances? Keep in mind that 1 in 6 people in the world goes to bed hungry every night
- We obsess so much about what we don’t have that it affects our ability to enjoy what we do have

7) Practice Saying "I Can't Afford It"
- Sometimes when people ask you to do something, you’ll have to reply, “I can’t afford it”
It seems to have created a sense of relief among those who’ve used it. It’s not an admission of failure; it’s an acceptance of reality and no big deal. Their spouses don’t leave them, their friends still call. The kids on the other hand, yell “Everybody else has one!” and slam the doors

8) Live In A House You Can Truly Afford
- The problem with stretching to the max to buy a house isn’t just the oversized mortgage payment. It’s also the higher property taxes, utility bills, maintenance costs. Stretch to buy your house and you’ll inevitably stretch to buy your furnishings, appliances and even your driveway decorations (cars).
- During a home renovation process many people go insane. Projects invariably go over budget. “If we’re going to redo the bathroom floor, we might as well put radiant heating”. Once the bathroom has become palatial, the kitchen pales by comparison. The 4 most expensive words in English are: “While we’re at it…”
- With a Line of Credit, borrowers can use as much of the available amount as they want, when they want. Clients can pay back whenever and, in many instances, make interest-only payments each month. In essence, LOCs are like giant credit cards but with much lower interest rates
- People have gone wild with LOCs. Some treat their LOCs like a second income. Others, when they first set it up, spend as if they’ve won the lottery
- A woman borrowed $60,000 against her LOC to renovate her sons’ bathrooms. “Don’t worry; the reno only costs me $150/month". Wrong, she forgot the principal repayment.

9) Save First, Spend The Rest
- Save first, spend the rest: GoodSpend first, save the rest: Bad
- Payroll deduction, automatic withdrawal, pre-authorized cheque – anyway you do it, just do it!
- Not when the basement is finished. Not after the next vacation. Not in a few months.  Now!

10) Don't Count Too Much On Potential Inheritances
- Inheritances, or more accurately potential inheritances, play a big role in many people’s saving decisions. Many are spending like crazy now, hoping to be bailed out later.
- It’s impossible to predict when an inheritance will materialize and how much it will be. People are living older
- Will you be 50 when the money flows your way?  60?  70? Will there be much left after your parents’ retirement-home costs and late-life health care?
- Look at potential inheritances as future bonuses and not as an excuse to avoid saving today
11) Keep Track Of Your Expenses
- Keep a detailed summary of all your expenses over a period of several months. All of them. Categorize it and it will provide and eye-opening experience as you see how your hard-earned money slips between the cracks
- The areas where people find out they are spending more than they thought are: cars, dining out and little things
- Before the exercise, people hadn’t grouped their car insurance premiums, maintenance costs and gas
- Canadians consistently underestimate how frequently they sing: “Let’s grab a quick bite”
- Nobody can believe how the purchases of under $20 add up. Magazines, cappuccinos, golf balls, movies, lottery tickets, treats for the kids, batteries, eye shadow, etc.

12) Save 10-15% Of Your Income
- Twin brothers start earning $50k/year at age 25. One saves 8% ($4k) every year, the other waits 10 years.  At age 65, assuming an 8% return, the one who started right away has $1.1 million; the other $489k. Start now!
- Don’t panic if you’re one of the tardy ones. The best time to plant a tree was 20 years ago; the second best time is now

13) Plan For Retirement
- Experts estimate we’ll need 60-70% of the average income of our last few working years for retirement
- In retirement, a number of considerable expenses from our working years probably no longer exist.

  • The kids have moved out. And back in. Then out again for good.
  • The mortgage and other debts have been paid off
  • Clothing costs have been reduced
  • Commuting expenses have stopped
  • There’s no longer a need to set aside money for retirement

- A dollar saved is two dollars earned. When you earn an extra $2 at work, you probably keep only about a buck.  There are deductions for taxes, CPP, EI, etc

14) Wisely Invest Your Savings
- The rule of 72: The years to double your money = 72 / rate of return compounded annually
- At 6% it takes 12 years, at 8% 9 years, at 12% 6 years
- Modestly better returns make for dramatically better retirements
- And this is where Real Estate Investing can make a big difference in your life