For us little ‘ma and pa’ type investors, to see someone stick in the game longer than a handful of years is really not that common. For any newbies starting out, it seems the hardest part of investing will be getting going. In truth though, the hardest part of investing is staying IN the game, after you’ve started.
And its not the money or lack of that take people out.
It’s the emotion.
We’ll all been told a million times to keep emotions out and that sounds fantastic to those of us that think we are fairly logical, business minded people.
Most of us though have put our hard earned nest egg into this gig. It may be a large chunk of change or it may be small, it may be our blood, sweat and tears, it may be just a signature, but no matter what we’ve put in, we’ve usually given up something important to us, to do it. It’s the hard road, not the easy one. So when something comes along that threatens that investment, panic city strikes and often strikes hard.
We’ve been around for 15 years now. For people that built from the ground up, with no help, fumbling our way through to get here, that’s considered a very long time. In that time, we’ve seen fantastic investors come and go.
They do the Newbie Shuffle, find their way into some properties, stick around for a handful of years and after too many interrupted family dinners and vacations, a bad tenant experience or two AND having kept their head up while riding the emotional rollercoaster, they just have had enough. Yes, news headlines can affect even the toughest of stomach’s at times! Most get out and plan to get back in later when life slows down.
They walk away with some cash, and they probably did cashflow for those few years, so they definitely benefitted, but they didn’t stick around long enough to the benefits of Cashflow To Wealth ™
The number one thing an investor can do (in our opinion) to really enjoy the power of real estate is to mitigate the emotional ups and downs.
Here are some ideas that work for some:
- Having a property manager to handle the day to day stresses. (See our
- Finding a Working Joint Venture partner to handle everything for you
- Putting aside large reserves so that when things go wrong, there is money to cover it and it doesn’t uproot your life.
- Buying a select, higher end type property so you attract a higher income tenant
- Buying newer properties so maintenance, thus tenant issues are fewer
- Buying close to home so you can be hands on (if that floats your boat)
- Buying far from home so you have no choice but to be hands off
So many ideas on how to keep emotions down but by far, the only non negotiable one is to MAKE SURE THERE IS CASHFLOW.
Whether the market goes up or down, vacancies occur, unexpected maintenance creeps up….when there is money in the bank, though its not ideal, at least it won’t shake our foundation.
Money In = Emotions Out
Keep this in mind and you’ll last long enough to enjoy not just Cashflow, but Wealth.