People are very entertaining if you just take time to listen to what they say and observe how they act. After all, that’s why reality television shows are so popular. Now you can watch people from the comfort of your living room chair.
The things they do and say are so highly entertaining because people so often react based on emotion. Often, that emotion is fear. Throw in a little laziness and a willingness to believe whatever they hear that justifies their fear and there you have them-the two most wealth-preventing myths about real estate investing that were ever conceived. And those two are the parents of the third.
Those myths are, of course, fear-based. They are also myths that would not exist if it were human nature to educate themselves about a thing before making up their minds about it.
What are those myths?
1.Real estate is a gamble.
2.Real estate is risky.
3.There is no way I can possibly invest in real estate.
Naturally, Myth No. 2 follows logically from Myth No. 1. Assuming, of course, that logic goes into the thinking at all when someone determines these things.
Robert Kiyosaki, author of the Rich Dad book series, said that there are people out there who honestly believe that real estate investing-or any type of investing at all, really-is all about luck. These types of investors throw their money at anything that looks good to them. But they haven’t taken the time to educate themselves on what is a good investment. So what “looks good” to them is based on a purely emotional reaction-or worse-a guess.
Real estate investment cannot be accurately compared with, say, Black Jack or Roulette because those games are guessing games. Real estate investment is not a guessing game. Real estate investment involves looking at financial documents and determining from them where you should spend your money. It’s not about guessing-it’s about reading.
And Myth No. 3, well…that’s the biggest myth of all. Anyone at all can invest in real estate, if they are willing to take those first important steps: Make sure you have the capital by increasing your wealth, which is generally done by building a business system, and educate yourself in the process of investing.
There’s the rub. Most people are simply not willing to take those preliminary steps. They think they are wasting time if they attempt to learn something. The extra money they have is burning a hole in their pocket and they can’t wait to throw it away. So that is exactly what they do.
There is risk, of course. Anytime someone sets out to learn a new skill-even investing-they will make a few wrong moves. But that is all part of the process. As time goes on, you will get better at it. So of course, you shouldn’t toss your life savings into the pot.
Simply start out small and work your way up, as you would with anything. Kiyosaki compares it to piloting an air plane. It’s not something you would consider doing if you had never been in the cockpit. But with time and lessons and practice, it becomes something you can do with ease and confidence-something you can do safely. But you must invest the time to learn how.
What really is a risk, Kiyosaki said, is neglecting to educate yourself. When you neglect your financial education you are losing more money than you can imagine-not only the money you invest if you choose to leap without looking, but also the money you will never make if you choose not to leap at all.