Chase The Knowledge, The Money Will Follow

There is a common theme on sites such as this, and that is the "throw caution to the wind" mindset. Now, before the angry mob comes after me let me explain:

There is a time and place where you need to put the book down, and go put your knowledge into practice. We are all here because we value real estate as an investment in some way, and see it as a potentially life changing avenue for wealth. That said there is an issue with chasing "wealth". Studies show that many attorneys and doctors have a level of depression that is much higher than that of the general population, and these same studies often point to job dissatisfaction as the number one reason why. It would seem strange that two lucrative career paths could lead to such a sobering reality for someone in their mid 30's or 40's. 

I believe that this information is important for real estate investors, as we have all seen the HGTV programs, we have all seen the promotional info from "real estate gurus" who are here to make you a millionaire, if only you sign up for their class. We have also heard stories of people who lost tons of money by pursuing bad deals, and this usually comes from a lack of information, or market insight. I managed properties in my area for over 3 years before I ever purchased an investment, why? Because I wanted to know the ins and outs of my market, of what went into managing a property and common challenges that property managers face. It sort of worked out like a masters degree, where I got paid to participate! I learned more in these three plus years than I did in my 20 years of grade school and university education. 

There is another reason for investing in your real world education: what if you hate being a landlord? You need to know if managing properties is something that you really want to do, and you need to factor that in when you are analyzing deals. I was receiving calls in the middle of the night regarding leaks, break ins, rent increases anything you could possibly imagine. It is not an easy job. You also need to know what property managers go through, so that if you are going to hire one you know what to look for. 

We could all learn a thing or two from people who lost money because they jumped in without a full understanding of why. I love property, I love architecture, I love the different features of homes that make each one appealing to different people. For this reason the "downsides" of the process are easy for me to overcome. 

I say all that to say this, we need to stop chasing money. If you chased a law degree because you thought you would be rich, despite hating law school, you made a mistake. Investors make the same mistake all the time. Michael Jordan had a clause in his contract with the Chicago Bulls that said he could play basketball in the offseason, this is actually very unusual as teams do not want their players to get hurt playing meaningless exhibition games. The reason was that he wanted to play basketball, whether he got paid or not. 

If we all chased knowledge and understanding with the same ferocity with which we chase money, the money would find us anyway...and we would all be happier for it.