Expert Advice by Paul Wilson
Goals are vital to success in any endeavour in life and goals in property investing are no less important. When investing in property is new to a person, the investor often sets goals, often with the assistance of an experienced property investor. But sometimes after the initial excitement of reaching the first goal of simply purchasing a property or two, a property investor begins to relax on re-setting his or her goals. This is a mistake, for in reality, the only way to really build a strong portfolio is to continue upping your goals.
You may have heard the expression, “If you're not growing, you're dying.” To whom this is attributed has been fairly lost to time for it is ages old, but Bill Gates related it in his book, The Road Ahead and even investment mogul Warren Buffet has used the expression. The way Gates used it was interesting because he related a “downward spiral” that tends to occur with companies which do not continue to grow. In other words, a business that does not continue to grow its holdings soon finds itself shrinking in size.
To a large extent, this is true with property investing. As any wise property investor will tell you, the best way to have a strong portfolio is to continue growing that portfolio. Growth is a protection against problems. For instance, if a person has only one property, a disaster such as a fire can severely harm the total portfolio whereas if a person has two properties, a fire at one will only adversely affect 50% of his or her holdings. Naturally then, the more properties a person has, the more likely that a problem with one can be minimised or mitigated by the remaining properties. So having a larger portfolio simply makes good business sense.
So how do you keep upping your goals?
You simply keep raising the bar. The expression “raising the bar” comes from the sport of high jumping. As a high jumper trains, he or she sets the bar just higher than the last successful jump. Then after successfully jumping over that height several times consecutively, the bar is raised. In this way, the jumper is able to continue jumping higher and higher.
The same technique is used throughout the world of sports, but in business we often forget to think in such terms. The trick is to not raise the bar too high for in so doing, a person tends to become frustrated. Frustration is dangerous to reaching goals. So be sure to pick a goal and a time frame for reaching that new goal that is just as reasonable as the goal your mentor helped you develop.
Essentially, a goal is like the Chinese Proverb which states, “Every journey of 1000 Kilometers begins with a single step.” But once a person has reached the destination, there is always somewhere else to go and this requires taking yet another step. In addition, it helps to determine smaller goals along the way to serve as sign posts that you are heading in the right direction.
For instance, after you have reached your initial goal of say, ten properties in your portfolio, why not then set a new goal of paying off a certain number of them in a certain amount of time? Or perhaps you could set a goal of making them all cash flow positive. You could even set a new goal of adding still more properties. The list of possibilities is endless so whenever you reach one goal, simply create a new goal. As long as you are moving in a positive direction, your portfolio will continue to grow and become stronger.
So keep upping your goals in property investing for in so doing, you will only grow your portfolio and become far stronger as an investor.
Paul Wilson is an Independent Property Investing Expert and the founder of We Find Houses, Educating Property Investors & We Find Finance. Paul has been educating and coaching investors since 2001. Paul provides valuable, independent guidance and support by teaching strategies on how you can invest successfully while protecting yourself from commission hungry sales agents and property spruikers. Protect yourself with knowledge, contact Paul today for a complimentary consultation on 1800 600 890 or email email@example.com
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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.