Most people who ever buy an investment property sell it before they reap the benefits, yet many property owners in Australia go on to own a few hundred properties.
In fact in the book by Waxman & Lenard (and in another book by Judith Yates), it mentions 34% of investment property owners in Australia have 10 or more properties.
Is it the case that most people don’t know what the few lucky people know? Not at all.
The difference is that 90% of success comes from just holding on over time – not to be impatient and not giving up at the first time you can justify it.
We personally know of one property investor who sold their single investment property because the tenant was often slow mowing the lawn (yet paid the rent on time). After the sale, the tenant remained and continued to pay the rent on time for 11 more years – so far. And is still slow at mowing the lawn at times. Now the property is worth three times as much as when the first investor pulled out.
Humans are not hard-wired for long term planning. We started out as hunter gatherers and lived in “fight or flight” mode. It was all about survival and what happens now.
That’s why hardly anyone sticks to new years resolutions. The enjoyment of the donut or the relaxation instead of the exercise takes precedence over the long term plan.
Long term plans become invisible. Humans like results “now”.
The scientific name for the human tendency to prefer a fast pay off to a long term result is “hyperbolic discounting”. It really is hard work to overcome this hard wired tendency.
Isn’t it strange that only 10% off coronary bypass patients make any lifestyle changes (as instructed by their doctors) in an effort to prevent further attacks. That means the other 90% risk their life for the sake iof immediate gratification. How profound – your life is on the line but you choose instant pleasure.
Just as strange is the way people already in financial difficulty spend up big on their credit card. So it’s a case of “tomorrow is another day” or “tomorrow never comes”?
We all know that long term success is not instant. It is slow and can be volatile.
Rich people realise this and work around it.
To succeed you must enshrine and protect your long term plans and allow your short term enjoyment to fit in nicely and snugly alongside it.
This still allows for a good, fun, balanced life…….and it becomes even more fun when you become rich.
For now just enjoy the ride. With the right ingredients, the worthy destination is assured.