3 Things You Must Understand
Posted @ 8:40 pm - Filed under Real Estate Investing
Keeping it short and sweet today. Sometimes the simplest principles are the ones leading to the most success. My dad, for his first several years in school, literally attended class in a red, one room schoolhouse. He said he learned more in that atmosphere of learning the basics backwards and forwards than he ever did in the more ‘modern’ schools he later attended.
Aside from the myriad things we need to know and understand, and the technical and analytical skills required to make real estate investment decisions, there really are only two things you need to know. Once you know these two things, and understand the conclusion to which they inevitably lead, you will have infinitely increased your chances for long term investment success.
First — And don’t smirk — More is better than less.
More after tax profits. More after tax cash flow. If it has to do with return, maximize it one way or another.
Second — Sooner is better than later. Hey! I said no smirking.
It’s surprising how many folks don’t understand time’s place in real estate investment. Calling time a crucial factor is like saying water is wet. Neglecting time’s effect on your Plan and it’s execution is almost always injurious if not outright fatal.
Conclusion — The synergy between the two factors produce yet another Captain Obvious epiphany.
More — sooner — is much mo’ betta.
In other words, if someone ever tells you that $100,000 today is a better choice than $500,000 seven years from now — Don’t call him on it — That statement is right the vast majority of the time - at least in real estate.
If you don’t quite see that, ask yourself this question: If I”d given you the option of receiving $100,000 in cash seven years ago, or receiving $500,000 in cash today, which one would you opt for?
Please turn in your papers when you finish the test, and please show your work.
In a day or two I’ll show you the real life answer, using real clients’ experiences.
Understanding the value of time is having the key to the vault.
This entry was posted on Wednesday, May 9th, 2007 at 8:40 pm and is filed under Real Estate Investing. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.