Here’s what Einstein can teach you about property investing
Real estate investing with Einstein’s wisdom. Source: Getty
Real estate investing is certainly not a rocket science, and while you don’t have to be a genius to succeed in real estate, it never hurts to learn from great minds in trying to achieve great things.
So let’s look at some quotes attributed to Albert Einstein and see how we can turn these pearls of wisdom into gains from property.
1. “If you can’t just explain it, you don’t understand it well enough.”
There is a lot to learn about real estate success and it can be overwhelming for the beginning investor.
When you are a beginner it seems like you need to understand millions of pieces of information, while successful investing boils down to a few solid, solid, and proven principles.
So don’t hurry.
Take the time to educate yourself and learn what’s really possible instead of being fooled by smoke and mirrors.
2. “Everyone is a genius. But if you judge a fish by its ability to climb a tree, it will spend its entire life believing it is stupid.”
We are all different, with different skills and different strengths.
That makes the world interesting, doesn’t it?
You will be good at some things and not at others.
It’s okay if you’re not a tax, structure, or finance genius.
Real estate investments are a team sport. So surround yourself with experts in the areas that you are not good at.
3. “A little knowledge is dangerous. That’s a lot.”
Many first-time investors jump into the market without a plan or a good team of advisors around.
They buy one of the first properties they come across, often near where they live (because it is known) or where they would like to vacation or where they would like to retire.
These are all emotional reasons that almost always lead to an investment disaster.
The problem is, these investors fail to realize that real estate investing is more of a process than just an event.
The story goes on
It starts with the strategic real estate plan for your financial success and you need a thorough understanding of real estate investment strategies and structures as well as a good knowledge of the market in which to make your buying decisions.
But there is also such a thing as information overload.
I’ve seen many investors take no action and get stuck in an analytical paralysis.
Either they are confused by the many mixed messages they keep blocking, or they spend too long educating themselves to understand “everything,” or they spend too long looking for the “perfect” investment, all of them Criteria met.
I have found that while these people wait for the market to be “perfect,” these realists are busy buying real estate and making money.
4. “It takes a touch of genius and a lot of courage to move in the opposite direction.”
This is a brilliant quote because the practice of standing against the crowd and investing cyclically is what sets many successful real estate investors apart.
Warren Buffet put it eloquently when he said, “Be fearful when others are greedy and be greedy when others are afraid.”
Sure, jumping on the cart is easy when the markets are rosy, buyer sentiment is high, and economic conditions are favorable.
But you need courage and foresight to take action when everyone else is paralyzed by fear and insecurity.
It can be daunting to go your own way instead of following everyone else, but you will enjoy many more lucrative opportunities as an investor.
5. “In the middle of the difficulty lies the chance.”
Just as every real estate boom paves the way for the next downturn, every real estate slump prepares the next upswing.
Many investors with sizeable real estate portfolios today laid the foundations for their fortunes during the troubled economic times when real estate markets collapsed over a decade ago around the time of the global financial crisis, while others helped with the real estate downturn of 2003 the growth of their portfolios started boom or the severe downturn 12 years earlier.
They took advantage of the opportunities offered by the buyer’s market of their time and then waited for time, compounding, and leverage to work their magic.
6. “The world we have created is a product of our thinking; it cannot be changed without changing our thinking.”
If what you’re doing isn’t working for you now, something must change.
When things don’t work out, most investors jump from one strategy to the next.
They are trying to get positive cash flow traits and if that doesn’t work they try the plan or look for the next “hotspot” or renovations.
However, this is rarely the solution.
Instead, investors need to become financially fluent so they can understand the economy, our real estate markets, finance tax and real estate law.
Build a good team around you, hire a mentor who can spot your blind spots, and join a mastermind group of like-minded investors to help you develop the right mindset.
7. “Anyone who has never made a mistake has never tried anything new.”
The power of all this knowledge lies in its implementation. It’s of no use unless you take action.
Some things don’t always work as you’d hoped and of course you run the risk of getting property.
If you don’t, however, you are at greater risk to your financial security.
Michael Yardney is the director of Metropole Property Strategists, which creates wealth for its clients through independent, unbiased real estate advice and representation. He is a bestselling author, one of Australia’s foremost experts on wealth creation through real estate, and writes the Property Update blog.
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