Many a new real estate investor jumps into the endeavor with much passion and excitement, only to come to the stark realization that real estate investment is not the get-rich-quick scheme many gurus claim. Yes, we all know that going in, but the many barriers between starting and success become disheartening and begin to make real estate investment feel more like a job than anything else.
The first thing to realize is that this is not abnormal. Nor is it fatal. Having just finished reading So Good They Can’t Ignore You by Cal Newport, it really hit home to me that it’s not passion that leads to career success (or any other sort of success for that matter), but instead competence. People who enjoy their careers are almost always really, really good at them. Namely, you may want to do something, but real passion comes from becoming good at something.
It reminded me of learning to play the guitar, which I discussed in a previous article:
“When I first began learning to play the guitar, the whole exercise was little more than a chore. Switching from one chord to the next was a tedious task that took so much time, I couldn’t play anything that could possibly be confused with an actual song. It took a good long while for the guitar become something that I actually enjoyed to play.
“Eventually, though, that all changed. I had finally mastered enough chords that I could play a variety of simple songs. Then I could play those songs easily. Then I could play them slightly more easily.”
I may have really wanted to play the guitar going in, but actually learning it, well, sucked. It was boring and disheartening and cumbersome and then… and then it wasn’t. Then it was actually enjoyable.
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Becoming Great, Finding Passion
Cal Newport makes the point that we have all become deluded by the “passion hypothesis.” Or as he defines it,
“The key to occupational happiness is to first figure out what you’re passionate about and then find a job that matches that passion” (pg. 4).
This, however, puts the cart before the horse.
Over and over again, Newport describes stories of people who tried to “follow their passion” and ended up leaving good positions for fantasies or meandering aimlessly through the job market. Yet just about everyone says that this is the way to go. Even Steve Jobs made that case at a commencement address for Stanford graduates. Yet as Newport describes, Jobs showed virtually no interest in the career he would become passionate about early in his life. He bounced around rather aimlessly before jumping at a happenstance opportunity that jump started Apple.
But then he became “so good they can’t ignore you,” and the rest is history.
In other words, while Steve Jobs may have recommended following your passion to find a great career, the path he took was to become great at his career in order to become passionate about it.
And to become great requires more than just a lot of experience. It requires “deliberate practice.” Newport explains this by discussing a study involving chess players and whether more hours spent in serious study or more hours spent in tournament play was the biggest determinant of success:
“…They studied players who had all spent roughly the same amount of time—around 10,000 hours—playing chess. Some of these players had become grand masters while others remained at an intermediate level… [It turned out that] Hours spent in serious study of the game was not just the most important factor in predicting chess skill, it dominated the other factors. The researchers discovered that the players who became grand masters spent five times more hours dedicated to serious study then those who plateaued at an intermediate level” (pg. 81-82).
The researchers concluded that, “In serious study… materials can be deliberately chosen or adapted such that the problems to be solved are at a level that is appropriately challenging.” Which is in contrast to tournament play, when a player may be much better or worse than you, and therefore “skill improvement is likely to be minimized” (pg. 82).
In addition, feedback is immediate in serious study, and all sorts of particular cases can be looked at in depth instead of repeating a lot of standard things over and over again like in tournament play. After all, how much better do you get by repeatedly moving your pawn to E4 to start a game?
How Does This Relate to Real Estate Investing?
First of all, don’t worry if you’ve become discouraged early on. I think a lot of new investors mistake a temporary sense of motivation for a sustainable passion. Real estate investment is very lucrative, but it’s also hard work. The key is to work to become great at it, and then a sustainable passion (and money) will follow.
The second point is to not fall into the trap of just doing what needs to be done or jumping from one fire to the next. Try to block out time for “deliberate practice” whenever possible. That could mean reading books, attending seminars, and learning from other successful investors. But it can also be things like reviewing your rehab budgets versus actual expenses to hone your budgeting skills. Or doing the same with your sales price versus projected sales price. It could be role-playing negotiations and filming them so you can review them afterward to work on your technique. It could mean asking for feedback on a business plan or loan request to hone your writing skills. In a business as varied as real estate, there’s a thousand ways to do it. They don’t come naturally. So you have to force yourself to do them.
But in the end you will get better. And then you will become more passionate (and more wealthy to boot).
How has your passion for real estate grown (or shrunk) as you’ve honed your investing skills?
Weigh in with a comment!