Reasons Why Intelligent Investors Sometimes Finish Last
In the race of life a real estate no one wants to finish last. After all you don’t go into an endeavor and expect to fail. If you did that, you may have to question your intelligence. And questioning our intelligence isn’t something we often like to do. In fact, we normally like to see ourselves as pretty smart people. Because it seems to reason that you have to have some form of intelligence to be successful at real estate. Unfortunately, even if you are the most intelligent person in the world, and had all the knowledge of real estate, it isn’t always enough to build wealth or make money in real estate. In fact, often times it can actually get in your way.
In this article we will outline the 5 biggest reasons why intelligent investors can often finish last.
Reason #1: Emotions Can Lead to Our Folly
It was Sir Isaac Newton who said, “I can calculate the movement of the stars but not the madness of men.” He allegedly said this after losing his entire fortune in a business endeavor gone bad. Even though he was one of the most intelligence men during his time, and even today, his greed got in the way and led him to unintelligent investing. Being unable to tame your own emotional monsters of fear, greed, envy, anger, etc. You can never be a successful investor. If you can’t keep your emotions in check, even the most brilliant of minds and strategies will not save you.
Reason #2: We Get Stuck in the Theoretical
While being an analytical person can be a good thing, you have to be careful. Otherwise you might find yourself stuck analyzing and serving able to close the deal. Sometimes, you have to put down the spreadsheets in calculations and take a risk. After all, you’ll never make money on a deal you never do. Of course, you need to use intelligent analysis, like making sure your net rent covers your mortgage payment. But there is no such thing as the perfect deal, so don’t let your brain get in the way of a great one.
Reason #3: Pride Comes Before a Fall
This concept is best highlighted in the book of Proverbs. When Solomon wrote to his son warning him about how “pride goeth before destruction, and a haughty spirit before a fall.” While you need to have a lot of confidence in the real estate game, you have to make sure you don’t cross that fine line into arrogance. Even if you are the most intelligent person in the world but are arrogant, it can ironically lead to a stupid decision. Arrogance is the real link to us relaxing our attention, and causing us to underestimate challenges. Therefore humility is crucial when it comes to real estate investment. This is because change is the only constant in life and investing. And being able to be humble and flexible will allow us to change with the times. On the other hand arrogance and pride will make us frigid and likely to fail.
Reason #4: We Lack A Valuable Skill
While it’s not something you commonly think about, one of the most important skills to have in real estate is communication. And unfortunately, most real estate investors don’t take time to practice and strengthen this skill. The best example of a brilliant and successful investor who took the time to understand communication was Warren Buffett. In fact, Buffett now credits a public speaking course as the most important degree he ever earned, and he graduated from an Ivy League school. He believes that communication was the real link to his success. Because, it doesn’t matter how smart you are, if you can’t communicate your ideas you will continuously face in uphill battle in business and real estate investing. So, go out and hone your skills. Read books and take courses on how to better communicate and speak in public settings.
Reason #5: Unwilling to Practice Daily Habits
Just like with anything else, real estate investment really comes down to self-discipline and consistent action. A lot of times people know what they need to do, they just don’t do it. A great example of this is a diet or exercise program. People know what they need to do, they just lack the motivation to go out and do it. Real estate investment is all about doing. And your habits and daily behaviors will ultimately lead to your final results. And if your daily habits are bad, your results will be bad. Therefore, make it a priority to focus on consistency over intensity, schedule your important priorities first, and remember that mistakes are okay.
So in order to avoid the pitfalls of those that have come before you, keep this list of reason in your mind as to why even the most intelligent investors finish last. If you can learn how to keep your emotions in check, avoid getting stuck in the theoretical, steer clear from an arrogant mindset, gain communication skills, and strengthen your daily habits, you can set yourself up for success in the real estate industry.