What could I possibly learn from an SAS Commander that would make me a better property investor?
All things considered, it seems impossible to be able draw a comparison between the two.
There were several things struck me after spending a weekend away with an ex-SAS Commander, but one thing stood out.
It was not the harsh lesson of leaving my warm bed for a cold swag in the bush or climbing a mountain in the moonlight.
It was the process he discussed when making an important decision under pressure.
Granted that the pressure of a military servicemen and a property investor are worlds apart.
But the steps in making a decision, along with the principles, can be invaluable.
It all has to do with not rushing into anything drastic to soon, taking your time and making the right decision.
Here are my thoughts;
You are in command of a group of soldiers, the very first to touch down in Iraq during the Gulf War.
The expectations are high and the world’s eyes are watching you.
The aim is to monitor enemy forces to ensure they are not able to launch scud missiles at our allies.
After a successful few days, early one morning a soldier is running frantically toward you in the distance.
A strange figure was standing tall on a hazy horizon, was it a missile ready to be launched or some other structure.
Typically, when a missile reaches its peak and is ready, there is 10 minutes before launch.
What would you do?
As the leader, the Commander has a huge amount of responsibility, this were his actions.
- Stayed calm
- Consulted his team around him, regardless of rank
- Consulted third parties for an aerial view (Air Force) – they could not tell either
- Prepared for the worst case – to blow up the potential site (guns ready)
- Had an air patrol on standby, ready to strike on his command
- Delayed his decision to the very last minute
Finally, the haze settled and he was finally able to determine it was a building rather than a missile.
Crisis and international incident averted.
Over the past decade, life as a property investor has been relatively comfortable.
Interest rates have been at record low levels, inflation has been low and as a result, it has been easier to get into property and to hold it for the long term.
But the landscape is rapidly changing.
Interest rates are shooting up, inflation is at record highs and things are becoming more uncomfortable.
Adding fuel to the fire, is that every night the media begins every headline with talk of a housing crash.
As if that wasn’t enough, the Queensland Government recently proposed significant changes to the way land tax was calculated, that worked against investors.
Thankfully, that was hit on the head, but there is no doubt property investors remain very nervous.
Pressure continues to mount.
This is causing many to make rash decisions.
Many investors are choosing to cash in and run, rather than staying the course and many others will follow.
A recent survey conducted by the Property Investment Professionals of Australia had suggested 19% of investors in Queensland were looking to sell up due to land tax changes.
That is despite the changes not coming into effect for further 12 months.
I have also spoken to investors who feel they can no longer afford to hold their property as rates might rise too high.
Panic has overridden their initial plan to hold the property and they have elected to sell.
Time in the market is an investors best friend as it allows the magic of compounding to take full effect.
Perhaps they could apply the military principles:
- Stay calm – Any immediate decision is not necessary
- Consulted family members and assess financial position
- Consulted third parties for any aerial view – finance broker, property strategist
- Prepared for the worst case – could they re finance, top up buffers = buy time.
- Prepare for a sale as a last resort
- Delayed the decision for as long as possible
I feel the last point here is critical.
Some investors have now sold up due to proposed land tax changes, that are not going to happen.
Similarly, investors have sold property as they have taken the click bait, believing interest rates may hit 10% and property prices will fall 20%.
Although possible, to date that looks highly unlikely.
These investors have made poor decision under pressure, rather than taking a more measured approach.
The above is but one example of poor decision making.
Around 6-12 months ago, the same situation was playing out in a red, hot property market.
Both home buyers and investors were abandoning any form of rational decision making as property prices skyrocketed.
There are many lessons property investors can learn from outside the property sphere.
Be it sports, business and in this case our military.
Making important decisions are one thing but making those decisions under pressure is something entirely different.
Regardless of the situation, by following a process and a system, you will greatly improve your chances of making the right choice and averting a crisis.
Stay calm and ask for feedback to learn more about your options while preparing for the worst case, hoping it may not arrive, but being prepared if it does.
Do not rush into anything, time can be your friend as you approach any deadline.
In most cases the worst-case scenario will not play out and sticking to your longer-term plan will be the wisest choice and yield the greatest rewards.