The more I traverse the area of wealth creation through property the more I keep coming up with the same issues. What should normally be a simple concept can become very hard to do.
Any number of things can get in our way when we’re trying to get financially free, however many of them fall under the category of being self-inflicted. So if you can look at these barriers and conquer them, you should be well on the way to creating wealth through property.
So let’s look at them one by one:
Mindset
The sad part of this is that it is all in your own mind and as a consequence could easily be changed, but you might have years of negative programming that stops you.
Consider this; we are not educated to become wealthy. You might be lucky to have a parent or relative that educated you differently, but by and large we are not programmed to create wealth. If we were why would 87% of our population retire on less than $35,000 per annum.
It might sound ever so simple, but all you have to do is to decide that you want to retire comfortably and by todays standards that is supposed to be over $60,000 p.a. Once you have made this decision you can move onto the next issue.
Become comfortable with debt
I wrote about the concept of O.P.S.M. before and that is using Other Peoples Safe Money to create wealth and by that I mean borrowing money at today’s interest rates (say 4%) and investing it at a better return than the repayments (say 8%). If you think that 4% is not a good return have a look at the dividends that many public companies give you on your shares and consider that you cannot leverage shares like you can property. So you are well in front and furthermore property doubles every seven to ten years (in Melbourne).
For instance, Donald Trump has made a fortune using other people’s money!
I’m sure he is extremely comfortable with debt.
Time Management
Like most people would-be property investors have a job and other obligations that take up a lot of their time and many of them try to do everything themselves, instead of leveraging the knowledge and/or services of professionals who have been where they are and they end up worn out and exhausted. I’ve seen it time and again.
People are excited about the wealth creation possibilities through property investing. They pick up every property investing magazine, join clubs, hang out on forums, etc., forgetting that they have other things in their life that require attention too. And while these things are great, if you don’t have a balance you burn out and give up, with another failed attempt at finding financial freedom. There is an easier way and that is to ask for help and assistance.
Lack of Market Knowledge
I make it my business to follow the property investment market and have access to plenty of information and I often hear “gloom and doom” merchants in the market place, with a vested interest in selling you something.
Are these people right? Perhaps on the odd occasion, but more often they’re not, they’re just repeating what they’ve been told.
If you have no real idea of what to look for you’re simply taking a stab in the dark when you buy an investment property and yet that can still work for you. But knowing and understanding the key market drivers is more helpful to successfully invest in property or all you have to do is ask.
In summary let me give my favourite diagram:
1.Get your mindset right
2. Get the right information
3. Create the right strategy
4. Take the right action
It really is simple and if you do not know how all you have to do is ask!
