Fear of Failure - How Do You Deal?

18 Replies

It has taken me this long to get to Ken McElroy's seminal book, The ABCs of Real Estate Investing. I'm late to the party, I think! But as they say, slow and steady wins the race!

Here is a good quote, taken from pp. 14-15. 

"Show me an entrepreneur who says he or she isn’t afraid of failing and I’ll show you a liar! A bold statement, absolutely, but a true one. Everyone is afraid of failing. The difference is that some of us let that fear of failure hold us back. …I admit, when I was starting out I had an acute fear of failing. The difference is I knew that if I did nothing and remained frozen in fear, I would fail. I felt I had a better chance of succeeding by just going forward one step at a time to make some opportunities pay off. That’s the thing about fear of failure: if you don’t use it to your advantage as a motivator, it becomes a self-fulfilling prophesy." Ken McElroy

How do you deal with fear of failure in real estate investing? 


Baby steps from education to closing the first few deals. Understanding that a 80k-100k isn't going to break you. Building confidence in a system and confirming the numbers I ran on properties. It just gets easier with more exposure.

It is impossible to go through life without failing at something.  Do your best to be educated with the choices that you make and don't be afraid to take small risks.  We all learn from the mistakes that we make.

@Jason Merchey Ken McElroy is a great guy. I have met him, read his books and I appreciate all the things he's done for others in the real estate world. The part of his quote that is most true to me is "I knew that if I did nothing and remained frozen in fear, I would fail." That is precisely how I felt 10+ years ago and what convinced me to get started in real estate. People will do more to avoid pain, than they will do to obtain pleasure. 

Exposure therapy. Do a little deal. Then another little deal. Then a little bigger deal. Then you find out all of it is no big deal. 

You learn more from failing than you do from successes. I started small and got burned on the second deal.  However, I was able to turn it around and make it a positive.  Not starting is a failure to begin with, so you might as well jump in.  Just be conservative in the beginning.

Happy to chat if you need someone to talk to.

@Jason Merchey I have a little saying written in a few places to remind myself "what's worse than failure, is doing nothing at all." So, the fear of never trying simply outweighs the fear of failure. I know that, in the end, if I've been deliberate in my actions, done everything to the best of my ability, and been 100% true to my values and beliefs, then even if failure finds me there will be nothing to regret.

I try to be as Knowledgeable as possible, especially about knowing your market. The better you know your market, values and buyer /tenant expectations, the more confident you are in a deal. 

There will always be fear and doubt in anything new you do. That little voice in the back of your head telling you it won't work.  For me it's all about perspective and understanding the worst case scenario and realizing its not that bad. Worst case scenario, I suck, I screw up I lose all my money.  I still have my health, I still have another day to try, I still have my family and friends. 

Whats worst and what I fear the most is not trying and not taking action and being in the same position 20yrs from now. Telling my 65yr old self in the future. Frank, I gave up, I didn't try, it was to hard, I was lazy, the timing wasn't right, I didn't believe in myself.  That should scare you and make you do whatever it takes. It's all mindset. 

You're fear of failure is really fear of losing money, right?

When I started out, I got a coach/mentor. My coach/mentor was an experienced investor/agent. I was a bird dog for about a year and got to shadow & learn from him on his deals without risking any of my money so there was no fear. I'd also get paid a little if I found the deal. 

I think this is an excellent way for newbies to start and to minimize the fear of failure. 

1) You get to learn from an experienced investor (on a real deal - not an imaginary deal in a book or course). 

2) If they fail you get to experience and learn from that without losing any of your money (so there should be no fear).

3) You get to earn money (if you bring the deal) while you learn the biz . 

They say the only time you fail is when you quit, any other failure is just a lesson that we all must learn, but to let the possibility of something not working out stop you from trying is a sure way to not progress in life. The thing about fear is that most of the time the things we fear are not that scary at all once we face them. Action! Action! Action! is key to any successful story.

Originally posted by @Jason Merchey :

"Failure seldom stops you; what stops you is the fear of failure."

~ Jack Lemmon

In sticking with that theme, I would say, it's only a failure IF it stops you. Otherwise it's an opportunity to learn, reflect and improve!

 

I also like the idea of taking small risks, not large ones. The potential for learning might not be as awesome as when we fail big-time, but I would prefer to earn 5-8% a year and not fail than to go for 15%+ and fail 10% of the time. It's just easier that way, mentally, I think. Paul Moore talks about not "swinging for the fences," but being involved in investments that are prudent enough that they almost always cashflow, stay safe and controllable, and very slowly create wealth and freedom. HERE is that blog, right here on BP.com. 

I insulate myself as much as possible. Never have one stream of income. As a contractor I have the benefit of keeping myself diversified so that IF I fail, I still have money coming in.

I refinish tubs as my insulation against failure. Quick jobs that can raise a couple hundred for gas/food for the week.

I have never failed, I just needed more time.

Small side work does just that, buys time.

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