“Without doubt, the most common weakness of all human beings is the habit of leaving their minds open to the negative influence of other people. This weakness is all the more damaging, because most people do not recognize that they are cursed by it, and many who acknowledge it, neglect or refuse to correct the evil until it becomes an uncontrollable part of their daily habits.”
- Napoleon Hill
The Origin of Limiting Beliefs
It’s not hard to understand why some people struggle to believe they can be successful real estate investors. Many Americans have never owned a home to live in, let alone owning property purely as an investment.
Growing up, my parents certainly didn’t have investment properties, and I’m sure many reading this are in the same boat. Combine our upbringing with the friends we surround ourselves with, who are probably a lot like us, then we find ourselves in a bubble where becoming wealthy through real estate investing isn’t “our” reality.
If this is the origin of our limiting beliefs, what can we do to free ourselves from them? The fastest and perhaps most dramatic way this happens is by experiencing something that creates our own paradigm shift. That can be a conversation, seeing something jarring, or even reading a book. I know for me and many other investors, that shift came as a result of reading “Rich Dad, Poor Dad.”
My dad was a TV repairman growing up, and while we weren’t poor, we weren’t rich either. My parents were able to provide the essentials, living in a decent neighborhood, but they were very frugal, so there weren’t a lot of “extras.” Neither of my parents had a college degree or what I would call today financial literacy, but they certainly wanted me to have a better life than they could offer.
Society had taught them (or brainwashed, depending on your perspective) that the best way to improve your lot in life was to do well in school, go to college, and spend the rest of your working life climbing the corporate ladder. If everyone says it, how can it be wrong?!
Well, it’s not necessarily wrong, but I’ve found that in life, there is rarely just one right answer. As I’ve laid out in previous issues, it may be possible to become wealthy this way, but your chances are small, and it will take a lot longer than putting your money to work through a tax-advantaged asset like real estate.
Of course, it’s hard to predict what will be the catalyst for a paradigm shift. But, if like Neo in the Matrix, you’ve already taken the red pill and believe investing in real estate is the best path to wealth, then you need to start surrounding yourself with like-minded people.
The Importance of Who You Surround Yourself With
I’ve heard some suggest getting rid of all your friends who don’t have an equal passion for wealth building, and I’m certainly not advocating that. It may be worth taking stock of who you hang out with and determining if some of those are negative influences, but I would recommend that for anyone.
People around you who are continually telling you things won’t work and dissuade you from trying are only trying to make themselves feel better about their own lack of ambition. The way I visualize this is a drowning victim. Anyone who has taken swimming safety classes knows that jumping in to save a drowning victim is the last resort. Why? Because they are so panicked that they sometimes wind up drowning the very person trying to save them. Don’t allow negative people to drag you down.
There will be people though who are genuinely and perhaps rightly concerned with the risks you’re considering. This is especially true when you are first starting out in real estate and get really excited about the opportunity. Combine that with someone who might already have a high-risk tolerance, and it could be the recipe for a poor (and costly) decision.
I will be the first to admit that when I first became enamored with real estate investing, I may have been seeing a little too much rainbows and butterflies. In those times, it was helpful to have objective third parties help me weigh the risks and rewards of potential deals.
What if Your Friends and Family Aren’t into Real Estate?
Like I said before, that’s ok. No matter how loudly and convincingly you sing the praises of real estate, not everyone is going to be a convert. That just means you need to go out and find people who worship at the altar of wealth through real estate.
You don’t even need to leave your house to do it! Bigger Pockets is one of the best places to engage with other like-minded investors. Of course, there are countless Facebook and LinkedIn groups as well.
Current pandemic circumstances aside, I think in-person meetups and conferences are the best ways to connect with people. Use connections you make at these events or platforms to learn so your confidence grows, but also to hold you accountable.
What do I mean by that? Ask any high school student, and they will tell you that peer pressure is one of the most powerful forces in the universe. The funny thing is, that doesn’t change even as we get older. So use that power to your advantage to jolt you out of inaction. Put out there for everyone to see what your goals are for the next month or year and ask the community to hold you to it!
You should also surround yourself with people that are already successful in the space you want to invest in. This is not only important for learning the business but for the psychological affirmation needed to keep you in the game and take action. You will be able to tell yourself it’s possible for this to work because you’ll know people who have done it.
But it's also useful to keep a core group of trusted advisors you had before getting into real estate. For me, one of those people is my wife. She keeps me grounded and provides a valuable perspective.
The Power of Affirmations
In the immortal words of GI Joe, “Now you know, and knowing is half the battle.” ™ So, one last tip to help you with limiting beliefs is to acknowledge them and write them down. Taking them from random thoughts or feelings inside our head to words on the page or screen can have a profound effect. Only by acknowledging these limiting beliefs will we be able to fight them the next time they arise.
The older among you may remember the SNL skit with Stuart Smalley, where he would look into a mirror and recite affirmations to himself, “I’m good enough, I’m smart enough, and doggone it, people like me.”
I’m not necessarily telling you to do that, although I guess it couldn’t hurt. But once you’ve identified those limiting beliefs and written them down, come up with a counternarrative for each. If your limiting belief is, “I can’t risk the small savings I have in something this risky.”
You might make an affirmation that says, “I may not have a lot of money to invest right now, so I’m going to leverage my most important asset, my time, to learn how to invest with no money down.” Doing this will provide your brain with the ammo it needs to counter those limiting beliefs every time they creep in.
Some people grew up being taught that money is the “root of all evil,” and if you want to be wealthy, you must be “greedy.” This is all nonsense. Money is a tool, and like any tool, it can be used for good or evil.
The most profound argument I’ve heard for removing limiting beliefs surrounding the legitimacy of seeking wealth is this, the more money you have, the more you can give, and the more good you can do.
Conclusion
I felt it appropriate to start this series on what prevents us from getting started in real estate with limiting beliefs because it can affect us at all phases. It can prevent us from beginning our real estate investing journey, but it can also stop us from going from 100 units to 1000. If we are to reach newer, more audacious goals, we need to continue to challenge our limiting beliefs.
There’s plenty more to come in future posts, so make sure you click here to subscribe. I’ll let you know when new posts are out and provide valuable “pro-tips” associated with that week’s topic.
Ready to start passively investing in multifamily real estate and want to see if our opportunities might be a good fit for you? Click here to visit our website to learn more or reach out to me directly at Tim@ZANAinvestments.com.