Taking on the New Year …

A brand-new year brings with it both anticipation and apprehension.  Both are emotional responses to the unknown.

There are MANY things we could discuss in this year’s opening missive …

… tariffs, trade wars, a new Congress, the Fed, interest rates, the stock market, the bond market, gold, oil, taxes, Opportunity Zones, and on and on.

Most of those things are completely OUTSIDE of your control.

So as we stand together at the threshold of the New Year, rather than dive into the weeds of the daily news or pontificate on predictions of the future …

… we think it’s important to consider how to use things WITHIN our control effectively to make the MOST out of the next twelve months.

The goal is to OPTIMIZE your odds of success by focusing your best efforts on the few things you can control, and which create the most positive leverage in your endeavors.

Read that again and let it sink in.  It’s something we work on all the time.

Now let’s take a look at this idea from a real estate investing perspective …

Everything starts with your goals.  But not really … because before you can set a MEANINGFUL goal, it’s critical to choose your values, mission, and vision.

Values, mission, vision, goals, focus, and effort are all things YOU can control.

Sadly, most people don’t proactively and strategically identify their values, mission, and vision.

Instead, they bounce from thing to thing … role model to role model … idol to idol … hoping to stumble onto the secret to happiness.

That’s why we put so much emphasis on taking time to create your future.

Once you have your values, mission, and vision clear, NOW you can set meaningful goals … what are often referred to in business as “key objectives.”

These are activities YOU can control … things you CAN do … which are specific, measurable, and have a deadline for completion.

For example, “owning more real estate” is NOT a goal.  “Buying four properties by the end of the year” is better.

But “acquiring 100 doors by the end of the year” is even more powerful because it creates possibilities and leverage … while focusing your activity on the REAL heart of real estate investing.

Think about it …

If your goal is to “buy four properties”, you might end up with four single-family homes … which is only four tenants, or “doors”.

And saying “buy” puts a subconscious limitation on HOW you acquire the properties.

But focusing on “acquiring 100 doors” is VERY different because you might achieve it through only ONE property, which provides time leverage.

This goal also focuses you on what REALLY matters … acquiring TENANTS.

Remember, it’s not real estate that makes you rich … it’s the rent.  Even equity is a derivative of income.

And when you think in terms of “acquiring” instead of simply “buying”, it opens your mind to seeing alternative acquisition possibilities … like options or syndication.

After all, you can acquire a property without paying for it. 

For example, if you syndicate 1,000 doors for a 10% share, you effectively gain 100 doors personally.

But instead of paying to own them, you get PAID to own them.  BIG difference.

So it’s actually easier and faster to think bigger.  Yet most people believe just the opposite.

Of course, thinking and feeling are interconnected.  That is, how you think affects how you feel … and how you feel affects how you think.

Blair Singer says, “When emotions run high, intelligence runs low.”

So if you’re afraid of an uncertain future or of making a mistake, you’ll tend to think about avoiding risk.

But investing is about navigating risks … not avoiding them.

Similarly, if you’re hyper-enthusiastic, you may only think about the upside and fail to think about the risks  … or strategies for navigating them.

We think passion and logic go together.  The most successful investors we’ve seen know how to balance both effectively.

It comes down to knowing the difference between what you can and should control, and what you can’t.

The future is always in motion and largely out of our control, so we can NEVER be certain.  Striving for certainty in an uncertain world is a recipe for paralysis.

On other words, it’s ineffective to worry about things we can’t control.

Better to stoically observe uncontrollable events, and then focus our passionate attention on things we CAN control in a way which maximizes possibilities and leverage.

We KNOW there will be LOTS of things happening in the new year.  We just don’t know what they are.  However, we can sure they’ll present both challenges and opportunities.

But it’s not the uncontrollable events themselves which most effect our results … it’s how we choose to react to them.

History tells us there will be ups and downs, and there will be winners and losers.  In the same set of circumstances, some will prosper and others will fail.

The individual challenge is figuring out how to define what winning looks like on a personal basis, and then doing what’s in our control to win on our terms … in whatever environment we face.

It takes clarity, knowledge, connections, emotional control, and the discipline to focus on those few strategic things under your control that provide the most leverage.

It’s simple, but not easy.   If it were, more people would do it.

Our experience and observation is that the best place to start is by putting great ideas in your mind, getting around the right people as much as possible … and narrowing your focus to the very few things that make the most impact.

So as you enter the new year … be sure the time and resources you invest in developing the real estate between your ears is commensurate with the size of your investing goals.

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2/28/10: In Pursuit of Excellence – What Real Estate Investors Can Learn From Olympic Athletes

Athletics are such a visceral metaphor for every form of human endeavor –  including investing.  During an athletic competition, years of dedication to a single pursuit are tested in a matter of moments.  Every decision, sacrifice and whim of fate are focused into one measurement of success: the scoreboard.  And so it is with an investor’s financial statement.

To celebrate this year’s Winter Olympics, we strapped on our skis for a cross country trip to Vancouver (via our TV remote) to consider the excellence that is Olympic athletic competition – and to glean practical lessons which can be applied to an investor’s daily life.

In The Real Estate Guys™ bobsled for today’s broadcast:

  • Your Pilot and Host, Robert Helms
  • Brakeman and frostbite strategist, Russell Gray
  • Sled owner and Godfather of Real Estate, Bob “that’s my sled” Helms

With a strong push from our engineer, we jumped into our seats behind the microphones and began our rapid descent into a lively discussion.  With so much to cover in so little time, the show took a lot of twists and turns.

Right out of the gate, we talked through the many parallels between the mindset of an athlete and that of an investor.  As each attempts greater achievement, each must deal with issues of distraction, fear, criticism, injuries, competition and all types of adversity.  How do gold medal athletes handle all this – and how does a real estate investor apply those same coping strategies to their efforts?

We also observed that desire, training and commitment aren’t enough.  To get to the highest levels, there are several other critical items top performers must have in place, including proper technique and strategy.  Pros make it looks easy, but they don’t win by hard work alone.   Bob shares a great real estate example of how quantity of effort is largely wasted if good technique isn’t employed.

We also noted that even those athletes competing in an individual sport still have a large number of people on their team – people who affect their physical, emotional, intellectual  and spiritual vitality and effectiveness.  The people and personalities an athlete surrounds himself with can be the difference between a trip to Disneyland with your face on a box of Wheaties – and just fading off to obscurity as an also ran.  The same is true with investing.  So who should an investor have on his team and how does he know they’re the right ones?

As the show progressed we picked up speed and delved into the role of external conditions.  An athlete can’t control the weather any more than an investor can control the economy.  When it’s our turn, we have to compete, no matter what the conditions.

We cross the finish line talking about the power of passion – and how it drives an athlete to push and sacrifice not just for glory and victory, but for the thrill of the sport.  The most successful real estate investors love the game. When you combine your passion with great technique, strategy, training and the right team – you may still not win – but you have a legitimate chance.  And the difference between a true competitor and a delusional dreamer is that a true competitor isn’t looking for a handout or an easy path, they are simply looking for a chance to compete and win.  As John F. Kennedy said when challenging the US to put a man on the moon, “We choose to do this not because it is easy, but because it is hard.”  Overcoming the internal and external obstacles is what makes victory sweet.

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