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Psychology of Building Wealth Through Real Estate


Many people have tried and failed to build wealth through real estate.   The first question we should ask (even if it was us) is why?   What did we do wrong?   The truth be told:   those of us who have failed (including me at times), have not followed the equations; we've invested without thinking, without having a plan, without seeing the overall picture, without doing our homeowrk, etc.   Sometimes we were short-sighted with our vision and saw only what we wanted to see, but not what really was....
How can we change our thinking?   Here are a few tips:
  • Instead of saying "We can't afford it.", think:   "How can we afford it?"
  • Instead of thinking "We're poor", think:  "How can we be rich?"
  • Instead of thinking "It doesn't work!", think" "What can I do different to make it work?"
  • Instead of thinking "I don't have money this month again - to pay the bills.", think:   "How can I generate more cash monthly?"
  • Instead of being negative, forget about yesterday and think about today and tomorrow.
  • Read more and talk less, unless it is to ask someone who knows more than you do (because they've done it, not because they say it). 
  • Agree that you need to know more and find out what you're missing.
  • Get a real estate investment mentor.
  • Set a goal and then work backwords.
  • Write it down and pin it up somewhere where you'll see it everyday - except change the colour or backing of the paper weekly so you don't get used to it and treat it like something you can just walk by and ignore.
  • Join the clubs and take a few courses.
  • Intermingle with people you aspire to be... the value of networking cannot be underestimated.
  • Buy someone (who knows more than you) some lunch or dinner...then listen to them while they share with you their secrets of wealth attainment.  Cardinal rule:   don't pretend you know more than they do, instead value their knowledge and learn from it.
But, what can we actually do?   Here are a few tips:
The first and foremost:   inform yourself and then buy cashflow properties first.   When you want to do more, buy equity and value added properties to increase wealth exponentially.
Think of the three income types:   earned income, portfolio income (for which we are taxed) and passive income (through real estate for which we can claim expenses).   Which one do you depend on?   If you're like most of us, it's the earned income.   But what does that mean?   In clear terms, it means that we must work to earn.   If we want to earn more, we must work more.   And really, is that all we want to do?   Although I'm personally at odds with this (I absolutely LOVE doing the job I do - and I don't think I'd be able to be happy and spiritually satisfied if I didn't do the job I do), most people seem to be in a different boat.   They're working because they have to - and not liking it.   How can we switch it to passive income through real estate?   Here's the simple answer:   cash flow properties only.  If we want to work a little and gain a lot, then we can extend this to equity purchases and land improvement (building, renovating, etc.)  But if we don't want to work too much, here's the answer:  plain, simple and boring cash flow properties are the ticket to achieving wealth.
Here's another interesting psychological nugget from Guide to Investing on unsuccessful people:
"Unsuccessful people find their strengths and spend their lives making their strengths stronger, often ignoring their weaknesses, until one day their weaknesses cannot be ignored anymore.   Successful pepole find their weaknesses and make them into their strengths."  (p. 274) 
Which group do you want to belong to?


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