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221: Think like the Rich - Action like the Rich - Be Rich


09-07-2008

PropertyInvesting.net team

 

Want to make serious money – read this

 

To be an ultra-wealthy investor, you need to follow certain traits that will differentiate you from the average person. This is based on our experiences in property investing and wealth creation. Property investors on the whole are not your average person – anyone who has attended a property show or auction will attest to this. In general, property investors tend to have the following traits:

 

If you have any of the following traits below, you will likely be a less effective property investor and either find it more difficult to make money or not find the time or energy or have the inclination to do so:

 

One of the single biggest factors holding back most people from become rich, even if they want to become rich, is their family or spouse. Sorry to have to say this, but we're try to help and be frank and objective. This does not mean to say you will need to change partner or friends, or drop your family – such actions can be even more damaging financially and ruin your life since family and friends are so important for one's well-being. A few tips on how you can manage the relationship with your family and friends:

 

·          Family and Friends: Do not talk about your epic property investing exploits with family and friends – they may subconsciously want to bring you down to earth or be genuinely upset or worried you may change if you become wealthy (or course you have no intention of doing so, but perception is more important than fact).

·          Spouse-Partner Communication: You need to try and make your spouse understand your goals, how achieving wealth will help both of you, and how the world will not fall apart if you have any challenges during your property investing exploits. Try and not hide things – women are very perceptive about hidden secrets and your nervousness will be spotted. And men can get envious of women who do well in property investing – do not brag about it too much if you are a successful women investor. And remember, if you end up splitting, then the wealth will be spilt including the properties – it could be a financial disaster. Safeguard your marriage or partnership as a top priority – it’s economically very important! As well as being good for the kids and your lifestyle of course.

·          Parents: If you are from a modest background and want to be super-wealthy, if you live close to your parents, do not expect to be super-rich. The peer pressure you will receive in subtle ways will lead to you holding back from taking huge risk. After you’ve made a packet, you can move back to you close to your parents. But you need to unshackle yourself from any views that might get in the way of making serious money, unless your parents are business people and understand (95% of parents are employees or publics sector workers, so don’t expect your parents to understand private entrepreneurial business, goals, finance and the fun of making serious money!). Unshackle yourself from old norms and old expectations.

·          Negative Poor People:  If you surround yourself with negative people that have no money, expect to end up the same. Nothing wrong with poor people of course – they work hard, many have come from disadvantaged circumstances and live day-to-day – many admirable hard working families. But if you get distracted or influenced by other people’s negative, risk averse or worried behaviours – you will never be truly wealthy. How can you expect a poor person to understand property investing fundamentals, plans, goals, values and business models – they probably have zero interest, and may feel envious or even jealous of your exploits. They will think it’s okay for you because you have money. They will not understand they you do not need money to make money. Any of your convincing them otherwise will probably land you in trouble – so keep your mouth shut and try and find like minded individuals that you can learn from, share good practice and get enthusiastic with.   

·          Culture: In some cultures, it seems to be frowned upon to talk about making serious money. The poor will complain about the wealthy as if they have been ripped-off by them – jealousy and envy come to the fore. The UK is one of those countries where it’s difficult to openly discuss business with many people. The reason is probably because 95% of the population are employees (working for other people) of which half work for the government (public sector). Both private and public sector employees are “not” businessmen or women – because they do not own their own businesses. They work in a protected environment for investors who own the business. However, if you are a public sector worker who owns fve buy-to-let properties, you are a business person. But do not expect your public sector colleagues to understand what drives you, financial spreadsheets, business plans, investments, value creation and the like. Best keep your mouth shut or you’ll end up confusing the heck out of them! Better to find a club, forum or like minded friends to share your practices with.  In the USA, the culture is far more receptive to business – there are more small businesses, more private sector employees and less publics sector employees – many people migrated into the USA and started with nothing then became wealthy through private business (George Soros is a good example). 

 

An interesting exercise is to list all your friends and family, note down who is a private business person, then make efforts to discuss business with them only – don’t distract your other family and friends with your exploits – you’ll confuse them at best, and upset or destroy your friendships with them at worst.

 

One thing that does not matter is whether you are extrovert or introvert. Extroverts tend to make quick decisions, are less worried about taking the plunge and like meeting people and talking lots! They like listening to themselves and do not listen or absorb other people's views well – this can be dangerous but if they have introvert advisors to keep them on the straight and narrow (e.g. an introvert solicitor and accountant) they can make very quick progress to huge wealth. Extroverts are also more likely to take accessive risk and go bankrupt! Introverts tend to evaluate all risks and are more cautious with decisions - decisions are rational, objective and well thought through. They can lose opportunities because of this, but are more likely to steadily create wealth (without going bankrupt!) rather than experiencing a roller coaster ride to wealth creation. Introverts like space, time to think, and do not use emotion for decision making. Both extroverts and introverts - as long as they are both motivated, can become super wealthy. They like listening and find "in your face" extroverts annoying and irritating.    

 

Think Like the Rich – Action Like the Rich

If you want to be rich your need to firstly “think like the rich” then “action like the rich”. This begins with:

 

·          honouring commitments

·          performing business with honesty and integrity

·          improving your reputation

·          seeking to learn and understanding whilst being able to make your own decisions

·          setting goals and striving to achieve these goals

·          being action focused

·          being generous when you have made money

·          valuing time more than money

·          being efficient in the use of time

·          leveraging other people to make you money (contractors, employees, consultants, helpers)

·          leveraging money to make great net worth (loaning and investing)

·          concentrating on build up of net worth (rather than earned income)

·          being prudent with expenses

·          treating your wife, children and family as number one priority and respecting them

·          being disciplined and honest with your accounting and management of business affairs

·          discarding your “baggage” – old norms (e.g. "your family has always wanted you to settle down and get a nice steady job")

·          taking managed risk whilst managing mental worries and concerns

·          identifying gaps in the market where value can be easily created

·          making other people feel important

·          thoughtful about health, eating and exercise

·          careful with personal safety and security

·          learning from mistakes whilst taking responsibility for your own misjudgments

·          never a victim – always an opportunity

·          glass is half full not half empty

·          proactive positive “can do” mindset

 

If you can follow these traits of the rich, you will almost certainly become rich – even ultra-rich. It requires dedication, effort, focus and constant thought. Your goal to become rich should drive your behaviours from a day-to-day standpoint.   

 

If you have too many negative thoughts – you need to consign these to the dustbin. You only live once, time is running out, and its no use putting off that first important action – before you know it, you’ll be so old and you wont have the energy, health or time to get rich anymore. It takes time and patience. The earlier you start the better.

 

We hope this has given you some helpful insights into the psychology of the rich - and a steer on how to use a rich person's winning mentality to achieve your investment goals and wealth targets. If you have any comments, please contact us on enquiries@propertyinvesting.net   

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