When setting out to achieve any form of success you need to develop the right mindset. The same can be applied to property investment as you embark on your journey to success. To successfully invest in property, you need to understand why you are investing and what sparks your desire to invest. Clarifying you’re “why” enables you to create measurable and time-specific goals which set your plan into motion. Although your journey will have ups and downs you will need to develop your resilience. Each of these considerations influences one’s mindset and can impact an investor’s success.
What Is Your Why?
The first step before even considering purchasing an investment property is to establish your why? Why are you investing and what is your ambition? At this stage consider why you want to invest and what it could do for you in your life? Do you want to leave the workforce and spend more time with your family? Do you want to travel the world and achieve financial independence? Identifying you’re “why” should be the starting point in your journey. This will fuel the fire and outline the purpose of your investing journey. Once you understand why everything else begins to fall into place. You have identified what drives you and this should be your source of motivation.
The next step is to create measurable goals which align with your why. Setting goals will highlight what you are trying to achieve and allow you to create a plan. Your goal can be to focus on capital growth, cash flow, or a blend of both. Though the goal needs to be specific and not general. You need to know exactly what you want to achieve in order to create a plan. Your goal can change over time but you need a goal, to begin with. Use your “why” to help dictate your goal. This will enable you to align your why with your goal.
When setting out to achieve anything, having a step-by-step plan is crucial to successfully work towards that goal. Without a clear plan, you have no direction on how to achieve your goal. This then applies to your investing as each investment doesn’t serve a specific purpose. Every thoroughly thought-out goal has a plan or a blueprint. To do this, an investor can take their goal and reverse engineer it to create a road map moving forward. This will enable you to successfully chip away at your goal and work towards achieving it.
If your goal is to replace your income over time, then you can reverse engineer this. You may earn $100k a year, so you will need to have assets that generate a cash flow to match that $100k per annum. Assuming the total assets owned generate a 5% yield (amount earned on an asset) you would need $2 million in paid-off assets. This would generate a $100k passive income each year (2million x 0.05 = 100k) and replace your income. So now the goal is to build a pool of assets worth at least $2 million. Saving your way to financial independence may take the entirety of your working career. Instead, by taking action and investing you could aim to do this in a much shorter time frame.
Assuming real estate is the chosen investment tool, you could begin building a property portfolio. Purchasing high-demand properties will enable you to see short-term capital growth. This would build your net worth quicker than simply saving your income. Once you have identified the why, set time-specific goals and reverse engineer a plan to achieve the established goals. This should provide you with greater clarity on why you may be purchasing a property and the property’s purpose within your overarching plan.
An aspect needed to develop the right mindset is to develop resilience. There are going to be times along your journey where you feel like you want to give up. It may be taking too long to sort out finance, you may have missed out on a deal, or life may just step in the way and knock you down. It is important to develop a never-give-up attitude in order to overcome any setbacks and keep striving towards your goals. Building long-lasting wealth is not a sprint, it is a marathon. In fact, any worthwhile goal in life requires consistency and perseverance. If you truly want to be successful within your investment journey, be ready for the long hull as your success won’t happen overnight. Though it will happen if you choose to keep working towards your goals despite what external factors take place around you.
Successful investing begins with a shift in mindset. Prior to embarking on your investment journey develop the right mindset in order for you to achieve success. Consider why you are investing which will hopefully create a burning desire within you. Set specific and measurable goals and remain laser-focused on achieving what you set out to do. Create resilience that enables you to persevere through the tough times along your journey and fight for success. Asking yourself these questions and creating the right mindset will set you up for future success within an endeavour you pursue.