MILLIONAIRE Mindset Vs. None-MILLIONAIRE Mindset

51 Replies

On the BiggerPockets website everyone has an equal voice. An equal opportunity to read and post as anyone else (as long as the poster follows the BP posting guidelines of course - which is understandable).

I have learned from people much wiser than I to be selective in the advice and opinions I listen to. Specifically I have been taught to read, listen to, and associate with the people that I admire or would like to become like.

I have been reading a recent post about all the negative aspects of real estate investing and how most investors really lose money and the ones that talk positively about investing in real estate just want to sell you their book or get you to listen to their podcasts where they get paid by their advertisers. 

Because everyone has an equal voice on BiggerPockets I wonder if all of the posts on here bring up the below average investor’s mindset but also bring down the above average investor’s mindset. I’m not advocating limiting the posts to only those people who are wealthy standing in a room talking about their real estate, but boy would I like to be a fly on the wall in that room soaking up only the real keys to success rather than listening to or reading the opinions of people who are below average investors.

I don’t mean to sound like an elitist, I am just wondering if anyone else has felt the same way.

Those naysayers will soon be gone. Usually wannabes lose interest after a certain time, if they don't do anything, as they would have to admit to themselves that they don't have the right mindset for real estate, when it's much easier to tell themselves that they're too busy with............to spend time reading. 

Not sure about 'millionaire mindset' though. That sort of puts a line , when there are plenty of people who might have the right mindset, but maybe they're flipping and or wholesaling and are not holding on to their properties and might not have a million accumulated in cash, but who are very active in the field. 

@Michaela G. I know that here are a lot of people who are active flippers or wholesalers who may not have 1 million in cash. But I am not looking for the opinions of just active investors. I am looking more for the opinions of really successful investors. I want to know what they are doing and how they are doing it rather than reading from someone who may be active but may not know how to be really successful.

Well, that depends on your definition of 'successful'. If you count success only on the number that you have in your bank account - yeah, then you do sound elitist. 

While I do have those elusive 7 figures - I'm out!

I think its valuable to receive information from those that have been able to scale their real estate business to that 7 figure level, but I also find it just as valuable to hear from those that are just starting out, or have smaller portfolios. You can learn from everyone around you, regardless of income level, background, or location. Everyone knows something you don't because they are exposed to different experiences. While quality of information may not always be the greatest from some of the posters here, there may be things that those smaller real estate investors know that can help your bottom line, simply because they are riding a lot finer of a line between profit and loss and are more prudent to it. There are many things that the more experienced investors may not even consider because their cash flow is much higher and their tolerance to small, marginalized losses are a lot higher. 

@Carol Desantis I get what you are saying.  I believe that you can learn things from everyone you meet, whether good or bad.  Also, if you are starting at the bottom of a mountain it may be difficult to be lifted up by someone standing on the top of the mountain but you might be able to be lifted up by someone who is a little farther ahead of you on the mountain.  So I see the benefits of listening to and learning from people who may not have already achieved their success but that are on their way to doing so.

I guess the purpose of this post is to take a look at when people share their philosophies of investing, to consider the person who is sharing that philosophy and ask your self - Do I want to adopt the same philosophy?  Do I want to believe the same thing that this person believes?  Do I want to be where this person is in regards to their investing success?

I read a lot of negative threads by people who insist that investing is a certain way (the way that they have experienced it) and they propagate their message of negativity and then they are praised for doing so by others that have similar mindsets and, like the media effect, the loudest opinions or most repeated opinions are looked at as true because so many people appear to be supporting that way of thinking.

I know the post you are talking about, and I recognized it as a lot of jadedness, but as someone who has dealt with most of what he was bitching about, I saw a lot of grains of truth to it.  

On the other hand, I dont really buy into the "above average investor" talk or "millionare mindset" stuff. But, thats because I know my personality is different from the people who say that sort of stuff.  

I'm not a wheeler-dealer transactional type. Those types of people are kind of like an "engine" that needs constant fuel to keep that energy going. Realtors, flippers, wholesalers, etc, who complete a project and then need to hurry up and find the next thing. 

For those types of people, they need the optimism and encouragement, and to keep a positive outlook.  Those are the sorts that think in terms of their mindset and if they are an above-average investor.

For me, I'm a bit deeper in the mud. I think the transactional types look down on people like me. I self-manage, I do as much of my own work as I can, I hunt and hunt and hunt until the "right" deal comes along and then I pounce aggressively. I know exactly what I'm looking for and I know what I'm going to do with it when I get it.  Also, this isn't my day job, this is me trying to aggressively (but patiently) build wealth for myself using the tools and resources I have.   

I think the guy that wrote that post is a lot like me, in that the non-transactional types dont entirely trust the transactional types because we know they just want to do some sort of deal and move on.  We're also in the mud so we get a lot of mud on ourselves. 

That leads to some jadedness. I've thrown more than one shady contractor off my property. I think most realtors are complete bozos. I dont trust anything anyone tells me in terms of numbers. I think scammers and corner-cutters are everywhere in REI. I think the up-talkers/book-sellers are selling fuel for those that need it for their "engine." I dont.

I really identified with that post and voted it up. But I will keep on doing what I do because I've done it long enough now to know my method is working.   

I'm not sure if I really addressed what you were asking, but there's just so many different personality types and different ways to success in REI that it makes sense there will be disagreements and clashes on the softer stuff, like outlooks and mindsets.

@Michaela G. Definitions of success may vary from person to person, but since we are on a real estate focused website, I want to focus the the definition of success to mean that your real estate has brought you either substantial wealth or monthly income or has enabled you to have much more freedom than you otherwise had. 

As someone who has accumulated the degree of success that you have, what would you say, in terms of the mindset that you have, has helped you most achieve your success?

"The future favors the optimist"

You don't have to spend much time on this site to learn a LOT, and from really smart people. They shine around here, they stand out, and they set the tone for the culture, in my opinion.

This place doesn't have the feel of "blind leading the blind" nor does (really) bad advice linger or get repeated in some grand way. This place is productive, valuable, and provides a positive and ambitious outlook towards investing, this isn't something you can build into a website it's a reflection of the active community.

Everyone has an equal voice here, but most don't use it, most of us are here to listen. Certainly no online community is perfect, but you'll be hard pressed to find another website with such an active group of people trying to help each other,  the overall humility of beginners here, and the fact that this place produces millionaires all the time.

What I'm trying to say is bigger pockets is perfect, why can't you see that?!?! ;) ;)

Originally posted by @Shiloh Lundahl :

@Michaela G.

As someone who has accumulated the degree of success that you have, what would you say, in terms of the mindset that you have, has helped you most achieve your success?

 I don't have the 'money, money, money' mindset that you want to learn from. I'm just doing something I like and I happen to make money from it. So, that's why I wrote 'I'm out' as far as this thread is concerned. 

I have gotten great real estate investing advice from people who have more money and experience than I can quantify and I have gotten great advice from a person I pay $20 a month to mail letters for me. Be modest, keep your ears open and definitely sniff out the people who are full of crap about REI (there are plenty of them).

@Shiloh Lundahl

I think you are asking the absolutely right questions!

You have to be able to source the information that you are receiving and determine and be able to qualify that information.

In Sales, it's done all the time with Leads. Leads come in, but 95% of it maybe garbage. By Qualifying the Leads, you can get to the people who need your product or services as quickly as you can without going through the pain of wasting a lot of time and money.

Even in educational facilities, I think the first question people need to ask is given the Education that was given to the Student who Graduated the program, is that person now employed in the area that he was Educated and at what Salary?

I've learned to ask this question because most of my properties are in Neighborhoods in Brooklyn where there are a lot of Colleges and Universities. I get to see a lot of the Graduates, their professions and their current salaries as they apply to my Apts as tenants.

I will tell you that I'm not surprised that a lot of these Graduates are either not employed in their field of study or not making as much money as you would expect from someone Graduating from a prestigious school, etc.

Some of the stories are heartbreaking. I had one tenant who graduated Harvard with a Performing Arts degree. I can't even imagine what her debt would be. She wound up working at a Nanny, a Waitress and currently, a Personal Trainer. She couldn't qualify as my tenant without a roommate that was extremely qualified.

Over the years, I started to be very discriminating on the information and advice that I am given.

If it's education, i want to know the success rate of the Graduates overall. Then I want to know the success rate of the specific profession. And then I want to compare the Cost of that Education with the Salary of that profession.

If it's Financial Services, If someone wants to sell me a financial product, and there are plenty of people that do, I want to make sure that they know what they are talking about. So I ask them to show me that they themselves are financially sound by asking them questions in the same way I ask a tenant... how is your Credit Score? What is you annual salary? 

It maybe funny, but I need to get to know the people who could potentially steer me the wrong way with my hard earned money. But I make it a point. If I am doing much better than you, the Financial Advisor, then your advice is suspect. It may be good, but If I am doing better than the Financial Advisor himself, especially in measurable metrics like overall Internal Rate of Return (IRR), then I'm probably much better off with my own advice and not switching it around.

I am completely in agreement that you need to qualify and discern any advice you are given. That includes Guru classes, BP, etc. I really would like to know any statistics that are available with the Guru Class Graduates, especially. If you don't know those statistics, I think you are buying a program blindly.

I also want to mention that experience is not actually the only metric you need when seeking advice.

For example, I have seen plenty of people try to give marriage advice. The funny thing was that one guy that was giving Marriage Advice claims he knows all about Marriage because he was Married 5 times! haha! Really? Should anyone take Marriage advice from him?!

When it comes to Investing, I like to say that while you are looking for advice from a Good Investor, it may be difficult to understand who IS a GOOD Investor.

Looking deeper into it, you can say that a Good Investor is someone who has made money. HOWEVER, this may not be true at all. If you bought ANY Investments outside of Detroit since 2010...... it is actually VERY DIFFICULT to LOSE! You could have probably kept your eyes shut, thrown a dart at a map, and bought a home or Investment anywhere and made some money!

In fact, I know several people who did something like that. They were really clueless why they bought where they did, and mostly because they just wanted to own their own home and not pay rent. Over 10 years, their home became every expensive! One of them decided to call himself a Real Estate Guru... but really, he just got LUCKY.

So, making money doesn't mean you are good if you made money when everything is going up. That's the point.

So, how do you tell a Good Investor from a Lucky Investor? There really seems to be only one way... the Investor needs to go through a downturn. If that Investor did not, then you can't really tell.

If the Investor survived through a downturn without much damage, then that Investor is PROBABLY good and not just lucky. If the Investor broke even during the down turn, then it's more likely the Investor is Good versus Lucky. If the Investor made money not only before the down turn AND also during and AFTER the down turn.... that Investor IS GOOD, without a doubt.

That's one reason why I sometimes let people know that I have 2 decades of Investing, went through at least 3 down turns, and have done GREAT during each of those cycles.

So, to me...... you are absolutely asking the right questions. 

@Shiloh Lundahl

@Llewelyn A.

I think you both put this very well, Shiloh in your responses and Llewelyn in your post. Discernment is critical, and in the context of this discussion we first have to understand that when we're talking about successful people's mentality, it's referring to those with money. Because with investing, success = more money. I agree with you that careful consideration is always necessary when taking advice since all it takes to appear as an 'expert' to someone is simply to know more than the person we're speaking to. We could debate about whether or not that qualifies as an 'expert' but that's probably more a fun philosophical discussion to have another time... 

As a young entrepreneur, I've noticed that people I identify as generally successful and admirable are usually 'successful' in more than just one definition of the word (e.g. not just millionaires). Success in one definition of it breeds momentum for success in others. So for example, if you're a real estate agent who is 'successful', I would also expect you to have solid relationships (marriage, kids, friendships, extended-family), be actually good or at least showing fast improvement with your hobbies, have a track record of being good at other things you've done in your life (e.g. "I worked at a coffee shop in college and by the time I was a senior, I was the manager.") The underlying and consistent driving factor is the mindset they're living with. 

To bring this back to real estate investing and who I would listen to: If they're finding success in real estate investing ( = making money), and they're having success in other areas, their opinion and advice regarding real estate will hold more weight. 

@Shiloh Lundahl how do you plan to vet out the wealth of every poster? You can read their profile, but they could be lying about their experience.

I do agree that a lot of the threads on here are from beginners and everything needs to be read with a "grain of salt". However I think it will be tough to determine exactly who is "wealthy enough" for you to take the advice of. Maybe ask BP to add a net worth indicator under each persons profile photo (kidding of course)?

@Brian Pulaski I loved your post.  Before I created the original post, I was wondering the same thing. And I thought what about having some sort of indicator that tells your success next your posts. And then I thought that that wouldn’t be very realistic. So yes, I often look at people‘s profiles as I read through the posts.  It’s true they can say whatever they want on their profile and it may not be verified, but over time, patterns of successful people start to emerge which I think is one of the more helpful things that I see and read on BiggerPockets - the similar responses from highly successful investors.

I find that much of the stories you hear on podcasts, and read in books serve as inspiration more so than a how-to.  They give you a starting point to launch from if you are confident enough to go out on the limb...and swing from the end of it. :)

@Shiloh Lundahl , I am a member of the double comma club, in large part due to real estate investments but equally because of luck in the stock market. (This tear we've been on can't last, but wow it's hard to pull money out right now...)

Real estate isn't easy. You know what else it isn't? Difficult. It's work. If you do the work, you reap the rewards. 

Yes, the 2008 downturn was a disaster that burned a lot of people. I lost $200,000 off my projected profit on the flip I was in the middle of when that all went down. My stock portfolio fell by half. 

Now I'm up 4-fold in the market, and my real estate investing is going insane. 

But I put in the work necessary to reap these rewards. Have I been lucky? Sure I have. But I've also been smart.

I think the post/vote count goes a long way to vetting the authenticity of a member. More the ratio. You have 685 posts and 602 votes. That tells me the advice you give is good. (So does reading your posts.) The members who have 9,000 posts and 4 votes are probably spammers.

I don't think the below average investors bring down the mindset of the above average investors. I know what post you are referring to, and that was kind of a downer, but I think perspectives like that are important to show that it isn't all unicorns and rainbows. 

I disagree with his assessments of many things, though. You can always find the bad. You have to do your homework. Nobody is going to walk up to you and tell you they're going to lie to you, cheat you out of money, and try to sell you stuff. You have to vet people, just like you vet deals.

Mindy Jensen, Real Estate Agent in CO (#FA100049656)
Originally posted by @Brian Pulaski :

@Shiloh Lundahl how do you plan to vet out the wealth of every poster? You can read their profile, but they could be lying about their experience.

I do agree that a lot of the threads on here are from beginners and everything needs to be read with a "grain of salt". However I think it will be tough to determine exactly who is "wealthy enough" for you to take the advice of. Maybe ask BP to add a net worth indicator under each persons profile photo (kidding of course)?

 I can spot a beginner from a mile away on these boards.  when they start talking technical terms, and all this stuff measured out to the penny on a purchase less than $200K wondering if its a good deal or not.
I understand the calculations are there for a reason.  But when they are using Cap Rates, replacement calcs for a property they are projecting to hold 30 years.  I just laugh.

All season investors buy SF and 1-4 unit properties with a 3-7 year plan, and get out strategy, at different points. Another dead giveaway of the newbie's that have listened to podcast and read tons of blogs, are they view property and tenants as someone separate.  Property is the product and tenants are consumers. Your buying the property for a certain consumer in  particular market.

I tend to take solid advice from anyone as long as their humble and not flashy. I know multiple millionaires pretty well and none of them are flashy.

One of them you’d never even guess is a millionaire and is probably better off that anyone I know.

Joan Baez said it best: "Take what you need and leave the rest". 

I don't think we're playing a zero-sum game here. I believe the net effect is to raise the overall level of consciousness of those who choose to see, hear, think, absorb, and act. If I didn't believe that, I would ditch this place, because I've got plenty of things to do such that I don't need to waste my time on a non-productive internet forum. On the whole, I believe I'm a smarter investor, more savvy landlord, and better discriminator of deals because of BP. I read things all the time that make me think "Damn, why didn't I think of that?" Over time, if you spend enough time here, you start to realize that a significant number of "Things that make you go 'Hmmm" comes from a minority of people, and you start paying a lot more attention to what they have to say. When I need to know something about taxes, if I see @Brandon Hall or @Natalie Kolodij or @Linda Weygant say something, I listen. When I am curious as to whether I'm playing it to conservative or too liberal with my portfolio, I see what @Steve Vaughan or @Nicole A. or @Joe Splitrock are up to. If I want some historical perspective, I check in with @Jay Hinrichs . And if I just need some general inspiration I read the dozens of posts of new investors that are full of spit & vinegar and aren't beat down or jaded. 

Most of the information you need is already inside you. It just takes some effort to learn how to fine-tune your channels and determine what is noise, what is irrational fear, what is solid ground. I can't think of a single thing I've read on BP that has made me do something I wasn't already planning on doing; it's just another piece of the great big puzzle. 

One thing I might add is a Millionaire is someone who has a million dollar net worth, not someone who has 2 million dollars in assets, but has 1.5 million in liabilities. So having more assets doesn’t make a millionaire.

@Shiloh Lundahl

I don’t think your question about reversion to the mean in terms of the collective knowledge on BP holds true. Most of the very successful investors I see on BP spend a lot of their posts dispelling rumors/urban myths of the experienced and trying to help. Most of them follow this quote from Warren Buffett: “We derive no comfort because important people, vocal people, or great numbers of people agree with us. Nor do we derive comfort if they don't." @JD Martin is 100% when he talks about refining your channels. Information comes at us from you many different sources that you need to spend time cultivating quality sources. This not only applies to BP, but Podcasts, blogs, newspapers, TV...

In terms of the post that you mention, I think a lot of people got up in arms about the poster’s perception and attitude toward the facts he experienced and not the actual facts themselves. I tend to agree with the majority of the statements he made, but not his outlook. Good and bad facets exist in any business/markets and the combination of all of those lead to inefficiencies. That is where we all can make money, but to capitalize on these opportunities you need to take the good with the bad and keep trucking.

I honestly believe that success is measured not by heights attained, but by obstacles overcome ( I forgot who said that, but know I’m not clever enough to come up with it by myself) Circling back to Warren Buffett, if you ask him who are best investors he knows are, he won’t say himself. He mentions people like Henry Singleton, Walter Schloss, Bill Ruane, and a host more. The one thing all those people have in common; they have nowhere near the net worth of Mr. Buffett. Luck and timing do play roles in all of our lives. For that reason I think attaching a number to success can lead you down the wrong path.

@Shiloh Lundahl   from my perspective really depends on how busy people are and really how well the type.. you take a lot of players in the business and they probably don't have time for this site and or they can't type.. old school hunt and peck.

but all in all I think this site does a nice job for those starting their journey those of us in the middle of it and those that have made it that might troll it looking for investment partners.  Or deals to do with others.

For me personally I just enjoy the break between signing escrow doc's LOL.. and of course just commenting on what has happened in the past and maybe a bunch of it is not germane to now.. but its fun to talk about anyway..

AS well as I see this site as 60% or better those that want to buy and hold.. and then 10 to 20% those that thinking wholesaling is going to get them to be able to buy and hold.. then you have the note folks the syndicators and those selling how to ..

My main thing is to the extent we can is to let folks know that real estate is NOT without risk.. some folks for whatever reason think its a for sure thing.. and this site does  a good job helping people mitigate that risk.. IE don't buy in areas you have no business buying in.. not all renters pay.. how to deal with contractors.. how to buy notes how to vette syndicators.. what is a Guru and what are they worth.. ??

that kind of thing..

If we wanted to get into how to do it.. then that's sales training and other hands on stuff and those things are time consuming and don't happen to me anyway in an internet forum and if you really want to know chapter and verse in many instances you need to hire qualified people to teach you.. just like you hire lawyers to do your docs or CPA s to do your tax's..

@Shiloh Lundahl I think BP does fall victim to the echo chamber effect. Where ideas are repeated so often that they become the gospel. (house hacking, 1% rule, driving for dollars, cash for keys, 50% rule, 10X, leverage, no money down)

There is no doubt that some core concepts have so much value, that they are worth repeating. I think the danger is when we as a community start to believe there is only one way to succeed. 

I always consider the source of information. When a mortgage broker recommends a HELOC or an attorney recommends an LLC, you have to factor in their self interests when considering their opinion.

Personally, the opinions I value the most are those that contradict my own. When you challenge my thinking, I either change my view or strengthen my opinion as I defend my view. 

Of course, even when people have opposing views, they can both be right. Truth is a matter of perspective. Even when you say millionaire, some people take that to mean cash in bank, others take it as asset value and some will say that a million dollars is not enough. (insert Austin Powers "one million dollars" reference)

Diversity of view point is the true power behind any forum. Some posts are informative, some are thought provoking and others are just good entertainment. All are welcome, but that doesn't mean everyone will agree with them.

Originally posted by @Christian Hutchinson :

All season investors buy SF and 1-4 unit properties with a 3-7 year plan, and get out strategy, at different points. Another dead giveaway of the newbie's that have listened to podcast and read tons of blogs, are they view property and tenants as someone separate.  Property is the product and tenants are consumers. Your buying the property for a certain consumer in  particular market.

Well, I disagree with that first statement.  The truly wealthy families never sell anything.  I myself just sold a 4 unit I'd had for 20 years, but 1031d into another deal because I want more passive investments.  So it's simply not accurate that all seasoned investors buy small properties with a 3-7 year plan.  

I don't have any issue with the negative post that we are referencing, for 3 reasons:

1.  That's his reality, and it's probably always going to be his reality.  Maybe if he writes it out, someone will make a comment that will change his mindset.  Probably not, but you never know.  But worth a shot.   It sounds like he drank the kool-aid (believed all the gurus) and then was surprised when it was poisoned.  (If you don't understand this reference, congratulations on being much younger than I am, and google Jim Jones Guyana Jonestown)

2.  I get calls from lots of people on BP about hard money.  Seeing their posts helps me understand their experience level and their attitude.  

3.  We all have to filter who we take advice from, and make our own decisions.  Seeing that post helps me make that decision.

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