At 25 you understand why poor decisions made when you were 15 were wrong; but imagine how your parents felt trying to tell you that at 15.
At 40 you look back on decisions you made when you were 30 and, with the wisdom of hindsight, can explain how you would do things differently if you could.
As people grow older and wiser there’s a sense of having arrived at a place where you are competent to make wise choices.
Ten years later we realise that we are only at that place now and the choices we made earlier were not so great.
I’m going to share a personal story regarding my biggest property investment mistake. Attached to it was a huge opportunity cost and in sharing this with you I hope you will not do what I did.
I was untrained in finance, unqualified and without a clue. That was me, yet for the decade of my 30’s I continued to listen to me, and make poor decisions as a consequence.
When I was younger, without the expenses that come with starting a family, investing wasn’t on my radar.
Why would it be, retirement was for old people? When you are young there is a sense that you will never grow old; not for a lifetime anyway.
Not considering investing in property when I had the capacity to do so was a big mistake; but it wasn’t my biggest one.
At 30; now married to Katrina, with two children and living in the home we had built, I began to recognise the importance of investing to secure my financial future, but told myself that I couldn’t afford it.
I reasoned one mortgage was difficult enough, there was no way a bank would give me another one. I did not believe I had the borrowing capacity, nor was it affordable.
At age 37 I began working in the investment property industry contracting to another company.
I was researching to identify the best locations to invest in, as well as unearthing great property investment opportunities for their clients. I even sourced three development sites and was involved with those projects from inception to completion.
After doing this for a few years, and now with four kids at a private school, I continued to assume we did not qualify to buy an investment property.
I even spoke at numerous events where I shared the findings of my location and property research, and taught on the research fundamentals that influenced my conclusions.
At each of the 30+ events I attended the main speaker would tell the audience that their first step was to have their borrowing capacity assessed.
Clients would complete a simple form that gave a snapshot of their financial position, then a qualified professional would assess their position.
One day the penny dropped and, realising I had nothing to lose, had Katrina’s and my borrowing capacity assessed.
Subconsciously a part of me had not done this previously because I had told myself I would be rejected, and rejection is something most of us avoid.
To my surprise we had capacity to purchase two investment properties, which we quickly did.
I was 40 when we became property investors having let pass the previous ten years; which had been very rewarding for those who owned real estate.
Had I taken action ten years sooner, the equity we would have amassed would have allowed us to invest into more properties.
And it goes without saying that we would have more equity today in all of those properties.
More properties with more equity = more wealth and more choices!
We learn from mistakes; it just costs less when they’re other people’s!
You can learn from mine.
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