Suppose you’re like most people that picked up Napoleon Hill’s Think and Grow Rich or The Intelligent Investor by Warren Buffet. In that case, you’re most likely motivated to begin your journey into the world of investing, especially in real estate.
Real estate is one of the most lucrative industries worldwide. As it outperforms most investments due to the asset’s ability to appreciate. Besides, it isn’t as volatile and vulnerable as the stock market and is a sure-fire way to generate money passively.
This article aims to shed more light on real estate investing. Dispel some myths, and reveal five ways to know if you’re truly ready to become an investor in this industry.
Investing Can Be Scary
There’s a famous saying that “Everyone wants to go to heaven, but no one wants to die” the same can be said about investing.
Most people dream of a luxurious life with fast cars and a financially successful family but fail to achieve this dream. Why? Because they are unable to get over the fear of losing money.
They also over-complicate the issue by either expecting an immediate return on their investment efforts or hoping to become millionaires overnight – or both. The truth is, Long-term investing like real estate doesn’t pay-off immediately; it’s a slow asset, but the gains are worth the wait.
It’s similar to the mindset of a person that desires to lose weight; going to the gym and expecting to become physically fit within a week won’t get you the desired figure. Only effort combined with knowledge and dedication.
So before committing your money into an investment, ensure that you’re prepared; else, your fear of losing money will become a reality. But how do you know if you’re ready to become a real estate investor?
Five Signs to Know That You’re Ready To Invest
Indeed, investing is scary, but you might be more ready for the market than you realize. Here are a few pointers that reveal if you’re ready – emotionally, financially, and intellectually – to become an investor.
● You Have Extra Cash Monthly
If you’re responsible in terms of handling your expenses to the point that spare money is left in your account at the end of the month, you’re most likely to possess enough self-discipline to invest.
● You Desire Financial Growth
Most people are content with their current financial status and don’t aspire to go beyond their earnings. However, if you have a genuine desire to become wealthy and are equally responsible for your spending, you will most likely perform excellently as an investor.
The possibility of you prospering (financially) doubles if your thoughts are geared towards investing in a particular company or business. For example, you might be thinking of investing in a company producing biodegradable plastic since regular plastic will soon become obsolete.
● You Understand The Basics Of Investing
You don’t need to be a master investor like Warren Buffet or Robert Kiyosaki to grow your money. However, you need to understand the fundamental principles – or rules – that govern asset acquisition.
If you understand terms like Real Estate, Fixer-upper, Vacancy rate, Appreciation, and other fundamental factors, you’re ready to begin your journey into investing. However, that journey starts with getting more information.
● You’re Willing To Admit Your Flaws And Learn
If you’re willing to admit that you don’t know everything concerning money and learn as you go, you will excel as an investor.
Success in investing requires you to be agile enough to observe new information from the market and use it to your advantage. Egotistical people who fail to admit their ignorance will slowly lose their investment and acquire debt.
Therefore, keeping an open mind is crucial to have while aiming for success in real estate – or any other sector.
● You’re Interested In Books About Financial Freedom
Finding time to invest in your understanding of money is a vital sign that your mind is geared towards becoming a successful investor. You don’t need to spend 10 hours a day binging the Rich Dad series or any other motivational material. Just a few hours a month will suffice.
Note: while a healthy consumption of books is recommended, reading them excessively will most likely result in Analysis Paralysis. Thus making you unable to act on what you read.
Ultimately, knowing if you’re ready to become an investor hinges on three primary factors: the desire to become wealthy, the willingness to learn, and the self-discipline required to handle money. If you possess these characteristics, you’re ready to invest.