Are you part of the vast majority of people who really want to invest, but don’t feel like you’re ready? If so, don’t worry! It took me years before I bought my first house. I understand the frustration and impatience that comes with being a beginner and having downtime. These feelings are common, and we are going to discuss some actionable steps and mindset changes to inspire your success.
The 4 Steps You Should Take
1. Learn and Network Deliberately
There are two things you need in order to be successful: education and networking. I’m convinced that these two things are the absolute most important tools to any success. And as I grow, my position on this is continuously reinforced. Does it sound too simple? It is that simple. The reason this sounds like fluff is because while many people certainly spend time making new friends and perhaps learning new things, they aren’t doing them actively and consistently.
Many people believe that investing is purely the act of buying an asset that has a direct and measurable return on investment, but that’s short sighted. Investing in your self-education and your relationships is always the best way to spend your time because they have no equal. Both are free or nearly free, you can do them immediately, and they have unlimited returns on investment.
Podcasts and audiobooks change lives, and they make information easier to access than ever. If you’ve ever listened to the “BiggerPockets Podcast” and thought, “Wow, that’s useful information,” then that’s free knowledge that later gets converted into real world investment.
What’s that return on investment? More than any house for sure. The “BiggerPockets Podcast” is incredibly valuable, but there is also an endless supply of audiobooks (via Audible, Google, or the library) that can have similar effects for similar prices. Learning is not an end game; it’s a habit. It’s important to develop this habit so that you’re constantly learning something new.
Making friends is the second half of your key to success, and it’s just as easy as the first. It’s free or nearly free, it offers abundant practice and opportunity, and the returns are limitless. If I look at any success I’ve had in real estate, it can always be traced back to a relationship I’ve built along the way. I just figured I was getting lucky by meeting a few people who could help me out—and I was lucky, but I didn’t realize that luck could be manufactured.
I recommend reaching out to people online a few times a week, ask them what they need help with, ask them to help you, be casual, and be friendly. Try everything, but do it actively and purposefully! Making a point to actively network on a regular basis will give you returns that are simply incalculable. People are going to be on the other end of every transaction you ever do, so make a career of investing in people.
2. Reduce Your Weaknesses and Improve Your Strengths
Everyone starts in different places, and everyone has different advantages. In that same line of thinking, everyone has disadvantages, too. If you can leverage advantages for your benefit, then it would seem logical that you can shore up disadvantages in the same way.
Starting with bad credit isn’t the end of the world. Even I had bad credit at one point. It’s fixable, so if this is a disadvantage for you, then it’s important to take full responsibility and get to work on it immediately. Having bad credit doesn’t just inhibit your ability to finance debt, it hinders your ability to generate trust with fellow investors. If you can’t properly manage your own finances, no one else will be willing to let you manage theirs. Take your time and work on it while you prepare to invest. Don’t consider it an unfixable problem; nothing is unfixable.
You must save money. If your finances are strapped, then get ready for sacrifice. If you want to be successful economically, it by definition means you must spend less than you earn. I personally think that making sacrifices when you’re new and have little room to do so is best; it teaches you how to squeeze margins out of your decisions.
If you learn how to run your personal finances so that they’re lean and efficient, you’ll be much better equipped to do the same when it comes to running your business. If you won’t make any sacrifices or save money in your personal accounts, it’s unlikely you’ll suddenly alter that behavior just for your business. Save money, learn to run a lean business, and you’ll be creating your own capital, which will only help as you move forward.
Along the same lines, it’s important to reduce overhead. You don’t need a car payment or expensive cable bill right now. What you need is to run a tight and efficient business. Your personal finances are practice for how you’ll run your portfolio, and you’ll most likely run them both in a similar fashion—so get good at it now.
Stop paying for unnecessary luxuries and pay down any non-return debt—that is, debt that doesn’t make you money. I am not advocating for anti-debt—I personally love debt, but it’s all in mortgages tied to cash-producing real estate. People ask if it’s better to pay off debt first before investing. Why would you choose? I suggest to do both! Save 10 percent to invest and 10 percent to pay off bad debt—or whatever figures you can come up with that will be best for you situation.
Related: How to Pay Down Bad Debt—Fast!
3. Accept That You’ll Never Feel Ready
I haven’t been ready for any house I’ve ever bought, I wasn’t ready when I joined the Army, and no one is ever ready to get married, or have kids. See a pattern here? Everyone feels this way. In fact, it’s the whole reason I wrote this article. You might not ever feel ready. That’s why it’s important to be networking, learning, and expanding in every area that you can so you feel at least a bit more confident moving forward when the time comes. Learn all you can, ask your network to see if you’re making a bad move, trust the numbers and not your fear, and as Grant Cardone said, “Commit now, figure it out later.”
If someone dropped $100,000 in your bank account today, what would you do with it? If a deal came across your desk at the same time, would you be prepared to make a decision and close? Most people wouldn’t. Most people would still be unsure of themselves because money is not the root bottleneck of their investing career; lack of ability is.
Imagine if you knew the intricate details and inner workings of the particular type of real estate investing you want to do. You’re analyzing deals daily and you know the material like the back of your hand. Let’s also imagine you have a friend with capital who doesn’t know how to deploy it. He has the capital you need, and you have the understanding he needs. Relationships and education are all that’s needed here. Money is in abundance and much easier to find when the people you know believe in your ability.
4. Be Productive Throughout the Week
Everyone has different schedules, interests, goals, and responsibilities. Here is a list of things almost anyone can incorporate on a regular basis to improve and prepare:
- Save more money/analyze your budget.
- Reach out to someone online who is doing what you want to do.
- Go to a local real estate club meeting.
- Buy coffee for a seasoned investor.
- Listen to audiobooks/podcasts in the car, in the shower, at the gym, at work, everywhere.
- Check and improve your credit score.
- Spend time analyzing deals.
- Shape your influences, and spend time with positive and ambitious people only.
- Write down your long- and short-term goals.
- Constantly take action on something.
These are things that everyone can do, and they can fill an entire week. Periods before and between investments are slow, boring, and annoying, but that is still time, and it is valuable. This is the time where you prepare, sharpen your sword, and ready for battle.
The old saying “luck is when opportunity meets preparation” is true. Prepare yourself now so when opportunity arises, you can capitalize on it and create your success. Then laugh while everyone says you have great luck.
Newbies, how are you spending your time preparing to invest? Seasoned investors, what did you find helpful when preparing to invest?
Share with a comment below!