- Daphne, AL
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The Role of Fear in Real Estate Investing – Friend or Foe?
Some of today’s most prominent thought leaders espouse the idea that fear is the only thing keeping you from success. While that may be true in many people’s lives, fear oftentimes gets an undeserved bad rap. Fear is not always a negative thing, as it’s a mechanism used to keep us from doing things that harm ourselves. I want my kids to be afraid of being run over by a car, because it makes them look both ways before they cross the street. Most of us are afraid of being mugged and beaten, so it keeps us from walking down dark alleys at night or going into bad neighborhoods. In fact, fear was one of the main reasons for my success as an athlete in my teenage years.
Robert Kiyosaki is well known for his book entitled, “Rich Dad, Poor Dad” where he points out the differences between his real father, who was poor most of his life, and a friend’s dad who was wealthy, and taught him some fundamental truths about success. In my life, the story was more like, “Crazy Brother, Scared Brother”. My older brother and I both pole vaulted in high school, and I went on to compete at a division one college. For those of you unfamiliar with the sport, the pole vault is a track and field event which consists of running down a runway at full speed with a 13-15 foot fiberglass pole in your hands, jamming it into the ground, turning upside down, and propelling yourself into the air. Needless to say, it’s somewhat of a dangerous sport.
My brother has always contended that you have to be “a little bit crazy” to be a pole
vaulter, and with him that was certainly the case. He had no concern for his own safety, and pole vaulting just fell right into place with his life of adventure, which also included skate boarding and crawling through tunnels. In contrast, I was very conservative, a straight-A student, and DEFINITELY not a thrill seeker. Yet out of the two of us, I had much greater success in the event. So what was the secret to my success? Fear. While my brother competed with reckless abandon, I was afraid of getting hurt, so I spent countless hours on perfecting the fundamentals like form, speed, and footwork, because I knew that one misstep could lead to serious injury or in some cases death.
Starting your own business, or getting started in real estate investing, is much like pole vaulting. Too much fear is NEVER a good thing, as it causes paralysis, and will keep you from doing anything. However, a little bit of fear is healthy, because it drives you to pay careful attention to your business plan, making sure you are adequately capitalized, and that you run your numbers before ever committing yourself to a deal. Fear will force you to take calculated risks, so as to mitigate or minimize any possibility of financial loss.
On the other hand, too much fear can keep you idle and on the sidelines, and that mindset must be avoided at all costs. In a recent survey by TNS Custom Research, 51% of Americans said they would like to be self-employed, however many of them didn’t take the steps necessary to achieve those dreams. 38% cited the fear of going bankrupt as the number one reason they never took action, 37% cited the fear of an irregular income, 15% said they didn’t have enough capital & 8% said they lacked the necessary skills. While some of these are legitimate concerns when starting a business, they should never stop you dead in your tracks.
The beauty of real estate investing is that the majority of these concerns can be overcome by simply choosing a niche that fits within your level of risk tolerance. You can’t go bankrupt wholesaling properties, because you never take title to the property and never have to use your own money. You don’t have to worry about not having capital for many short sale flips, because transactional funding is plentiful for same-day closings, and doesn’t have any credit or income requirements. You don’t have to worry about an irregular income with real estate investing, because it can be done in your spare time, and you can keep your day job until you build up a consistent income from your investing efforts. And you don’t have to worry about not having the necessary skill set, because YOU have the Professional Investors Guild here to teach you exactly what you need to know!
If you’d like to learn more about how you can make money investing in real estate, join us for one of our upcoming meetings (everyone’s first visit is FREE). Or, if you’re not from the Northwest Florida area, join our mailing list or follow us on Facebook, and we will keep you updated with blog posts and online webinars that can help teach you the skills necessary to get in the game, overcome fear, and start living the life you’ve always dreamed. Questions or comments? I’d love to hear your thoughts below.
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