Expert Advice with Michael Yardney. 05/06/2018
Do you believe in luck?
Interestingly many of those who have been unsuccessful in life believe that wealthy successful property investors “got lucky.”
You know…they entered the market when prices were cheaper, or finance was easier, or maybe market did all the hard work for them.
I guess that’s because it makes them feel better to think that external factors made others rich, rather than something these successful investors did themselves.
Interestingly I’ve found successful investors also believed they were lucky. However, they believe they created their own good luck and shaped their own destiny by being pilots of their lives, not just a passenger being taken along for a ride.
You need the right mindset to be lucky.
Luck finds positive people – people who seek out opportunities. And luck favours the persistent. All successful investors have failed more often than unsuccessful people. They became a success at failing and survived until they became lucky and thrived.
That’s because success is a process, and a big part of that process is persistence. You never get lucky if you quit. However, you get lucky when you persist. Luck is the reward for persistence.
Fact is, those who try the hardest are the luckiest. Or, more accurately, they simply never stopped trying to succeed and their persistence eventually created good luck.
So never quit on your dream. Luck does not visit quitters.
But obviously it’s much more than that…
Luck requires work.
While an element of luck is the precursor to investment success, in order for luck to occur, you must relentlessly develop your skills and abilities. You must invest your time and energy in your personal development perfecting your skills and knowledge. You must become an expert in something.
As a property investor you must learn about the macroeconomic factors that drive our markets, the regional and local drivers of property price growth and the influencers of our property cycle and local property values.
You’ll also need a good handle on what’s happening to our economy and how the world of finance and tax relate to property.
What holds many property investors from success is the fact that gaining these skills takes time and comes with experience. I’ve often said you can’t be a successful property investor until you’ve invested through a number of property cycles.
In short, when you become an expert opportunities will present themselves because you’ll know what to look for and you’ll be ready to pounce. If, however, you are not prepared when an opportunity comes your way then the opportunity passes you by.
Some other traits of successful investors.
Those who reach the top in property investment set themselves up to get lucky because they:
1. Set long term goals – they plan to become the people they plan to become. They bring their future into the present so they can do something about it now, rather than just hoping it will all turn out all right.
2. Delay gratification – they spend less than they earn, so they can save and invest the difference, meaning they’ll have lots of money to spend in the future.
3. Understand the importance of capital growth of their assets, recognising that while cash flow keeps them in the game, it’s capital growth that will get them out of the rat race.
4. Continuously study the markets and are relentless optimists who don’t get scared by the property pessimists who worry that our markets will crash.
5. Are risk averse and, rather than speculating, invest using a time-tested strategy which allows them to say no to more so called “opportunities” than they say yes to.
6. Are decisive – while they’re not in a hurry to find a good investment opportunity, when one arrives (when luck smiles on them) they’re in a hurry to secure it.
7. Specialise rather than diversify – that’s how they become an expert in their field.
8. Treat their property investments like a business – being financially accountable and regularly reviewing their portfolio’s performance.
9. Build a team of consultants and mentors around them, recognising that this is an investment not an expense.
10. Admit to their mistakes and correct them. They are aware of their own failings but treat these slip ups as learning opportunities because they are on a path of constant improvement.
11. Don’t blame others - they take full responsibility for the results in all areas of their life because they know that ultimately they are based on the decisions and choices they made, including the ones they chose not to make. If they don’t get the results they expected, they search for a different or even better opportunity in the adversity.
12. Celebrate their successes along the way knowing if they don’t enjoy the journey they won’t enjoy the destination.
The bottom line:
Many people call the fortuitous alignment of preparation and opportunity, luck.
If that’s what you call luck, then successful property investors are lucky. But they prepare for this luck by investing in their personal development, in their skills and in their knowledge so that they become beneficiaries of luck; the meeting of preparation and opportunity.
Michael Yardney is CEO of Metropole Property Strategists, which creates wealth for its clients through independent, unbiased property advice and advocacy. He is a best-selling author, one of Australia’s leading experts in wealth creation through property and writes the Property Update blog.
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Disclaimer: while due care is taken, the viewpoints expressed by contributors do not necessarily reflect the opinions of Your Investment Property.