Fear. It’s the thing that holds us back. We are all afraid of something. Fear of failure, fear of losing, fear of the unknown, fear of success. Fear can talk us out of making a wise choice because it is different than what we normally do.
Don’t let fear hold you back. Fear is probably the #1 thing that keeps people from reaching their dreams. So how do you get over it? I guess there really is no right solution for everybody. But I believe that it is mostly conquering our own fears by changing our mindset or at least by telling ourselves we can do it. Of course, sometimes fear is a good thing. It can keep you safe, like fear of walking up to a bear. Or trusting a shady person trying to steal your money.
I’ve had to get over a lot of fears in my life. More recently two come to mind. When we made the decision to uproot and move our family with 4 kids across the country to help care for my Mother. I didn’t have a job lined up, I couldn’t even find one that looked like it would pay enough or in the industry of my experience. It would require my wife to restart her Real Estate business in a new area where we knew nobody. It would mean our kids leaving their friends and the only home they knew to go to a strange place. It would be a smaller city with less to do. With all of that and other doubts, we conquered that fear with Faith. Yes, we as a family and individually prayed and fasted to know is this is what we should do. We all reached a consensus that it was the right thing to do. Once we all knew it, then we left our future into the hands of our Father in Heaven. I told my boss that we would be moving sometime soon and explained why. I was trusting that once we got to our new city, things would fall into place. Well, we didn’t have to wait that long. My employer offered to let me work remotely from home. It was great! That problem was solved. It was still a rough change for the kids and my wife, and even for me a bit to get used the the small town atmosphere. But we all adjusted and now love it here.
My second most recent fear was when we bought our first rental property. This one was a bit harder actually. We were heavy in debt and it was going to be a big risk that could bankrupt us. That would be bad. In my earlier posts I described the process but I’ll cover some other parts of it here. We were in deep debt, and what little cash we had on hand from tax refunds and a recent commission sale for my wife, the normal plan would be to use that money to pay down some of our debt. It was about $6,000 or so. Plus I was going to borrow $20k from my 401k to use toward the down payment on this property. As I’m sure you are aware, touching your retirement savings is a big ‘no-no’. It’s Taboo, you don’t ever touch your 401k. Well, that was the conventional way of thinking. So if this property failed, not only would we probably face bankruptcy, we would also be out the cash and probably be penalized for the 401k funds taken out because I probably would not be able to pay them back.
Why did I keep going? I analyzed this property multiple times. Changing the numbers to run a worst-case scenario. Even at its worst, it would still cash flow. At its best, it would be awesome. With my finance background, I trusted the numbers. I knew it would work. And I had already analyzed about a hundred other properties and this one worked. Even with all that, I still was afraid. I didn’t want to cause undue harm to my family for a dumb decision. Even the night before closing I asked my wife if we should back out. It would be better to lose the deposit than to lose everything. But I said “NO” I know the numbers work. It will cash flow and I know I can manage it. I have to get started with just one property and this was better than any I’ve seen. It was newer, built in the late 90’s, well maintained, in a good area, no known problems, and I knew I could raise the rents and make it better. The numbers don’t lie. I decided to go for it. Not let fear hold me back or stop me from creating my future. I would regret it more if I had not done anything and just kept doing my same job every day, never getting ahead. For me there was MORE risk for doing nothing than to take a chance on this property to get started. And boy, am I glad I got over my fear. That one property has helped me in so many ways. The extra cash flows helped when we had some very tight months. It helped legitimize me as a Real Estate investor. It helped me learn processes for property management. It helped me be able to purchase another two properties a year and a half later. And they will keep snowballing into more.
What’s your fear? Whether or not it be Real Estate investing, changing jobs, writing a book, whatever it may be, don’t let fear stop you. Even if you have to take baby steps, work toward your goal. Don’t let self doubt stop you. I had been wanting to start this blog over a year before I actually did. That was fear of not having an audience, not being taken seriously, not having anything of worth to say… But I pushed through all that. After speaking with dozens of other beginner investors, there is information to share. I have knowledge and experience that others may need to know about to help them get over the same problems. Even after all this I can only truly reach and help one single person to improve their life, it will have been worth it.
Think about what you are afraid of that is stopping you from progressing toward your goal. Write it down. It may be more than one thing. Then tell yourself every day that you can do it. You have the ability, you can succeed. Self motivation does actually work. When you get those doubts popping into your head telling you that you can’t do it, don’t listen! Think positive thoughts. You can do it! I know you can. If you are a numbers person like me, work out the numbers. If they make sense, then go for it. If you are a religious person, don’t be afraid to ask for help in your prayers. You do have a loving Heavenly Father who wants you to be happy and succeed in life. You can ask for divine help. Just be sure you are doing it with good intentions. Don’t ask for success so you can buy a Ferrari. But that you can have the income needed to be able to help the poor and needy and do good in your community. When I reach FI and can free myself of a full-time job, I plan to spend my time volunteering in my community. Donating to multiple charities. Besides obviously spending more time with family. You receive blessings of wealth so that you may help bless the lives of others.
For Real Estate investors, we often get stuck in what is referred to as “Analysis Paralysis”. This is basically just another word for FEAR. You analyze a property so many times trying to decide if it is a good deal or not. Chances are it is not. If they numbers were good there would be no reason to doubt. I always inflate my expenses a bit to be very conservative and if it still looks good that way, then it will be even better if the actual expenses are less. The numbers don’t lie, but can be wrong if you enter them wrong. Be smart, don’t leave out anything from your analysis. I will be covering how to analyze a rental property soon.
Fear of FI?
What if you have reached your magical FI number? Well first of all, congratulations. That is a HUGE milestone and should be celebrated. Now the next step for most is to quit their job. You don’t have to of course, it is up to you. Do you love your job? Could you maybe do it part-time? It is a hard thing to walk away from the security of a guaranteed paycheck. How do you make that transition. Well one way you could do it is to test it out first. Before you quit your job, start living from your retirement. Take your normal paychecks and deposit all of it into a separate account. Don’t touch it, treat it as if it wasn’t there. This way you can go a few months to a year testing the water to see if you were correct on your FI number and if it really is sustainable. Once you are satisfied, feel free to do as you wish. The positive would be that you still have that savings from your income during that time. If you find out you don’t need it, then invest it and live your dream.
Alternatively you can also continue to work part-time. This way you still have some sense of security but still give yourself the extra time you wanted. Another option that many pursue is to do other types of work. Maybe this is now where you use your time to finally start that business you always wanted to do but never had the time. You have your FI income to live from so you can pursue your passion. You could also do freelance or consulting work to give you work when you want to and travel or do whatever else you want when you don’t feel like working. The sky’s the limit with what you can now do. But again, the fear comes in that makes you stay another year or more at the job you were trying to get out of. So follow the tips above and test it out for a bit. Maybe a couple months is enough. But don’t let the fear control you. Mind over matter. Trust in yourself and your abilities. If you need some additional feedback reach out to others with the same mindset. It wouldn’t be helpful to ask a coworker who has no concept of FI or of Real Estate investing to ask if it is a good idea. They will probably just think you are crazy. Get together with like-minded people that can support and help you. I am here as well to answer your questions or give encouragement and support. Feel free to leave a comment.
Don’t let FEAR keep you from reaching your true potential!
