Chapter 1: Mindsets:
getting your mind over the matter
Annie Stoker
The yeast that will make your investment rise is you.
Youāve made up your mind: you want to secure your financial independence and assure your future income, and youāve decided to do this by investing in property.
Then reality starts to niggle; soon it starts to bite. Investing in property is not like splashing out on a pair of shoes ā itās not even like buying a new car. For most, it involves borrowing hundreds of thousands of dollars; taking on considerable debt in the hope of getting some, or all of it, repaid by tenants. Of course, the long-term view is that the asset will appreciate and youāll make money on it. In the meantime, you have to service your debt; deal with vendors (sellers), real estate agents, mortgage brokers, banks and maintenance issues; pay the bills and still manage to sleep at night.
Are you afraid? Of course you are!
Fear can be crippling. It will keep you in a state of inactivity for as long as you let it. You need to feel the fear and do it anyway. Let your logic prevail and keep a lid on the emotional responses that will prevent you from reaching your goal.
In this chapter, weāll look at the mindset thatās required to make a successful property investor, and weāll explore the characteristics that need nurturing to get your mind over the matter.
A shining example
Consider Abraham Lincoln, the 16th president of the United States. I wonder if youāre familiar with these aspects of his biography:
In 1831, his business failed; he declared bankruptcy. He was defeated for a place in the Illinois General Assembly. In 1835, Lincolnās sweetheart died. This was followed by a nervous breakdown in 1835. In 1843, he was defeated for nomination for US Congress. Lincoln was defeated for US Senate in 1854. In 1856, he was defeated for nomination for US vice president. In 1860, Lincoln was elected president of the US. This exceptional man reached his goal despite enduring setback after setback. Lincoln embodied the idea that you cannot fail unless you quit!
But what is it about a person that makes them excep-tional? Exceptional people have an understanding of how the world works and the universal laws that govern humankind. They know that if they continue moving towards their goal, regardless of the obstacles they might face, they will not be denied greatness. In a nutshell, they have the right mindset for success.
Your mindset is the way your mind is conditioned to see and understand the world around you. It is an internal model of your environment, governed by your beliefs, thoughts and emotions. It is also influenced by your family and friends, and even your own subpersonalities. Letās deconstruct some of these elements to examine how they work.
The power of belief
A single belief ā such as debt is bad ā has the power to stop you in your tracks. If you are setting out to become a property investor, this can happen even before you are faced with the bevy of professionals you will encounter over the course of a property purchase. Even though a belief is simply the result of a few random neurons firing in the brain, its effect on your life can be profound.
Many of us may have been brought up believing that debt is bad. While this can be true, there is such a thing as good debt. (See chapters 5 and 13 for more information on gearing and finance.) Letās look at an example of a learned belief at work.
Janeās story
Jane was brought up by parents who believed debt to be burdensome and best avoided at all costs. Her parentsā lifeās work was dedicated to paying off their mortgage before retirement. Clear in Janeās memory are her parentsā conversations regarding the financial troubles of an impulsive friend, who got burned when she took out a car loan.
One day, Janeās husband comes home with a property magazine, full of excitement about the investment oppor-tunities it holds. A feeling of dread settles in Janeās stomach as the teachings of her parents spring to the fore of her mind. She becomes annoyed with her husband and they argue.
Janeās is an unconscious reaction of fear and anger that has rendered her incapable of seeing her husbandās ideas in a positive light. She is unlikely to change her mind and her attitude may prevent her from studying the benefits of good debt. Even if she did decide to investigate the possibilities good debt would bring her, h...
