“Until you can manage your mind, do not expect to manage money.”
Mindset Matters Most
This is the most important concept. Warren is correct, that without the right mindset it would be difficult to become a successful investor. Whether you listen to financial traders, trainers, or successful entrepreneurs, they all say the same thing: Your mindset contributes 60 to 90 % to your success (only the actual number varies, depending on whom you ask). The rest is mechanics and knowledge.
The human mind is the most powerful ‘super-computer’ on Earth. If you ‘program’ it correctly it will help you tremendously, but conversely will also hinder you if you have the wrong mindset. So please read carefully and adopt your mindset where necessary. You have just significantly increased your chance of success. Congratulations!
How Do Investors Think Differently?
If you bought a handful of shares of your favorite company years ago and are still holding on to them, you are technically an investor, as you have invested into that company. When I am talking about investors, I mean people who let money work for them with the intention and purpose of increasing their net worth.
Do you think that great investors such as Warren Buffet or Donald Trump think differently than most other people? You bet they do! Even if not everything goes right, and they might be in debt with a billion dollars at a particular point in time, they know how to get out of such a situation, act accordingly, and are rich again soon after, as we have seen in Donald’s case.
You probably also have heard the saying: The rich are getting richer and the poor are getting poorer. Why is that so? Because the way they think is different!
A study once concluded that if all the wealth in this world was taken away from everybody and then distributed equally to all people in the world, it would probably take less than 10 years until exactly the same people who had no or little money before would be poor again and exactly the same people who were rich before would have all their wealth back.
Of course this cannot be proven, but doesn’t it give a lot of food for thought? If 1% of the people own maybe 40-50% of the wealth, should we say that this is ‘unfair’, envy them, or even try to take it away from them? Or rather, should we learn from them, understand how they think and act differently, and just model what they do for our own benefit? I highly recommend the latter! To share some insights into how investors think is the focus of this chapter and I hope to inspire you to adopt this mindset too so you can be successful as a property investor.
Your Relationship With Money
What is your relationship with money? Some people think that money is evil, some despise the lifestyle of the rich and others focus on not spending money, rather than making more. So here is my first tip: You need to LOVE making money! Not at all costs of course, but at least you should not have any problems with the concept.
So please examine your own relationship with money and adjust where necessary. The points in this chapter will give you some clues. The way we think and feel is largely driven sub-consciously and it might not be so easy to change it, but it is entirely possible.
The Property Apprentice Master, Jochen Siepmann, wants to share the wealth of his knowledge easily and effortlessly with you for FREE. Start your journey now to greater wealth through passive real estate income and capital appreciation with one, or all, of these FREE offers: