The right mindset, where investors are proactive, confident and take calculated risks, will lead to success and the ability to overcome challenges along the way.
KnowHow’s Bushy Martin was recently joined by Aman Sethi on the Get Invested podcast to talk about the importance of building the right mindset, and the different approaches to take in the property investing journey.
Aman Sethi is a respected role model in the property investing industry, overcoming migrant challenges in Australia to build his successful talent business JICS while amassing a $10M property portfolio in just four years.
Both Bushy and Aman believe the mindset is the starting point for all successful investors.
“Build a mindset that unlocks and accelerates a world of new skills and opportunities as many times as you need, as often as you need, and at every stage of the journey,” Bushy said.
“If you prioritise developing your mindset first, you’ll accelerate your skills and your results, developing a disciplinary response favourably under stress, fatigue and challenge in the moments that matter. Because with a wrong mindset, an unfair world of adversity is all you can seek. Even when opportunity is right in front of you, everything looks impossible and there’s always a reason why something won’t work. But with the right mindset, a world of opportunity opens. Everything becomes possible and limitless.”
Mindset: Focusing on what you can control
Bushy unpacked the easy to remember mindset formula of E+R=C, or Event plus Response equals Control.
“As soon as you accept that you can’t control events, but you can control yourself and your response, then you can actually create better outcomes. Now events are always happening and you always choose how you respond. So your response always creates your outcomes,” he said.
“This simple but not easy mental and emotional mind shift will make all the difference to your life. Unfortunately, your mindset isn’t fixed. It can be learned and changed from limiting fear to unbounded abundance. So how do you currently cope with and respond to challenge? Do you see things as tragic, catastrophic problems you can’t overcome? Or do you embrace challenges as exciting opportunities to learn and grow?
Mindset: Self belief
It’s crucial for investors to have self-belief in their journey and also seek additional guidance from the experts, rather than focusing on the opinions of those without experience.
“I’ve become a firm believer that what someone achieves has very little to do with the external environment and circumstances, but everything to do with what’s on the inside. In other words, what you believe about yourself and the world along with your outlook, your attitudes, and your expectations…and your problem-solving strategies, your approaches, your focus and your perseverance is how your belief, confidence, persistence, and resilience muscles will actually grow,” Bushy said.
Aman added: “I’ve always been a big believer in thinking for yourself. My view is listen to everyone’s opinion that has done it successfully. So if I’m going to buy a property, I’m going to listen to people that have built a property portfolio themselves. I’m not going to listen to a comedian to advise me about a property, right? So it’s a basic concept, but I think people sometimes forget that concept and they lean on the wrong sort of mentors that are not specialised or successful in the area that they’re trying to get mentorship on.”
Mindset: Taking action
While investors can fall trap to waiting for the perfect time or the perfect property, Aman recommended that investors instead be proactive and take action based on what’s best for their current situation.
“I’m not going to sit here and pretend that my situation is the same as everyone else’s situation. Everyone’s got their own scenario. But what I’ve noticed the last few years especially is, with people who, for example may be new to the country or just starting in their careers, even they’ve been able to build significant portfolios. Sure, they might not buy the million dollar house straight away that only rents for $700 per week because that creates a huge gap in their cash flow. But they can buy the 300K or 400K house that rents for $550, and that kind of means that it’s sustainable, the yield is really good, and they can then start multiplying that and building from that point of view. So I think the passion, the drive and the mindset needs to be there to focus, and then you have to choose which path is going to be the best for your situation. And there’s no magic formula, right? It just depends on whatever cards are on the table and then utilising those cards as best as you can,” he explained.
“There’s never the perfect time or the perfect property. It’s always about what you buy and where you buy it. And I think we have learned that, if you have 20 things on your checklist, it’s very unlikely that property is going to tick all 20 things. So if a property’s taking 15, 16, or 17 of them, and the other three are not significantly important, then that’s the property that you need to take action and buy. Because, especially during some of those growth phases, if you didn’t buy at that time, six months later that property is going to be an extra 200K. So the cost of not buying was significant. So just take action and go for it.”
Mindset: Taking calculated risks
For Aman, building a $10M portfolio in a shorter period of time is achievable through a reasonable risk appetite and making the calculations to eliminate and mitigate risks.
“I’m a very logical person by nature. So my mindset for me has always been a case of analyse the situation, analyse the options on the table, look at the pros and cons, and take calculated risks. And I think without taking calculated risks, it’s hard to get anywhere in terms of the investment journey,” he said.
“Being comfortable with the worst case scenario is critical as well. So if you can look at the worst case scenario and still be okay with it, then that’s when you should go ahead and take the risk. If you look at the worst case scenario and you’ll be really in a bad way at that time, then I think it’s maybe a risk not worth taking. And so my risk appetite, I wouldn’t say it’s huge. I like to look at both possibilities – what is the best case and what is the worst case? If the worst case happens, what steps am I going to take to mitigate that? And just by having those two or three steps in place in my mind, I’m then able to take more action more confidently.
“That’s not to say it doesn’t cause some level of worrying at some time. But the more we push through that, the more we’ve done it, the more comfortable we’ve gotten over the years. And that’s something that definitely plays into the mindset side.”
Listen to the full interview here.
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