I believe gaining the investor mindset and preparing your mettle for becoming the master of your destiny is a conscious decision. Here are six steps to help you get there.
1. Set your barometer
Not everyone wants a bigger boat – in fact, most people don’t even need one.
Step one towards achieving an investor mindset is to set your barometer. It is the key take-off point for your investment journey, and your future self will thank you for making time to define this first.
To set your barometer, you need to ask yourself:
- Who are the people who make me happy?
- Do I spend enough time with them?
- What have been the moments that have brought me the greatest joy?
- How will life change over the next one, three, five, seven and 10 years?
- Can I imagine looking back with regret at opportunities missed and moments lost?
- Are there decisions I can make now that “future me” will be thankful for?
Take time to decide what type of people you and your significant others are, and think hard about what you need now and in the future to help you build upon those traits to make you a complete person (achieving success through following your passions, in the company of loved ones).
I know from my own experience that my wife Kim and I want a life that affords us time. We don’t want to be tethered to a nine-to-five existence. We want to be the captains of our own ship.
This will give us the chance to watch our kids grow into whatever lies ahead – safe, secure, cared for and well educated in all life has to offer. I know this will eventually see them grow into independent and capable human beings.
This is our barometer. By setting our barometer and aiming for our higher goals, we’ve gained the ability to fulfil our dreams. And while it’s possible to still enjoy the “toys” if we choose, they aren’t the ultimate recognition of our achievements.
By the way, our journey is far from over. But we’ve realised that the key is being true to ourselves and what we’re passionate about in life. Set your barometer first so you don’t look back in anger and regret.
2. Set your goals
Once you’ve discovered what makes you – or will make you – the best you can be, start considering which goals to aim for. Ask yourself:
- At what age would I like to stop work?
- Do I want to stop work at all?
- How much income do I realistically need to live a fulfilled life?
Some people love what they do and never want to stop working. I just believe you should work because you want to, not because you have to.
In terms of an income goal, many might believe the magic figure is $100,000 per year, but if you own your home outright and aspire to nothing more than freedom to jump in the car and travel north/south/east/west, then you may need far less.
Now is also a time to think about what lies ahead. For instance:
- Are my kids graduating into high school soon?
- Am I about to become an empty nester?
- Do I want to spend my time and energy building something brilliant?
- Do I want to try new experiences that will realistically require years to plan?
- Do I want to run the Boston Marathon? (Cool, but you’ve got to make plans around that.)
- Would I like to create my own not-for-profit organisation that builds schools in Cambodia? (Magnificent, but you need to get your actions in focus.)
Write down all those things that will be benchmark moments in your life in the next five to 10 years and beyond. These are the goals that require effort and forward thinking.
3. Create a scratch map
A scratch map is a timeline of when those things you’ve been planning are going to happen. Mark down when you’re retiring and when the kids move out. Make note of when those big events will occur.
Building a timeline helps bring most strategies into sharp focus. You may have plenty of time on your side – or you might discover you don’t have as much time as you thought.
By looking carefully at where you want to be, and the joys, opportunities and hurdles that lie ahead, you’ll start to focus on the best investment strategies to help you achieve your best life.
4. Educate yourself
There has never been a better time to get educated on the world of property and finance.
The amount of information available online and throughout the media is incredible. Almost anyone who has an opinion on property has a forum to discuss, argue and agree on ideas.
Browse the various groups and see what discussions are trending. Check if there are local meet-ups for real estate interested folk in your area. You never know who you might meet who will change your life.
Also, get out there and hit the ground running. Attend open homes, enjoy auctions, and talk with agents, valuers and just about anyone else you can find who has a property-related brain.
Don’t just concentrate on learning the success stories. I think anyone who tells you they have the magic real estate investment strategy, which provides a risk-free way to live your dreams, is probably trying to sell you something.
Others have made mistakes in the past – learn from them instead of making them again yourself. Property nightmares exist and knowing about even one can save you hundreds of thousands of dollars in bad investing.
Learning from mistakes is imperative in developing the investor mindset, because your journey will have ups and downs, triumphs and challenges. Properly internalising this mindset includes being able to deal with the risks as well as the rewards. There are many property investors out there who wish they hadn’t sold in a flurry of fear.
Long-term strategies require a landlord’s faith in the adage that long-term time in the market will become your best-ever investment.
5. Mentor up
Mentors come in all forms. Family members and friends who have already completed their investing journey can help you wade through the vagaries of what lies ahead. The best thing is that most mentors from this pool are trustworthy and have your best interests at heart.
The downside is that some family will not be on board when it comes to property investment. These people will oversell the horror stories of investments gone bad and help you relive the lousy times they’ve had in real estate. Constructive caution is fine; destructive horror tales that halt you in your tracks are not.
There are professional property mentors who will represent you and advise you for a fee. Property buyer’s agents, valuers, investment advisers and the like can assist you in the planning and process of building a portfolio.
The key is to ensure their strategy aligns with your own. These professionals should work hard to help you achieve your objectives by walking you through the process. They can help you gain not just the investor mindset but also ensure you buy the right types of property for your portfolio.
My caveat in seeking a mentor is to be cautious – this water is full of sharks. Check the conditions and proceed with safety. Do some research on any mentors or advisers you have shortlisted. Try to find an independent referee who’s already surfed these waters.
Here’s something better – contact professional bodies such as the Property Investment Professionals of Australia or the Real Estate Buyers Association of Australia. Members of these organisations are required to comply with a code of conduct to help protect consumers.
6. Surround yourself with success
I believe in the old adage that you are a product of your five closest friends. These are the family you choose and they have a profound effect on how your life will track.
I choose friends and acquaintances who reflect virtues and attributes I aspire to have myself. It certainly is a case of keeping up with the Joneses, but in this instance, you get to select the Joneses who set your benchmarks.
Having a close-knit community that elevates your best self and helps inspire you to be your best “you” will solidify the investor mindset. It not only boosts your chances of being a successful real estate investor, but also a well-rounded human being.
My advice for gaining the investor mindset is to have an open mind and seek out people who think differently from you, and other sources of information that are different from your own already established ideas. This will make you a wiser and better-informed investor.
About the author
Paul Glossop is the founder and director of Pure Property Investment. Paul has built a substantial property portfolio, focusing on the fundamentals of property investing. He founded Pure Property Investment to enable investors to experience a truly holistic approach to property investment. From the initial consultation to the acquisition of the property, Pure Property Investment is a true partner for its clients through the entire journey. We specialise in sourcing properties Australia wide that are below market value, positively geared and primed for capital growth.
Paul Glossop, Smart Property Investment, 15 April 2019