207: Fear – consign it to the waste bin of history
Fear is the single most important impediment to making serious money. We are fear failure. It’s a human instinct. 2000 years ago, people lived in constant fear from neighbours and local tribes. Constantly on edge, trying to eek out a living – hand to mouth. It’s a natural feeling that has influence on our behaviours that is bourn out of human development.
But in our modern civilization, it is the single most important feeling to overcoming if you want to be rich. Most people fear failure and because of this will never be rich. They will naturally avoid risk, hide behind other people and avoid failure. They fear failure.
Think Small: Social conditioning from our family upbringing normally centres around:
- Get a good steady job
- Avoid making a fool of yourself and embarrassing yourself and the family
- Don’t shine out and embarrass the family – don’t try and be better than anyone or everyone in the family
- Don’t try and shine out – otherwise your friends might turn against you are view you as odd-ball
- Get yourself a wife, have kids, get a mortgage, nice car, keep up with the Jones’s and keep out of harms way
If you want to be rich, you need to put all this baggage in the bin! You need to discard everyone else’s prejudice views on what “they think you should do”. You need to decide what “you want to do”. Seek other people’s views and opinions – fine – but don’t let all those doubting Thomas’s put you off what you want to achieve. Don’t let them create fear in your thoughts that might otherwise not be there. If you take the advice of your family and friends you will never be rich. They will always put you off. You will end up taking no action – taking the safe route.
Think Big: Instead, you should be thinking along the lines of:
- I only have a steady job to fund my property investments – then I plan to “go it alone” when I am wealthy enough – to focus all my time on making serious money
- I feel confident about shining out from the crowd – I’ll be humble and quietly go about making serious money – hopefully no-one will notice or notice the change in me
- I might even get respected within my family – as long as I remain humble and avoid talking about money all the time
- I’ll make sure my old friends that knew me when I had no money remain my friends – all the other friend I made after I become wealthy I’ll be more cautious about. If I’m humble and down to earth, I know my true friends are likely to respect me for my achievement – but they’ll not tell me this – and it wont be very important to me anyway
- I feel confident enough with myself to not feel like I am an odd-ball in wanting to be seriously rich – in any case, I don’t need to go around telling everyone or advertising the fact
- I’ll always be confident and act the winner to my partner (partners back winners) – and not make a big issue over wanting to be seriously rich – I’ll try and stay off the subject of money because it will bore them – and try and give my love and attention as much as time permits – I’ll make time for this
- I don’t care about keeping up with the Jones’s – they are irrelevant – I’m thinking big and will have 100 times more wealth than the Jones’s one day, so there’s no point comparing myself to them. I’ll be in a different league one day – but I don’t need to go around being unpopular by advertising the fact to anyone!
- I want to go it alone – being an independent type I am – I will stay focused, not be put off course whilst showing respect and honesty to all people. I’ll try and make everyone feel important. But I’ll stay focused on making serious money and will take full responsibility for the businesses I get involved in.
- I will seek out opportunities to improve my business - I will grow wealth and not be put off my the detractors.
- I will not get arrogant - I will never think I am really smart - I just like playing the game of making serious money - I'll never think I've succeeded, because like all football teams - as soon as you think you're a winner, you'll start loosing!
Do you want to be rich? But first of all, you need to decide whether you want to be rich. Most people don’t. They want to be well off enough to survive. But they do not want to shine out from the crowd. They don’t want the baggage that comes with being rich. All those people chasing your money. All those people wanting a slice of the pie. If you are married or have a partner, you’ll likely find your partner does not want the effort, risk taking, hours of work and prioritization of your business activities over the family – so do not expect them to like it if you want to get fabulously wealthy. They’ll want some wealth – to be comfortable only – but they’re not likely to want to be fabulously wealthy with all the sacrifices this entails. If you truly believe you want to be fabulously wealthy – you need to discard all the baggage and go it alone. It will be lonely. It might even cause you to loose your partner. You mother and father probably wont understand. You’ll upset your kids on the way if you have any – they’ll be totally confused about why you want to lock yourself away for hours on end making money. You can explain the rational – but they wont understand. They want your love and attention. They want to roof over their heads and security and love. They don’t want their mother or father to be absent – and will view the prioritization of you making money over they attention and affection as being negative. You need to live with this. Not regret it. You’ll have to make time for them somehow – and not regret in future years the missed opportunities – as you drive forwards with focus to make serious money. Frankly – 95% of the population are, probably quite rightly, not willing to make the sacrifices. They chances of become supremely rich versus the risk of loosing out on family life probably don’t stack up! But if you truly believe you can succeed in business and investment – whilst managing these pressures and the constant negative and often small talk from people around you that do not understand running what running a business entails – then you’ll know in your heart to give it a go.
The fear factor: Fear affects everyone. We know of no people that have not been gripped by fear and panic at some time in their lives. Financial pressures are a common area of fear. Fear of loosing money. Fear of failing in a business venture. Fear of looking stupid. Everyone talking behind your back - gossiping that you have failed in a business venture. Concern about your personal reputation.
Consign it to the bin: What you need to do is – put the fear in the bin. Whenever you have doubts and it creeps back, take it out of your head, focus and put it back in the bin. Look at it in the bin. Then smile and laugh at it in the bin. Free up your mind, think positively and move on. No – you are not the only one that gets worried about "this and that" – money, the economy, bills, tenants, damage to property, floods etc – it’s all part of the business. You need to live with it, and get on with it, or get out of it!
If you have an issue that worries you – “map it out”. Write it down, what is the issue, what is the underlying cause, what actions should you put in place to rectify the issue. List them. Then start actioning them. Do it – before it’s too late. Time might not be on your side. Don’t procrastinate or prevaricate. Start doing. Actioning. Stop worrying, reworking the issues and thinking to hard about them. Stop feeling sorry for yourself, blaming other people, acting the victim. Grow up. Take personal responsibility then start actioning.
Action Plan to Mitigate Fear: It is amazing how improvement can be made in a business by creating a simple action plan. If you are losing money (or want to save money), simply make a list of where your losses are occurring (or savings can be made). Then add up the total monthly savings – you’ll probably be astonished at how much money cab be saved! Then action the biggest losses first. Leave the smaller stuff until last. This is a prioritized list. Some ideas:
- Switch energy provider (gas, electric)
- Let out all rooms or properties that are void – list them – action now
- Change the mortgages with highest rates to lower rates
- Keep a track on mortgages where discounted rates have expired – remortgage
- Redecorate rooms or flats that have high void periods
- Sell property with the worst cashflow
- Purchase more of the properties that have the best cashflow
- Sell properties that are difficult to rent out or have consistent problems
- Find a low cost handyman that you trust to do building repair jobs
- Manager property yourself if you believe you are better than a letting agent and save the 15% commission
- Evaluation your property portfolio for properties that you believe you could up the rent
- Reduce the rent on properties that have been void for a long period
Why Fear Losing Money? If you think about the important things in life, it will likely be health, family, friends and enjoying life – and enjoying work. Most people fear losing money, so they never try and make serious money because they think they’re risking things financially. But how foolish is it to have such fear over losing money – it’s not rational. If you lose your money, will you lose your family, friends and health. In almost all circumstances you wont. Again, people fear losing money and becoming bankrupt because of loss of face, embarrassment or what other people “might” think. But if people don’t want to know you after you’ve lost some money, you probably don’t want to know them in the first place! And most successful business people who own businesses have failed at some point in time – many of their businesses go broke, but others survive and flourish. If you start young, you can become bankrupt early then become seriously wealthy in future years. If you fail at a business, there is huge learnings in this, and you can adapt, change, improve then prosper from it. Some Business Angels will only loan people money if they have failed at a business before – and have this type of experience at hand. So it’s best to not fear failure. Respect the threat of failure and try and avoid it. But do not fear it. If you do fail, make sure you learn from it, do not repeat it then move swiftly on.
Risk: Finally, if you believe it’s lower risk to get a steady job and never risk any capital yourself, you’re probably misguided. As the babyboomers age, medical bills rise, energy bills rise, living standards in Europe and USA start declining and costs go up – if you have a steady job and expect your state pension or any other pension linked to the stock market to be worth something one day, then you’ll probably be disappointed. This is one reason why so many people go involved in “Buy to Let” after the stock market crash starting 2000 then slumping late 2001 to end 2002. Most stock markets halved in value. This will happen again one day as aging babyboomers start to retire in the
What Helps: You will never be rich unless you have a passion for what you do. It doesn't matter what it is, it can be scrap metal, birthday cakes, toilet paper. Millionaires are from all buisinesses. But the common theme that come through is they:
have mandatory compulsion to want to be rich (it's not just a desire)
are generally independent types that like to control
are normally good with people
are extremely knowledgable, passionate and enthusiastic about their business(es)
work hard and are motivated
are good at what they do - play to their strengths and get other people to fill in for their weaknesses
can handle fear better than most people - take on risk and feel empowered by this
If you have none of these trait, you'll probbaly be happier and more successful being an employee within the private or public sector rather than a business owner or investor.
Consign Fear to the Waste Bin of History: We would advocate that investing your own money in your own investments is actually a low risk approach. Even if you lose money initially, you’ll learn and adapt and eventually succeed. You have nothing to fear. Fear is the biggest enemy of the poor, middle class and rich. It’s just that the rich manage to consign it to the waste bin of history – and laugh at it. Then laugh all the way to the bank!